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Watford are selling shares to fans via encrypted ‘tokens’ and have held talks with Anthony Joshua
Watford have become the biggest English club ever to sell shares via the digital economy in a 10% crowdfunding sale to fans.
Executives assured potential investors they would not have to pay in volatile cryptocurrency as the owners attempted to raise £17.5 million.
Watford, owned by Italian Gino Pozzo since 2012, has been seeking investment in recent years. The scheme was detailed in a letter to fans just days after it emerged the club had held unrelated exploratory investment talks with Anthony Joshua.
The shares, which effectively value the club at £175m, will be available through online trading platform Republic, which has partnered with AFC Wimbledon.
Those who buy digital shares could eventually acquire “tokens,” crypto-linked fan engagement schemes that have previously caught the attention of lawmakers. However, those behind the deal say “there are many key differences” with other NFT or fan token schemes. “Most importantly, this offering allows for true ownership of club shares, which is not the case with NFTs or fan tokens,” the club said.
Watford insist digital share sales, part of “innovations” to fuel the club’s attempted return to the Premier League, are safe and regulated.
“After examining a number of options, we have decided to take the exciting and innovative step of becoming the first major English club to offer true ownership through digital equity,” the letter to fans reads. “Digital equity is a simple and convenient way to access club shares.”
After recording a pre-tax profit of £24.1m for the latest financial year – the highest in the EFL – the club claims it offers a “fair valuation”.
“With a digital equity proposition like this, excitingly, there is an opportunity for fans to get involved and own shares in the club, alongside other investors,” the club said. “In addition to digital equity, there will be the ability to receive tokens and access exclusive offers, with plans to facilitate future token trading.
“The offerings will be hosted by Republic, a leading online investment platform, which has extensive experience in digital equity offerings, having previously led similar projects in football. The shares will be available to purchase on both the Republic platform and Seedrs, the Republic platform in Europe, in pounds or dollars without the need to purchase via cryptocurrency, as is the case with traditional share sales.”
Joshua is not expected to be involved immediately
Joshua’s potential involvement would have been part of a proposed consortium. However, his spokesman said he has no intention of immediately committing to ownership of the football club.
Under the new scheme, the price per share has been set at £12.44 and the minimum investment is four shares totaling £49.76 for investors purchasing via the Seedrs platform and eight shares totaling £49.76 £99.52 for investors buying their shares via the Republic platform. Once the shares are purchased, there is a 12 month lock up period before trading is permitted.
“Part of the funding will be channeled into recruitment to strengthen Tom Cleverley’s squad as we seek a return to the Premier League,” the club said. “We believe this project can form a key element of future football financing, where investors and fans can enjoy the fruits of the club’s future success.”
Fan tokens have become increasingly popular in recent years, with Manchester City, Arsenal, Leeds United and Juventus all striking deals with Socios. The Culture, Media and Sport (CMS) Committee warned last October of price volatility and the risk of financial harm to fans persuaded to buy tokens for club access and prizes.
At Watford the tokens will finally allow fans to have “exclusive benefits, such as access to special owners’ meetings and selected areas of the stadium”.
Republic “has a robust investor control system that protects the club from illicit third parties by applying internationally accepted Know Your Customer and Anti-Money Laundering (KYC/AML) standards,” the club added.
“Additionally, the platform is regulated by the relevant financial authorities in each jurisdiction, with accreditation rules in certain geographic areas where relevant.”