Watford made a loss before taxation of £35.6 million in the financial year up to June 30, 2020, compared with with a profit of £9.7million the previous year, the club's financial records have shown.
A report detailing the club’s finances shows that £9.9million was lost overall due to the pandemic, between the months of March and June 2020.
Football was suspended in the UK at the beginning of March last year, and did not resume until the end of June, when games were played behind closed doors.
Best estimate figures included in the report, based on historic trends and fixture-specific data, suggest that £7.2m worth of broadcast revenue was lost, along with £2.4m worth of matchday revenue and £279k commercial revenue, simply as a result of the pandemic during those months.
The report also claims that "lower broadcasting revenues" contributed to the club's overall loss, despite Watford "growing sponsorship and commercial revenues" during the year.
In total, the club made a loss of £47.3m but were able to recoup some of that through "disposal of player registrations" with the sales of Dodi Lukebakio, Dimitri Foulquier and Obbi Oulare bringing in £18.1m.
Overall, total turnover decreased by £27.4m from £147.6m to £120.2m, which the club attributed to the covid-19 broadcaster rebate, a lower finishing position resulting in reduced centralised distributions from the Premier League and reduced revenues due to matches being played behind closed doors.
Salary costs increased by almost £13m, from £83.6m to £96.2.
The report also shows that a loan of £5.6m from the club's parent company (Hornets Investments Ltd) has been written off, in order not to "jeopardise the club's ability to continue as a going concern."
Additionally, two loans of £55m and £25m from Hornets Investments Ltd were refinanced into one £70m with XXIII Capital.
The report also shows that £7.1m was paid for the player registration of an Udinese player.
Ignacio Pussetto was the only player to arrive from the fellow Pozzo-owned club that season, but it is possible the fee could have been backdated for a previous signing.
Club chairman and CEO Scott Duxbury said that it would have been easy for the club to have struggled in the season that followed the one detailed in the report, due to the financial impact, but that investment and commitment from Gino Pozzo meant the campaign in the Championship was ultimately a successful one.
“The worldwide Covid pandemic negatively affected the finances of this football club just as acutely as any other, as these accounts evidence," he said.
“On the back of such a loss, compounded by relegation, it would have been easy for the club to have trodden a different path.
“Yet instead all employees kept their jobs, there was no fire sale of player talent and the ownership’s massive investment and commitment meant we were able to ensure that the year which followed these accounts was extremely successful – despite the continuing challenges.”
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