Watford FC Sell 10% Stake to Fans, Option to Tokenise Equity

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Introduction

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Watford FC Sell 10% Stake to Fans, Option to Tokenize Equity

The Sporting Crypto Newsletter is supported by The HBAR Foundation.

Discussed in this edition of Sporting Crypto:

1. Watford Digital Share Sale Overview 🧾

2. Why Tokenise Equity? 🤷
   a) Why Tokenise anything?
   b) Is Tokenisation good for fans?

3. What Does Fan Ownership Mean in the Modern Era? 🤔
   a) Defining ownership
   b) Watford FC fan reaction

4. Analysis & Concluding Thoughts 🧠

Watford Digital Share Sale Overview 🧾

Watford Football Club, a football team in the second division of English football (The Championship), are selling ~10% of the club in an equity sale via investment platform Republic’s European platform Seedrs. Anyone can participate, meaning fans will able to buy equity in the team they support. Those who invest will have the option to receive tokens, which may have specific perks offered to them.

Watford FC’s valuation is £175m and they are raising £17.5m in funding, with shares set at £12.44 each. The minimum investment is four shares on Seedrs (£49.76) and eight shares on Republic (£99.52). So far over £3.6m has been raised from 2,245 investors, meaning investors have spent ~£1600 each on average. The shares will have no voting rights and the capital raised will be used to fund recruitment in the off-season, as well as training and coaching to improve the team’s performance on the pitch.

Watford FC’s chairman and CEO Scott Duxbury said:

Republic claims "the sale is, to date, the largest digital equity offering to unlock true ownership shares in an English football club."

Seedrs, acquired by Republic in 2021, have previously helped AFC Wimbledon, South Shields FC and Altrincham FC to raise over £8.4m — but Watford FC is by far their biggest foray into football club investments.

Seedrs say that they “expect the number of clubs opting for this type of ownership to increase over the next few years and eventually for a form of fan-ownership to be featured on the cap table of the majority of British clubs.”

Why Tokenise Equity? 🤷

Although the wording around token optionality for those who invest is vague, many outlets have reported that the equity itself will be tokenised, which is fascinating.

But why would you tokenise equity?

Let’s put aside the football aspect for a moment to better explain this.

Tokenising real-world things is hot right now.

Real-time settlement, no need for middlemen, increased efficiency in a globalised market that is transparent, secure and verifiable — that all sounds pretty good.

But, more simply put, making real-world things like putting equity on a blockchain is not a new paradigm, but a huge unlock.

As a friend put it to me when we were discussing this: “There's nothing the internet does that couldn't be done before. We had TV, radio, newspapers. It just wasn't instant, 24/7 and global”

Similarly, equity doesn’t necessarily need to be onchain, but it modernises a quite archaic and old system.

Now let’s discuss why this might be useful for fans, and for the issuer — aka Watford FC.

Equity or share certificates are precious.

If they’re physical you frame them and they’re on your wall. If they’re digital they usually sit in an account you don’t look at often, but hope is secure.

This is where the portability of digital assets can offer something unique for both buyer and issuer.

For Watford FC, they can directly connect with fans who own tokens in a global, frictionless, digitally native way.

For fans, it allows them to log in to portals proving they are equity owners of the club, which may prove more difficult and annoying through APIs, redirects and such. A wallet, or abstraction of a wallet-to-portal user experience is much cleaner.

The wheel isn’t being reinvented here, it’s just being made much smoother and all-terrain.

What does Fan Ownership Mean in the Modern Era? 🤔