It’s logical if you think about it. Try to use a parachute as a trampoline and you won’t get very high, and Watford Football Club appear to be the latest ex-Premier Leaguers to have discovered the dangers of life in the Football League Championship without either. Much of Watford’s year-long dalliance with administration, which has finally hit the national headlines, is a familiar tale of football-finance woe. An over-ambitious pantomime villain risks everyone’s money but his own on an unachievable dream and blames fans, press, and global financial crises when it all goes horribly wrong. Then he sods off before the discovery of buried bodies, leaving a successor to pick up the mess and either start the whole process again, after a short honeymoon period of renewed over-ambition, or desperately scrabble around in the hope of skin-of-the-teeth salvation.

Watford are on the latter course. It is a very short year since chairman Graham Simpson and his ‘evil sidekick’ chief executive Mark Ashton ‘sodded’ off. Simpson had been the bringer of renewed over-ambition when he arrived in Hertfordshire in 2002, picking up the mess known as the ‘Gianluca Viallli’ era. Within five years, Watford were in the Premier League, managed by Aidy Boothroyd – the next big thing in football management for about half-an-hour. But they couldn’t stay there, or get back there while they had millions of parachute payment advantages. Like Southampton, Derby, Ipswich, Sheffield Wednesday and many, many others before them, though,the money ran out before the ambition did, leaving dismal debt in its wake.

Since the mid-1970s, Watford have had a direct line to national media attention via Elton John, a piano player with big glasses. And when he resigned as honorary president in October of last year, asking “Where’s the money gone?” the national media turned its head. Despite the departure of £21m worth of players in the previous 20 months, the Hornets’ finances made for grim reading, when fans could get to read about them. Simpson was anxious to sell the club and to punt the line about “what a brilliant club this is and how well we are doing”. But Watford Observer journalist Kevin Affleck’s version of this was “Watford face the grim prospect of going into administration unless they can find £10m through player sales”. His article in the Observer on July 25 2008 was withdrawn when Simpson threatened lawyers. But, predictably, Affleck’s version of the truth was closer to the truth.

Disaffected shareholders called an EGM of the club’s parent company Watford Leisure plc, demanding a vote of no confidence in and the resignations of Simpson and Ashton. Leading the calls were the Russo brothers, Giacomo and Vincenzo – Jimmy and Vince to their mates – who owned 29.9% of company shares. The brothers had been manoeuvred off the board in 2007 after rifts with Simpson and, particularly, Ashton, dissatisfied with the pair’s management of the club. They had no chance of success at the December 1st EGM as Simpson, backed by Watford’s leading shareholder, the billionaire Tory peer Lord Ashcroft, was able to announce “irrevocable undertakings” of support from 54% of the shareholders alongside the announcement of the meeting.

But the prospect of public debate would eventually prove too much for Simpson. Minutes prior to the EGM, he emerged from a secret meeting to announce his resignation rather than face critics or defend the club’s £5.1m loss for the financial year. Grim though the story of Watford’s finances was, many believed they were not getting the whole story. Simpson’s subsequent resignation, however, soon enough followed by Ashton’s, was a temporarily successful attempt to draw a line under matters. Early this year, the Russo brothers assumed control, with Jimmy installed as chairman, and at the end of March the club’s unaudited interim set of accounts for Simpson’s last six months revealed a whopping £2.3m loss, despite £3m profits on player trading.

The Russos lent the club £1.82m through their firm, Valley Grown Salads (VGS), a name with a situation-comedy feel to it, even though Watford’s situation was far from comic. Such loans were to become a regular feature of Watford’s year, as the Russos struggled to control the club’s wage bill via unpopular redundancies and player sales. The extent of the Russos’ lending became clear shortly after the summer transfer window, which had seen more players sold, although unfortunately for Watford’s finances, two went to Portsmouth. And non-payment of the fee for striker Tommy Smith, is one reason for Pompey’s current transfer embargo. Jimmy Russo claimed that three loans of a combined £3.7m had each saved Watford from administration. The January loan had been due for repayment out of Watford’s final parachute payments, but this was deferred. And further loans, of £650,000 and £1.25m in July and August respectively, were required.

Russo said new Chief Executive Julian Winter had told him in January: “Even with player trading built in around £4m, we still have a shortfall of £8.5m,” which would need to be found in order for the club to survive to June 2010. Player trading was higher, but with transfer fees arriving in instalments – if at all, from Portsmouth – more loans were required. VGS lent another £1m at the end of November and all loans were consolidated into one big loan (totalling £4.8m), like in those TV ads with Carol bloody Vorderman. This, however, will only last until 22 December. It really could “all be over by Christmas” for Watford. And even if they reach January 2010, they’ll still need another £5.5m to reach June 2010. And Valley Green Salads can’t have that much more to give. Money is arriving from ticket sales for an Elton John concert at Vicarage Road next summer, and Watford’s share of the gate receipts for their FA Cup-tie at Chelsea will be a fair few quid at Stamford Bridge prices, but both could be too late.

The Russos have almost certainly done as much as they can to turn their inherited situation around. And their honesty and transparency has been in the starkest contrast to the Simpson years, often labelled “Stalinist” by disaffected journalists and fans alike. Yet suspicions of their motives remain among the more cynical and world-weary of Watford’s long-suffering support. The Russos’ have been criticised because loan repayments will attract interest of over 4.5%, because some of the loans are secured against Vicarage Road itself, and because of their inability to get financial support from the filthy-rich Ashcroft. The idea that club directors and owners should make any money at all out of ‘their’ football club still remains anathema to some, especially at interest rates in excess of what they as savers may be receiving.

Anything secured against Vicarage Road is bound to put in mind the fates of other clubs in this situation owned by property developers and, surely, they say, the sort of money Watford need is loose change for Ashcroft. But it is difficult to see what other options the Russos have if they are not to bankrupt themselves. VGS are no petro-chemical giant. They supply salads to supermarkets. Jimmy and Vincenzo became agents in 1982 – cucumber agents. The company is small enough to need this money back, plus whatever interest they would have made if they’d not loaned it. And there’s precious little else but Vicarage Road to secure those loans against. They aren’t making fortunes out of this; they are keeping Watford Football Club alive. The Russos even garnered criticism for denying that summer player sales were for primarily financial reasons, even though it made sense not to alert potential buying clubs of Watford’s desperate cash needs until the window was over. Such is the greater desperation of their current situation that the Russos have no choice but to disregard such discretion. So it is that the first casualty of Portsmouth’s financial meltdown could be another football club entirely. There’s an irony in there somewhere. But even if Watford are not the first to go, there’s a sense that one club will go, sooner rather than later, and it’s most likely that it will be a club trying to use a parachute as a trampoline.