It is outlined how Watford’s website acknowledges that Capoue has asked to leave Vicarage Road after the club’s relegation to the Championship and his former Hornets boss Gracia is a big admirer.
There are yet to be any new arrivals at the Mestalla this summer despite a raft of player departures.
However, the club are said to be reluctant to move for Capoue due to the fact he is aged 32 and also would command a high wage.
The exits of Valencia club captain Dani Parejo and Francis Coquelin to Villarreal from Los Che were also confirmed last month, following the exit of star winger Ferran Torres to Manchester City and striker Rodrigo Moreno has joined Leeds.
Furthermore, Cristiano Piccini has joined Atalanta on loan, Ezequiel Garay did not have his contract renewed and the loan deals for Jaume Costa and Alessandro Florenzi both expired.
Reports mean that the financial uncertainty means Los Che must slash their wage budget by a whopping 40 percent ahead of next season, with 12 first-team players at the club said to be up for sale this summer.