Even if last season’s performance was a little disappointing, Wolves did end up comfortably securing their sixth consecutive season in the top flight since promotion in 2018. It also looks as if they have remained within the Premier League's profitability and sustainability rules, unlike Nottingham Forest.
Wolves’ pre-tax loss widened from £46m to £67m, despite
revenue rising £3m (2%) from £166m to £169m and profit from player sales nearly
tripling from £15m to £44m. However,
operating expenses surged £45m (20%) from £224m to £265m, while net interest
payable almost doubled from £5.6m to £10.4m. In addition, there was no repeat
of the previous year’s £2.7m other operating income.
Since Fosun bought Wolves, the club has lost money in five years
out of seven, including a hefty £113m in the last two seasons alone. Initially,
investment in the squad led to £80m net losses in the Championship, though the
owners’ gamble paid off, as this helped secure promotion to the Premier League. Fosun’s £117m funding in the five years up to
2022 is one of the highest in the Premier League, though far below the likes of
Everton £573m, Chelsea £416m and Aston Villa £351m.
There have been a few rumours that the owners would be open
to offers, either to buy the club outright or take a minority stake, especially
as Fosun have offloaded a number of “non-core” businesses since their finances
were hit by the pandemic.
There was hardly any change in Wolves’ revenue, though all
three streams showed small increases. Gate receipts grew £1.8m (14%) from
£13.3m to £15.1m, while commercial rose £1m (3%) from £28m to £29m.
Broadcasting was very slightly higher at £125m.
Wolves’ £67m pre-tax loss is obviously not great, but it is
by no means the worst financial result in the Premier League, as even larger
losses have been reported already for 2022/23 by Aston Villa £117m, Southampton
£87m and Newcastle United £73m. In
contrast, a couple of clubs did manage to generate a profit last season, namely
Manchester City £80m and Brentford £9m.
Nost football clubs post losses at the operating level, but
Wolves’ £101m is actually the largest reported to date in the Premier League in
2022/23. Obviously, many clubs still have to publish their accounts for last
season, but in 2021/22 the only one with a higher deficit was Chelsea.
The importance of
player trading
Wolves’ net loss would have been even higher without the
benefit of £44m profit from player sales, up £29m from the previous year’s
£15m. This was largely driven by the sales of Morgan Gibbs-White to Nottingham
Forest, Leander Dendoncker to Aston Villa and Ruben Vinagre to Sporting. This is actually the second highest gain from
player trading to date in the Premier League, but will be overtaken by some
other clubs when they publish their 2022/23 accounts, e.g. Brighton.
This season will also be very good from a financial
perspective with numerous departures, especially the big money sales of Matheus
Nunes to Manchester City, Ruben Neves to Al-Hilal and Nathan Collins to
Brentford. Good sums were also received for the transfers of Conor Coady to
Leicester City, Raul Jimenez to Fulham and Ryan Giles to Luton Town.
The resulting sizeable profit was required to help Wolves
meet their FFP targets for the 2023/24 season in order to avoid a point
deduction, as was the case with Everton (and probably Nottingham Forest).
Wolves’ revenue has fallen 2% (£4m) from the £172m generated
before the pandemic in 2018/19. The main reason for the decrease is lower TV
money, as gate receipts and commercial are both higher. Nevertheless, broadcasting is still by far
the most important revenue stream, contributing 74% of total revenue, followed
by commercial 17% and match day 9%. Indeed, their reliance on broadcasting
rights was the fifth highest in the Premier League the previous season, so it
would be helpful if the club could grow its other revenue streams.
Wolves’ £169m revenue was only 16th highest in the Premier
League, sandwiched between Everton £172m and Brentford £167m. To put this into
context, this was at least £300m below the Big Six.
That said, Wolves are only just outside the top 30 in the
Deloitte Money League, which ranks clubs globally by revenue, having fallen
from 25th the previous season. However, this still shows how far the club have
come, as they were playing in League One as recently as 2014.
Wolves said that “all matches were played in front of close
to capacity crowds”, with the average attendance rising from 30,725 to 31,346,
which is significantly up from a low of around 20,000 in the Championship.
Wages
Wolves’ wages shot up £21m (17%) from £121m to £142m, a new
high for the club, following significant investment in the squad. Headcount
increased from 424 to 465, with playing staff rising from 86 to 97. This means
that the wage bill has almost tripled since promotion, rising from £51m in
2017/18 (including a chunky bonus). It was relatively low in the first couple
of years in the top flight, but the evolution of the squad has resulted in much
higher wages.
The club said that £14.5m of the year-on-year increase was
due to the change of management, because of compensation paid to former head
coach Bruno Lage following his sacking, plus the impact of Lopetegui's higher
salary.
Wolves’ £142m reported wage bill is mid-table in the Premier
League, though it would be lower if the one-off compensation payments were
excluded (as is often the case with other clubs). To place this into perspective, Wolves’ £142m
was less than half of the top four clubs, led by Manchester City’s £423m, and
around £100m below Tottenham and Arsenal.
Unsurprisingly, Wolves’ 84% wages to turnover ratio is among
the highest in the Premier League, only surpassed by Aston Villa’s 89% and
around the same as Southampton.
Wolves spent an astonishing £212m on player purchases last
season, only below Arsenal £251m, Manchester United £247m and Manchester City
£221m, though big clubs like Chelsea, Liverpool and Tottenham are yet to
publish their accounts.
It is clear that Wolves have splashed the cash following
their promotion to the top tier with an outlay of more than half a billion
pounds, specifically £556m in five years.
During that period their net spend added up to £374m. In fact, the last
time that they had net sales was back in 2015/16 – and that was just £3m.
However, all that expenditure finally caught up with Wolves
last summer, when they had to slam on the brakes to avoid any problems with
FFP, ultimately leading to Lopetegui’s departure, due to his frustration with
the restricted transfer budget.
Debt
Wolves’ gross financial debt increased by £62m from £118m to
£180m, split between a £115m bank loan with Macquarie, secured on Premier
League TV rights, and £65m from the owners.
Gross debt has grown by £105m in the five years since promotion, even
though Fosun wrote-off £127m in 2021. It was as low as £4m in 2016. Since these accounts, Wolves have apparently
taken out a £99m loan from the UK government as part of an export finance
scheme at 3-4%, but it is not clear whether this has been used to replace the
expensive Macquarie debt.
Wolves’ £10.4m interest paid was actually the third highest
in the Premier League, albeit considerably less than Manchester United £31m and
Tottenham £22m (new stadium).
This year’s figures should look much better after the big
money player sales last summer, reinforced by O’Neil guiding the club up the
table. FFP will always be a balancing act, but it looks like Wolves have just
about avoided a fall.
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