Deep dive on Mendes and Fosun

[Flea]

Fosun wants to make money out of their investments.It cannot be a surprise to anyone I guess.
I think that strategy has to involve us playing in the Champions League in the future.I don´t think buying and selling players alone will be enough of a strategy.I´m happy with that.I hope Fosun makes a great return of investment owning us because that will probably mean some decent silverware along the line and that the club will be left in a better state than what we were when the initially bought us.

There is a ten year plan.We are in year three.The big questions will be answered during the next three-four years because those will have to see considerable investments in the squad for us to be able to take the final step up.We are talking 100s of millions of Pounds.

At the end of the day I´ve been a fan since 1977.Only silver of note is the league cup 1980.
What I´m saying is that it´s worth the risk IMHO.

We will know how it pans out in three-four years time.

COYW!

 

[Monketron]

It's pretty damning. Shows we're never going to spend the big money on players (unless we feel we could sell them on for even bigger amounts later on), and Fosun will always look to take a big chunk of any profits we do make from sales. If this was about another club we'd be looking at this very differently imo. Still, beats mid-table Championship obscurity for the next 50 years by a ****ing mile.

 

[Darvo]

Fascinating article. You can understand why some other teams, managers, people, etc get concerned about us, when you read it. Whether it results in us being very successful, or ends abruptly if things change in the equation- no one knows. You can see that there are going to be lots of transfers and dealings in the future- which is exciting and worrying at the same time. We’d better not get too emotionally attached to players, that’s for sure.

Are we any different to many of the other top clubs? Personally, I don’t get what the fuss is about. “Football club in buying/selling football players ‘shocker’”.

 

[S G Wolves]

Can't stand Fosun, what have they done for Wolves??

**** team, **** players and **** manager!

 

[S G Wolves]

And forgot to add **** agent!

 

[Deleted member 3573J]

It all seems a bit like the world series of poker champion popping down mecca bingo to top up his winnings to suggest Fosun have bought us to make a profit from buying and selling footballers. A company that makes £40m a week, moving around footballers to make a few £m here and there, I've little doubt it can be achieved over many years but surely the profits will still be relatively small for a company that raked in $2.1bn last year. Even making £20m or £30m a year profit would be incredible but still nothing to them so I'm not buying it.

 

[oldgoldheart]

Ehhhhh, I don’t think so. A lot of this we already knew and has been in other publications before now. And this article is from Reuters.
There was an article on City about 18 months ago in the Guardian about world football domination ,( the financial side), by investing in clubs and academies etc.
It’s money. Does anyone at Fosun even like football, apart from the financial prospects? Buy an English club for little or nothing, invest some money, get club promoted and automatically receive at least 100 million quid the first year.
And the equity on the club now that’s it’s in the PL.....beautiful.
Overall, fantastic returns on small amount invested compared to any other low risk industry.
Football is now more corporate than ever.

Low risk industry? Seriously?

 

[WickedWolfie]

And forgot to add **** agent!

... and **** ground to come ..

 

[Chisels_n_ommers]

While I agree with this to a point, I think Fosun recognise that in order to attract the young players with huge potential they have to build a worthy team around them. The likes of Patricio, Moutinho and in particular Jimenez could be seen as "loss leaders" to enable Fosun to cash in big on Neves and co.

If they are looking at cashing in on the likes of Neves and that is their thought out model, then they will replicate the model across a larger player pool and value pool.
They haven't started yet, because they are processing the model to increase value.
And when it comes they will ramp up and that will mean Neves aplenty will pass through our doors. The time they decide to not ramp up and reduce means either they've given up on the model or that the money is falling out of football.
Ride the wave folks and enjoy the ride.

 

[VancouverWolf]

Low risk industry? Seriously?

Yes.....now of course it depends on the numbers but Fosun had and did invest money in Wolves. Of course they did their homework first.
Now, rather than buy a Wolves they could have put the money into something else....mining in S.America or wherever, dicey and might have to wait a long time for a return.
Real estate, much safer but might takes several decades to get a great return.
Shipping.....need to invest a lot more than buying a Wolves.
Sand, too many people stealing it which fluctuates prices .
Etc.

For whatever reasons, known probably only to a select few they chose Wolves and it’s worth a lot more now. In 5 or 6 years the potential return on their investment could be enormous. Ashley wants 300 million for Newcastle. He wants to recoup his loans and sell the stadium....not very attractive to investors.

We fans won the lottery.

 

[BlahBlah]

I think the article is a very good piece of journalism. It lays out the information, doesn't sensationalise, and states it offered all parties the opportunity to respond which they declined.

And it's pretty clear that it's driven by solid business principles, in that football as it's structured as a collection of private capitalist companies rather than a strictly controlled competition like the NFL, NBA or NRL giving the competitors a lease membership subject to strict financial rules, caps and regulations, follows an unsustainable financial model and Fosun and Mendes see their system as the only way to run at a profit.
This is the way that football has gone and the Championship and League 1 are full of failed clubs that got themselves into money troubles.
Clubs were run as "businesses" right up until the point that they collapsed through mismanagement, whence they suddenly became "football clubs" again to gain public sympathy and support for financial bail-outs and special treatment from HMRC, causing a loss to the taxpayer in order to save the club and allow them to skip away from debt.
If football is to run under pure business rules and rejects adequate competition, squad strength or balancing rules rules, or any useful financial safeguarding rules to ensure a level playing field between competing clubs (because FFP is a joke), then clubs can surely use whatever innovative systems they like as long as it doesn't break the law and doesn't require a bail out from somebody else.

 

[Deleted member 8455jwf]

I was just about to say exactly what you have just said. Completely basesless *******s that wasted 10 minutes of my life reading. No facts, no figures, ‘apparent’ emails which they didn’t even publish and to top it off not one person responded to them. Probably written by some jealous bitter vile fan. Mind the gap and thanks for Abraham.

Christ the level of sheer idiocy is staggering. The emails also have been released and if you could actually read rather than ****ing your pants you will see their veracity is confirmed by Mendes colleague who accuses Reuters of criminal activity in acquiring them (probably true).

 

[Burton Wolf]

All I want to know is what is the master plan to beat teams below us in the league at home? That is all. I'm off to bed.

 

[WasStefan]

That's a very bold accusation to make. My impression is that Jeff Shi, for one, likes football, and especially Wolves football. Why otherwise meet with some members of this forum? Why attend a lot of games, and give the impression of being rather close to Nuno? Why call Mendes "my friend"? etc.etc.

Yes, there are people in football club ownership with no real interest in it apart from the money-making aspects (Stan Kroenke at Arsenal, for instance), but I get the impression that most owners do have some interest in the sport. It's those who clearly don't who stand out, and they tend to be hated by the fans of the clubs they own.

Do you realise Jeff Shi doesn't own Wolves

 

[SingYourHeartsOut]

I'm not really sure how it's supposed to work. Bear with me....

Mendes reckons Jota is a promising kid. His contract is with one club but Mendes buys a 40% share (from the club presumably). Jota is then sold to Atletico and Mendes makes some money, but no longer has a stake in Jota. Then Jota comes to Wolves for a bigger fee, how does he (beyond standard agent fees) or Fosun (who have just shelled out £12m) make money there? Presumably he might get sold for more in the future, but that's true of any player. Do we have to keep moving players on before their contract runs down? If so how do we replace them with equal quality for less money and make a profit. Maybe I'm missing the point?

 

[Haggstone]

It all seems a bit like the world series of poker champion popping down mecca bingo to top up his winnings to suggest Fosun have bought us to make a profit from buying and selling footballers. A company that makes £40m a week, moving around footballers to make a few £m here and there, I've little doubt it can be achieved over many years but surely the profits will still be relatively small for a company that raked in $2.1bn last year. Even making £20m or £30m a year profit would be incredible but still nothing to them so I'm not buying it.

This! Surprised this is even still up for debate.

What I would say is that Fosun will most likely see the selling of players and reinvesting the proceeds as a means to bridge the FFP gap. That is a different strategy entirely and one that is necessary if they want to crack the top six IMO.

I can't think of a single, conceivable way how Fosun aiming to profit directly from player sales makes any sense. It's high risk, low reward (relatively) and a strategy that might bear fruit at best once or twice a year.

We are a vehicle to promote and showcase their 'brand'. Simple as that.

 

[Ivegotawolvesscarf]

I'm not really sure how it's supposed to work. Bear with me....

Mendes reckons Jota is a promising kid. His contract is with one club but Mendes buys a 40% share (from the blob presumably). Jota is then sold to Atletico and Mendes makes some money, but no longer has a stake in Jota. Then Jota comes to Wolves for a bigger fee, how does he (beyond standard agent fees) or Fosun (who have just shelled out £12m) make money there? Presumably he might get sold for more in the future, but that's true of any player. Do we have to keep moving players on before their contract runs down? If so how do we replace them with equal quality for less money and make a profit. Maybe I'm missing the point?

The point is that it isn’t Wolves who need to make the profit, the wider “alliance” between Mendes and Fosun does. Likewise, wolves don’t have to replace a player with equal quality, just a similar return on investment.

Wolves are a vehicle acting as a means to an end because contracts like the one in which Jota moved to Atlético and Gestifute took 40% of the profit are no longer legal as the governing bodies are now insisting that only clubs can have the right to own and trade player’s economic rights. So because none of Mendes, Gestifute or Fosun can own them, they brought a vehicle that can - wolves - into their business to retain their ability to do so.

Now, in the case of a new Jota, instead of buying the rights to 40% of a future transfer, they bring him to wolves, he continues his career (either at wolves or somewhere on loan, it doesn’t matter) and when he moves on the operation makes a profit.

This is all situated inside a bigger enterprise though - The business doesn’t just make money on selling on players, he also makes money from being the guy Real Madrid etc. Get on the phone to when they want to sign a specific player or clubs ask for advice when they need to fill a particular role.

The Fosun bet, and what they have invested in, is Gestifute’s ability to insert itself in to all areas of the player transfer market - buying, selling and everything in between and that is where they want to see a profit, not at the Wolves level. We’re just a cog in the machine to make sure the business model still works.

It doesn’t mean we won’t see benefits of the arrangements - Mendes has many talented prospects and there will be plenty of reasons for them to come here and it’ll obviously be easier to convince the Neves Etc. to come if we’re flying high and can offer a quality team to play in. There will also be plenty of other ways in which owning a reasonably successful club will allow them to exploit the player market that will probably be good for wolves too but it’s wrong to assume that Fosun are using their assets to act in Wolves best interest rather than using us as an asset to act in theirs.

 

[Deleted member 8455jwf]

The point is that it isn’t Wolves who need to make the profit, the wider “alliance” between Mendes and Fosun does. Likewise, wolves don’t have to replace a player with equal quality, just a similar return on investment.

Wolves are a vehicle acting as a means to an end because contracts like the one in which Jota moved to Atlético and Gestifute took 40% of the profit are no longer legal as the governing bodies are now insisting that only clubs can have the right to own and trade player’s economic rights. So because none of Mendes, Gestifute or Fosun can own them, they brought a vehicle that can - wolves - into their business to retain their ability to do so.

Now, in the case of a new Jota, instead of buying the rights to 40% of a future transfer, they bring him to wolves, he continues his career (either at wolves or somewhere on loan, it doesn’t matter) and when he moves on the operation makes a profit.

This is all situated inside a bigger enterprise though - The business doesn’t just make money on selling on players, he also makes money from being the guy Real Madrid etc. Get on the phone to when they want to sign a specific player or clubs ask for advice when they need to fill a particular role.

The Fosun bet, and what they have invested in, is Gestifute’s ability to insert itself in to all areas of the player transfer market - buying, selling and everything in between and that is where they want to see a profit, not at the Wolves level. We’re just a cog in the machine to make sure the business model still works.

It doesn’t mean we won’t see benefits of the arrangements - Mendes has many talented prospects and there will be plenty of reasons for them to come here and it’ll obviously be easier to convince the Neves Etc. to come if we’re flying high and can offer a quality team to play in. There will also be plenty of other ways in which owning a reasonably successful club will allow them to exploit the player market that will probably be good for wolves too but it’s wrong to assume that Fosun are using their assets to act in Wolves best interest rather than using us as an asset to act in theirs.

Spot on

 

[lycophilos]

Do you realise Jeff Shi doesn't own Wolves

Yes, of course I know that he doesn't!

But he's obviously quite high in the hierarchy of Fosun, as they have sent him to oversee affairs at Wolves.

My original point stands. As he admits, VancouverWolf has no idea whether anyone in Fosun likes football or not. Although it wasn't a statement, it indicated considerable doubt as to whether anyone involved did.

 

[Wanderer Til I Die]

Fascinating article. You can understand why some other teams, managers, people, etc get concerned about us, when you read it. Whether it results in us being very successful, or ends abruptly if things change in the equation- no one knows. You can see that there are going to be lots of transfers and dealings in the future- which is exciting and worrying at the same time. We’d better not get too emotionally attached to players, that’s for sure.

If that's the way Fosun want to run things that's fine by me. Just as long as we don't become the next QPR, Portsmouth or Birmingham.

 

[lycophilos]

I can't think of a single, conceivable way how Fosun aiming to profit directly from player sales makes any sense. It's high risk, low reward (relatively) and a strategy that might bear fruit at best once or twice a year.

We are a vehicle to promote and showcase their 'brand'. Simple as that.

I find that a much more believable reason for their involvement with Wolves, rather than the idea that they expect to make a vast amount of money from the Club. As Jim Bowen has pointed out, in a purely financial sense, Wolves are a very insignificant part of the Fosun empire.

 

[VancouverWolf]

The point is that it isn’t Wolves who need to make the profit, the wider “alliance” between Mendes and Fosun does. Likewise, wolves don’t have to replace a player with equal quality, just a similar return on investment.

Wolves are a vehicle acting as a means to an end because contracts like the one in which Jota moved to Atlético and Gestifute took 40% of the profit are no longer legal as the governing bodies are now insisting that only clubs can have the right to own and trade player’s economic rights. So because none of Mendes, Gestifute or Fosun can own them, they brought a vehicle that can - wolves - into their business to retain their ability to do so.

Now, in the case of a new Jota, instead of buying the rights to 40% of a future transfer, they bring him to wolves, he continues his career (either at wolves or somewhere on loan, it doesn’t matter) and when he moves on the operation makes a profit.

This is all situated inside a bigger enterprise though - The business doesn’t just make money on selling on players, he also makes money from being the guy Real Madrid etc. Get on the phone to when they want to sign a specific player or clubs ask for advice when they need to fill a particular role.

The Fosun bet, and what they have invested in, is Gestifute’s ability to insert itself in to all areas of the player transfer market - buying, selling and everything in between and that is where they want to see a profit, not at the Wolves level. We’re just a cog in the machine to make sure the business model still works.

It doesn’t mean we won’t see benefits of the arrangements - Mendes has many talented prospects and there will be plenty of reasons for them to come here and it’ll obviously be easier to convince the Neves Etc. to come if we’re flying high and can offer a quality team to play in. There will also be plenty of other ways in which owning a reasonably successful club will allow them to exploit the player market that will probably be good for wolves too but it’s wrong to assume that Fosun are using their assets to act in Wolves best interest rather than using us as an asset to act in theirs.

This is a very good post and one we should read....slowly. I don’t mean that this post is the definitive post but this and others and the Reuters article can enlighten us somewhat.
Forget about Mendes, he could be, heaven forbid, hit by a bus or join a monestry, or retire, etc.
And, let’s be very clear, Reuters, the Guardian, the NYT, FIFA, Shi,Sky or whoever, have NO idea how or what Fosun think or discuss in the boardroom.
Used to be the gate money was the thing...then came tv.... then came sponsors...then came Sky....then came the mega rich, well versed in global finance....now it’s massive corporations and multi billionaire individuals.
Football is changing faster than most of us mere mortals can fathom.

 

[Timberwolf]

I find that a much more believable reason for their involvement with Wolves, rather than the idea that they expect to make a vast amount of money from the Club. As Jim Bowen has pointed out, in a purely financial sense, Wolves are a very insignificant part of the Fosun empire.

As a standalone business, we are insignificant. However, if Wolves are successful then the exposure and media that would attract would be priceless.
The defeat against Palace, Watford, Huddersfield etc will be long forgotten but the wins against Spurs & Chelsea and other great performances will be celebrated at board level and above, like we'd won the FA Cup.

 

[Deleted member 8455jwf]

As a standalone business, we are insignificant. However, if Wolves are successful then the exposure and media that would attract would be priceless.
The defeat against Palace, Watford, Huddersfield etc will be long forgotten but the wins against Spurs & Chelsea and other great performances will be celebrated at board level and above, like we'd won the FA Cup.

Fosun | Investor Relations | Newsletters
Fosun international investor relations newsletters.

0 mention of us anywhere. You are drastically overrating the importance of "exposure".

The Chairman of Fosun meets with heads of trade for governments ffs. Don't need to beat Spurs at Wembley to raise their profile.

This arrangement isn't in any way a bad thing for us, as us being as strong as possible helps the Group make money but no point in burying head in sand and pretending Fosun brought the club because they liked the sound of Once Upon a Time.

 

[themanwhobuiltthemoon]

The point is that it isn’t Wolves who need to make the profit, the wider “alliance” between Mendes and Fosun does. Likewise, wolves don’t have to replace a player with equal quality, just a similar return on investment.

Wolves are a vehicle acting as a means to an end because contracts like the one in which Jota moved to Atlético and Gestifute took 40% of the profit are no longer legal as the governing bodies are now insisting that only clubs can have the right to own and trade player’s economic rights. So because none of Mendes, Gestifute or Fosun can own them, they brought a vehicle that can - wolves - into their business to retain their ability to do so.

Now, in the case of a new Jota, instead of buying the rights to 40% of a future transfer, they bring him to wolves, he continues his career (either at wolves or somewhere on loan, it doesn’t matter) and when he moves on the operation makes a profit.

This is all situated inside a bigger enterprise though - The business doesn’t just make money on selling on players, he also makes money from being the guy Real Madrid etc. Get on the phone to when they want to sign a specific player or clubs ask for advice when they need to fill a particular role.

The Fosun bet, and what they have invested in, is Gestifute’s ability to insert itself in to all areas of the player transfer market - buying, selling and everything in between and that is where they want to see a profit, not at the Wolves level. We’re just a cog in the machine to make sure the business model still works.

It doesn’t mean we won’t see benefits of the arrangements - Mendes has many talented prospects and there will be plenty of reasons for them to come here and it’ll obviously be easier to convince the Neves Etc. to come if we’re flying high and can offer a quality team to play in. There will also be plenty of other ways in which owning a reasonably successful club will allow them to exploit the player market that will probably be good for wolves too but it’s wrong to assume that Fosun are using their assets to act in Wolves best interest rather than using us as an asset to act in theirs.

Excellent post. Nothing really to be alarmed about from a Wolves point of view. Ethically, it's another indictment of the vast sums of money that are being trousered from the game by agents. But that's a football problem, not a Wolves/Fosun/Mendes problem as such.

 

[HKWolf]

Christ the level of sheer idiocy is staggering. The emails also have been released and if you could actually read rather than ****ing your pants you will see their veracity is confirmed by Mendes colleague who accuses Reuters of criminal activity in acquiring them (probably true).

Call me an idiot all you like, but when you try and dress up a load of ****e as fact, and then finish everything off with ‘probably true’, who’s the real ****ing idiot?

You keep believing everything you read, I’ll stick to the facts and real evidence (have we sold Neves?), not extracts from emails without any context.

 

[Manic88]

Here is a list of people who've gotten rich trading football players:
https://learn.getgrav.org/user/pages/11.troubleshooting/01.page-not-found/error-404.png

 

[Deleted member 8455jwf]

Here is a list of people who've gotten rich trading football players:
https://learn.getgrav.org/user/pages/11.troubleshooting/01.page-not-found/error-404.png

Jorge Mendes made $60 million last year. Congratulations on not considering that rich!

 

[oldgoldheart]

Yes.....now of course it depends on the numbers but Fosun had and did invest money in Wolves. Of course they did their homework first.
Now, rather than buy a Wolves they could have put the money into something else....mining in S.America or wherever, dicey and might have to wait a long time for a return.
Real estate, much safer but might takes several decades to get a great return.
Shipping.....need to invest a lot more than buying a Wolves.
Sand, too many people stealing it which fluctuates prices .
Etc.

For whatever reasons, known probably only to a select few they chose Wolves and it’s worth a lot more now. In 5 or 6 years the potential return on their investment could be enormous. Ashley wants 300 million for Newcastle. He wants to recoup his loans and sell the stadium....not very attractive to investors.

We fans won the lottery.

Mate, i am sure setting fire to money is higher risk. But football is not low risk. The point you make about ashley is proof enough. Ellis short would doubtless not talk about low risk. Neither would randy lerner

 

[Edgmond Wolf]

And forgot to add **** agent!

And **** fans who Dow sing...apparently

 

[MobNet Wolf]

Enjoy the ride, but be acutely aware that we do not know how long it lasts - that's my philosophy.

Everyday I read on this site things like "Outsiders don't understand, Fosun want us to be the biggest club in the World" etc. and while it's nice to believe that, Dave from Wednesfield or Steve from Codsall don't have the first idea about what Fosun's motives are for us. However, one thing is for sure is that they aren't a charity, and they are not invested in us for mere fun - or even just 'profile'. They are here to make money.

As long as making money aligns with us becoming a bigger and better club - great. But those ambitions don't necessarily have to align. There is likely a point, way way before we become as big as City, etc, that they decide they are at their happy medium of asset value vs. capital investment. It makes no sense for a profit-searching organisation to invest in the same manner as clubs owned by Petro-states - whose sole objective is to soften international opinion of their state.

 

[Timberwolf]

Fosun | Investor Relations | Newsletters
Fosun international investor relations newsletters.

0 mention of us anywhere. You are drastically overrating the importance of "exposure".

The Chairman of Fosun meets with heads of trade for governments ffs. Don't need to beat Spurs at Wembley to raise their profile.

This arrangement isn't in any way a bad thing for us, as us being as strong as possible helps the Group make money but no point in burying head in sand and pretending Fosun brought the club because they liked the sound of Once Upon a Time.

Lol...that's why last season Chairman Guo paraded the league champions trophy at an investors meeting and why 'Fosun' was exhibited as Black on Gold, rather than Blue lettering on White.
Yeah,of course, he's not bothered...!

 

[Ironfistedmonk]

Which football club owners make money from owning the club? Only people who profit from football are the players, agents and managers on the gravy train, most clubs are massively in debt

 

[RMNottm]

The Article is about the Mendes - Fosun relationship. This is not the extent of Fosun's involvement. The ban on 3rd party ownership only strengthens on party in that relationship. what even Fosun's plan is relegation is not part of it. I would rather help Fosun make a few quid watching the football we have seen since they took over compared with demanding an owner p*sses money up the wall for what came before.