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Selling to buy. The new normal?

WolfLing

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"Why aren’t we doing as many ‘bits’ as other clubs?"

"Why have Fosun turned the taps off?"

"Why do we have to sell to buy?"

"Our owners have no interest in our club anymore!"


Some things posted on there all the time, amongst many other criticisms of our lack of spending and overall strategy.

But why? What’s changed for Fosun?

I don’t think anything has changed with Fosun other than their plan. Like with any other business, an analysis of the market conditions will drive that plan.

Football is changing. The changes have already been introduced this month, with a 3 year run in period.

Part of the new UEFA FFP regulations limits spending on wages, transfers, and agent fees to 70% of club revenue.

Assessments will be performed on a timely basis and breaches will result in pre-defined financial penalties and sporting measures. The new regulations will come into force in June 2022 and will be phased in over a 3-year period.

All a bit wishy-washy at the moment, but it’s the 70% rule that’s the complete game-changer in my opinion. Here's why.

If the new rules were imposed this month in full, rather than with the 3-year phased implementation, us and 9 others currently in the Premier League would fail the test on wages alone. Spurs are currently the lowest on 57%, although I would imagine Conte is pushing for that to change!

We are just above the 70% on wages alone, with our wage bill 72% of our turnover.

Palace (93%), Southampton (90%), Everton (89%), Leicester (85%), Watford (80%) Newcastle (79%), Brighton (78%), Chelsea (77%), Burnley (75%), Villa (75%), Norwich (75%) and Arsenal (73%) all sat above us last season.

At the moment, these rules will only apply to clubs in European competitions, but anyone not in a relegation battle could potentially qualify for Europe if they have a good season, so clubs will need to pay close attention to them regardless, or risk being burned by 'pre-defined financial penalties and sporting measures' if they do qualify.

The Premier League rules have not been updated or published yet either, so whether they will be changed and how close they will look to the UEFA rules is unknown, but I would expect something will come out soon on this.


What does this mean for us?

Fast-forward 3 years from now when the rule is fully in place. We would fail any tests without spending another penny, as our wage bill is already 72% of our revenues. I would imagine with releasing the players we have since this was published, this would come down, so if a test was done tomorrow, we would probably be fine.

But assuming we push the wages to the maximum 70%, as most clubs will, any money for new transfers and new wages has to be generated by profits or player sales.

No real change for us!

Fosun can spend money if they want to, they have spent money in the past, so why the change in more recent strategy?

I think people are too quick to throw around accusations of lack of planning or lack of foresight from our owners, when if anything, they appear to be very shrewd operators, that look at how a market will change and develop before making strategic decisions.

If we get our house in order before everyone else, surely that puts us in a very strong position in the future?


What does it mean for others?

Villa are a good club to use as an example, as they are often held on a pedestal about how their owners throw money around like confetti. To me they are owners that are in it for vanity reasons and don’t really mind if their club makes a loss, as they will cover it as best they can. Nothing wrong with that currently, but obviously a different approach to Fosun and an approach that will need to be tweaked going forward.

UEFA’s break-even rule for sustainability (the one we were stung by) has also been changed (probably to accommodate PSG), so clubs can now lose €60m a season (approx. £51m). How clubs could use this to manipulate the 70% rule, I’m not sure (any suggestions welcome), as I don’t think any cash injection to cover losses, or any loans would positively impact revenues.

I suspect that even at a club where owners inject the maximum amount of capital allowed to cover losses, will still have to comply with the 70% rule.

So someone like Villa, who are currently at 75% wages to revenues, would need to shed 5% off their wage bill to comply.

Then any spending on new transfers and new wages has to be generated by profits or player sales. They don’t make a profit, as their owners inject capital to cover their losses, so player sales is their only avenue for raising funds.

Newly promoted clubs will have an advantage in the transfer market, as they will have a massively increased turnover and a relatively small wage bill, so more room for manoeuvre initially after promotion.

The big powerhouses of football, with turnovers 2 or 3 times that of most other clubs will have an advantage in terms of overall spending power, but I think that advantage will be narrowed by their excessive wage bills.

Take Man United as another example, the highest net spend in the last 10 years (£903m). Turnover of £500m+, with a wages to turnover ratio of 65%. They have 5% of their revenue to spend on fees and wages to take them to the 70% level. A grand total of £25m

If you assume transfer fee will be accounted for in a similar way to how they are now, by dividing the transfer fee over the term of the contract, they could spend £125m on players on 5 years contracts (5 x 25), assuming they free up some wages of players leaving or being out of contract.

But overall, their spending ability will probably be lower than it is currently. Could this be why Man City and Liverpool have both taken the decision to spend big on young strikers now before the new rules fully bite?


What’s the best strategy for now?

If I were running a football club, with these changes coming into force already and being phased in over the next 3 years, I would be looking to get my house in order as soon as possible.

Dos
  • Running in profit to increase the amount you have to spend and natural increases in your wage bill.
  • Operating a controlled, tiered wage structure.
  • Concentrating most of your resources on your first XI and buying younger players with high potential on long-term, relatively low pay contracts as backup. This keeps the average age and overall wage bill down and also future proofs you going forward (as you need to spend less on replacements).
  • Growing off-field revenues to improve revenues and profitability.
Do all these things remind you of a particular strategy?!

Don’ts
  • Spending over the odds for any player in terms of fee and wages (United)
  • Having a large squad of older, over-paid, average players, on long term contracts (Everton)
  • Paying transfer fees for older star players on high wages with no re-sale value, as by the time their contracts have finished, you will not have any available resources to replace them, assuming you are maxed out at the 70% for wages (Villa)
To use Villa as a specific example again, if Coutinho sees out his 4 years at Villa, then leaves for free, they will have £8.5m in wages freed up, but no cash to replace him.

They either hope that a youngster can develop enough in those 4 years to replace his level of contribution, sign another older player on a free transfer on similar wages, or they go into the following season with a hole they are unable to fill.

That’s an extreme example, but one that illustrates how important succession planning for your first team is becoming, as it will become more difficult to go out and just buy players to fill a gap, without planning for it!


What does the future hold?

I think a lot of clubs will push this right to the wire. They will continue ploughing forward with their broken business models until the very last minute and then panic when the regulations take full hold (especially if they qualify for Europe unexpectedly!).

3 years from now, I can see a summer window like never before. Record amounts of players being released from their contracts and players being allowed to leave for well below their market value, just so clubs can shift players off their books to comply.

Longer term, I think this is a positive move, as it is effectively a soft cap on wages and transfer fees, which are getting out of control.

It also makes the hoarding of large, highly paid squads of players less likely, with bigger clubs unwilling to pay bigger wages to those that aren’t playing. That could be a good thing for clubs like us, as players that could be a star player for us, won’t be sitting on the benches of bigger clubs. Potentially a good thing for the progression of youngsters too.

So transfer fees reducing, wages reducing, an increase in available higher-quality players, more evenly distributed amongst clubs.

That’s hopefully what we will see, as I can't see any negatives in those things.

The next few years for us will be about treading water and maintaining our Premier League status.

We already have our house in order, and we are already doing the right things for the future. If we make sure our house is in better order than most, we are in the best possible position to capitalise when the panic sets in.

Short-term however, that might mean a competitive disadvantage as we adopt a stricter model to the rest of the market. But this should change to a competitive advantage longer term.

In my opinion, we are playing a waiting game. Waiting for football to financially implode on itself and being one of the few clubs in a position to pick up some of the pieces.

That’s certainly not a mouth-watering prospect for the next few years, but one that fills me with some confidence for the future beyond that.

The real risk is that the conditions to tread water become impossible, the currents become too strong, the competitive disadvantage becomes too wide and we sink.

But if you look at the long-term, I really don’t see that there’s a viable alternative.


This brings together a few discussion from a few different threads, but also worth checking out @cannockwolves thread on sustainability (Sustainability)
 

WickedWolfie

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"Why aren’t we doing as many ‘bits’ as other clubs?"

"Why have Fosun turned the taps off?"

"Why do we have to sell to buy?"

"Our owners have no interest in our club anymore!"


Some things posted on there all the time, amongst many other criticisms of our lack of spending and overall strategy.

But why? What’s changed for Fosun?

I don’t think anything has changed with Fosun other than their plan. Like with any other business, an analysis of the market conditions will drive that plan.

Football is changing. The changes have already been introduced this month, with a 3 year run in period.

Part of the new UEFA FFP regulations limits spending on wages, transfers, and agent fees to 70% of club revenue.

Assessments will be performed on a timely basis and breaches will result in pre-defined financial penalties and sporting measures. The new regulations will come into force in June 2022 and will be phased in over a 3-year period.

All a bit wishy-washy at the moment, but it’s the 70% rule that’s the complete game-changer in my opinion. Here's why.

If the new rules were imposed this month in full, rather than with the 3-year phased implementation, us and 9 others currently in the Premier League would fail the test on wages alone. Spurs are currently the lowest on 57%, although I would imagine Conte is pushing for that to change!

We are just above the 70% on wages alone, with our wage bill 72% of our turnover.

Palace (93%), Southampton (90%), Everton (89%), Leicester (85%), Watford (80%) Newcastle (79%), Brighton (78%), Chelsea (77%), Burnley (75%), Villa (75%), Norwich (75%) and Arsenal (73%) all sat above us last season.

At the moment, these rules will only apply to clubs in European competitions, but anyone not in a relegation battle could potentially qualify for Europe if they have a good season, so clubs will need to pay close attention to them regardless, or risk being burned by 'pre-defined financial penalties and sporting measures' if they do qualify.

The Premier League rules have not been updated or published yet either, so whether they will be changed and how close they will look to the UEFA rules is unknown, but I would expect something will come out soon on this.


What does this mean for us?

Fast-forward 3 years from now when the rule is fully in place. We would fail any tests without spending another penny, as our wage bill is already 72% of our revenues. I would imagine with releasing the players we have since this was published, this would come down, so if a test was done tomorrow, we would probably be fine.

But assuming we push the wages to the maximum 70%, as most clubs will, any money for new transfers and new wages has to be generated by profits or player sales.

No real change for us!

Fosun can spend money if they want to, they have spent money in the past, so why the change in more recent strategy?

I think people are too quick to throw around accusations of lack of planning or lack of foresight from our owners, when if anything, they appear to be very shrewd operators, that look at how a market will change and develop before making strategic decisions.

If we get our house in order before everyone else, surely that puts us in a very strong position in the future?


What does it mean for others?

Villa are a good club to use as an example, as they are often held on a pedestal about how their owners throw money around like confetti. To me they are owners that are in it for vanity reasons and don’t really mind if their club makes a loss, as they will cover it as best they can. Nothing wrong with that currently, but obviously a different approach to Fosun and an approach that will need to be tweaked going forward.

UEFA’s break-even rule for sustainability (the one we were stung by) has also been changed (probably to accommodate PSG), so clubs can now lose €60m a season (approx. £51m). How clubs could use this to manipulate the 70% rule, I’m not sure (any suggestions welcome), as I don’t think any cash injection to cover losses, or any loans would positively impact revenues.

I suspect that even at a club where owners inject the maximum amount of capital allowed to cover losses, will still have to comply with the 70% rule.

So someone like Villa, who are currently at 75% wages to revenues, would need to shed 5% off their wage bill to comply.

Then any spending on new transfers and new wages has to be generated by profits or player sales. They don’t make a profit, as their owners inject capital to cover their losses, so player sales is their only avenue for raising funds.

Newly promoted clubs will have an advantage in the transfer market, as they will have a massively increased turnover and a relatively small wage bill, so more room for manoeuvre initially after promotion.

The big powerhouses of football, with turnovers 2 or 3 times that of most other clubs will have an advantage in terms of overall spending power, but I think that advantage will be narrowed by their excessive wage bills.

Take Man United as another example, the highest net spend in the last 10 years (£903m). Turnover of £500m+, with a wages to turnover ratio of 65%. They have 5% of their revenue to spend on fees and wages to take them to the 70% level. A grand total of £25m

If you assume transfer fee will be accounted for in a similar way to how they are now, by dividing the transfer fee over the term of the contract, they could spend £125m on players on 5 years contracts (5 x 25), assuming they free up some wages of players leaving or being out of contract.

But overall, their spending ability will probably be lower than it is currently. Could this be why Man City and Liverpool have both taken the decision to spend big on young strikers now before the new rules fully bite?


What’s the best strategy for now?

If I were running a football club, with these changes coming into force already and being phased in over the next 3 years, I would be looking to get my house in order as soon as possible.

Dos
  • Running in profit to increase the amount you have to spend and natural increases in your wage bill.
  • Operating a controlled, tiered wage structure.
  • Concentrating most of your resources on your first XI and buying younger players with high potential on long-term, relatively low pay contracts as backup. This keeps the average age and overall wage bill down and also future proofs you going forward (as you need to spend less on replacements).
  • Growing off-field revenues to improve revenues and profitability.
Do all these things remind you of a particular strategy?!

Don’ts
  • Spending over the odds for any player in terms of fee and wages (United)
  • Having a large squad of older, over-paid, average players, on long term contracts (Everton)
  • Paying transfer fees for older star players on high wages with no re-sale value, as by the time their contracts have finished, you will not have any available resources to replace them, assuming you are maxed out at the 70% for wages (Villa)
To use Villa as a specific example again, if Coutinho sees out his 4 years at Villa, then leaves for free, they will have £8.5m in wages freed up, but no cash to replace him.

They either hope that a youngster can develop enough in those 4 years to replace his level of contribution, sign another older player on a free transfer on similar wages, or they go into the following season with a hole they are unable to fill.

That’s an extreme example, but one that illustrates how important succession planning for your first team is becoming, as it will become more difficult to go out and just buy players to fill a gap, without planning for it!


What does the future hold?

I think a lot of clubs will push this right to the wire. They will continue ploughing forward with their broken business models until the very last minute and then panic when the regulations take full hold (especially if they qualify for Europe unexpectedly!).

3 years from now, I can see a summer window like never before. Record amounts of players being released from their contracts and players being allowed to leave for well below their market value, just so clubs can shift players off their books to comply.

Longer term, I think this is a positive move, as it is effectively a soft cap on wages and transfer fees, which are getting out of control.

It also makes the hoarding of large, highly paid squads of players less likely, with bigger clubs unwilling to pay bigger wages to those that aren’t playing. That could be a good thing for clubs like us, as players that could be a star player for us, won’t be sitting on the benches of bigger clubs. Potentially a good thing for the progression of youngsters too.

So transfer fees reducing, wages reducing, an increase in available higher-quality players, more evenly distributed amongst clubs.

That’s hopefully what we will see, as I can't see any negatives in those things.

The next few years for us will be about treading water and maintaining our Premier League status.

We already have our house in order, and we are already doing the right things for the future. If we make sure our house is in better order than most, we are in the best possible position to capitalise when the panic sets in.

Short-term however, that might mean a competitive disadvantage as we adopt a stricter model to the rest of the market. But this should change to a competitive advantage longer term.

In my opinion, we are playing a waiting game. Waiting for football to financially implode on itself and being one of the few clubs in a position to pick up some of the pieces.

That’s certainly not a mouth-watering prospect for the next few years, but one that fills me with some confidence for the future beyond that.

The real risk is that the conditions to tread water become impossible, the currents become too strong, the competitive disadvantage becomes too wide and we sink.

But if you look at the long-term, I really don’t see that there’s a viable alternative.


This brings together a few discussion from a few different threads, but also worth checking out @cannockwolves thread on sustainability (Sustainability)
Eye opening and thought-provoking. Thank you for a comprehensive, coherent, all-round excellent post.
 

JayStringer

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I never understand why any fan wants Wolves to be anything other than a self-sustaining entity. Asking Jack Hayward, Steve Morgan, Fosun or anyone to continue putting their hands in their pockets rather than building Wolves to be able to put their own hands in their own pockets is a madness that just leads to boom and bust. And Wolves, more than any club in the Premier League, should know what that looks like.

There have been failings down the years. Jack Hayward threw money (very well meaning) at people who didn't deliver, and was then too burned to invest a sensible amount in the club at a time that could have stabilized in the top flight. Morgan actually had decent ideas about building a self-sustaining premier league club (a larger stadium, investment in the academy) but just didn't have the money required to invest in getting the club to that point. The main difference between Morgan and Fosun isn't what they want the club to be, it's in the amount of money they were each willing/able to invest to reach that point. Fosun came in and spent over 100 million in getting the club stabilised in the premier league, but they want a club that sustains itself. There's also not much difference in ideas between Fosun and Fenway, except that Fenway started from a much higher base. But Liverpool are essentially a sell-to-buy club, with other large revenue streams helping to give them more leeway and options.

I have zero problem with this. And see no reason for Fosun to invest further (outside of perhaps loaning us the money to fund the stadium, or loaning us money to solve the liquidity problem we seem to have.)

People read a lot into the word 'investment' and continue to assume Fosun want to sell up at some point to return the investment. But that word has many different applications in business. Sometimes a loss leader is an investment. Sometimes building a self-sustaining business that allows you to grow other markets is an investment. Fosun can happily make back their investment in Wolves tenfold without ever having to take money out of Wolves, just by having our brand in their portfolio and all of the other markets that opens up for them.

When it comes to our transfer business, I 100% support the club in taking the long view and making sure to stay well within the rules. Personally, I think both last summer and this summer they should be willing to make a larger net loss in transfers (say 30-40 million) without going 'all in' on every penny the rules will allow them to spend. Hold back plenty of wiggle room, for safety, but still invest more than they have. I think one more ambitious net loss summer would be all that's needed to push us up a level and unlock the top six, and choosing not to take that approach could mean we stay outside of the elite. However, it's not my money, and the people who make the decisions have access to information I don't (i.e., all of it...) so I'm not going to throw my toys out of the pram or look for conspiracy or accuse Fosun of lying simply because they have chosen a path that doesn't comply 100% with my exact wishes.

I judge them on what they do, not what I want them to do. What they've done in their first six years is establish us as a premier league club -top half in three out of four seasons- which has never happened in my life before. The next stage is to see what they do next, and I will judge them based on that.
 

WolfLing

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However, it's not my money, and the people who make the decisions have access to information I don't (i.e., all of it...) so I'm not going to throw my toys out of the pram or look for conspiracy or accuse Fosun of lying simply because they have chosen a path that doesn't comply 100% with my exact wishes.

I judge them on what they do, not what I want them to do. What they've done in their first six years is establish us as a premier league club -top half in three out of four seasons- which has never happened in my life before. The next stage is to see what they do next, and I will judge them based on that.

Couldn't have summed it up any better myself.
 

Northampton_wolf

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Its a fantastic post and thread,

However you hedge your bets, not you specifically/fosun.

If the rationale is to to ensure we dont fall foul of FFP and business sense of security hence branching out into esports etc.

It only works for the club, if we dont get relegated.

If we dont do anything and we lose big talents to more ambitious clubs, all of the pre-planning becomes futile.
 

WolfLing

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Its a fantastic post and thread,

However you hedge your bets, not you specifically/fosun.

If the rationale is to to ensure we dont fall foul of FFP and business sense of security hence branching out into esports etc.

It only works for the club, if we dont get relegated.

If we dont do anything and we lose big talents to more ambitious clubs, all of the pre-planning becomes futile.

Agree. It's a risk.

But I don't buy into this, "if we don't have a good window we are relegation fodder" story. That's if we sell our best players and don't reinvest the funds.

If Neves stays, our squad as it is now, with all our long-term injuries back fit with a pre-season under their belt, returning loanees and youngsters a year older is easily top 12, probably top 10, top 8 if we have a bit of luck with injuries.
 

Ewok vs Wolf

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Excellent opening post.
Treading water is the term i have used before, just absolutly vital we don't get sucked into a relegation battle. As we saw with Everton last season anyone outside the top 6 can easily get into trouble
 

Northampton_wolf

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Agree. It's a risk.

But I don't buy into this, "if we don't have a good window we are relegation fodder" story. That's if we sell our best players and don't reinvest the funds.

If Neves stays, our squad as it is now, with all our long-term injuries back fit with a pre-season under their belt, returning loanees and youngsters a year older is easily top 12, probably top 10, top 8 if we have a bit of luck with injuries.

Just to play devils advocate, that squad, if we dont sell neves, is now light (Saiss and Marcal). relegation form last 15, replicate that with the remaining lack of goals. We could be in trouble.

Neto could pull up trees next year and it revive Raul with them both getting double figure tallies, and everything will be alright.

Still a worry, moutinho will have another year in his legs, as will Jimenez
 

WickedWolfie

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I never understand why any fan wants Wolves to be anything other than a self-sustaining entity. Asking Jack Hayward, Steve Morgan, Fosun or anyone to continue putting their hands in their pockets rather than building Wolves to be able to put their own hands in their own pockets is a madness that just leads to boom and bust. And Wolves, more than any club in the Premier League, should know what that looks like.

There have been failings down the years. Jack Hayward threw money (very well meaning) at people who didn't deliver, and was then too burned to invest a sensible amount in the club at a time that could have stabilized in the top flight. Morgan actually had decent ideas about building a self-sustaining premier league club (a larger stadium, investment in the academy) but just didn't have the money required to invest in getting the club to that point. The main difference between Morgan and Fosun isn't what they want the club to be, it's in the amount of money they were each willing/able to invest to reach that point. Fosun came in and spent over 100 million in getting the club stabilised in the premier league, but they want a club that sustains itself. There's also not much difference in ideas between Fosun and Fenway, except that Fenway started from a much higher base. But Liverpool are essentially a sell-to-buy club, with other large revenue streams helping to give them more leeway and options.

I have zero problem with this. And see no reason for Fosun to invest further (outside of perhaps loaning us the money to fund the stadium, or loaning us money to solve the liquidity problem we seem to have.)

People read a lot into the word 'investment' and continue to assume Fosun want to sell up at some point to return the investment. But that word has many different applications in business. Sometimes a loss leader is an investment. Sometimes building a self-sustaining business that allows you to grow other markets is an investment. Fosun can happily make back their investment in Wolves tenfold without ever having to take money out of Wolves, just by having our brand in their portfolio and all of the other markets that opens up for them.

When it comes to our transfer business, I 100% support the club in taking the long view and making sure to stay well within the rules. Personally, I think both last summer and this summer they should be willing to make a larger net loss in transfers (say 30-40 million) without going 'all in' on every penny the rules will allow them to spend. Hold back plenty of wiggle room, for safety, but still invest more than they have. I think one more ambitious net loss summer would be all that's needed to push us up a level and unlock the top six, and choosing not to take that approach could mean we stay outside of the elite. However, it's not my money, and the people who make the decisions have access to information I don't (i.e., all of it...) so I'm not going to throw my toys out of the pram or look for conspiracy or accuse Fosun of lying simply because they have chosen a path that doesn't comply 100% with my exact wishes.

I judge them on what they do, not what I want them to do. What they've done in their first six years is establish us as a premier league club -top half in three out of four seasons- which has never happened in my life before. The next stage is to see what they do next, and I will judge them based on that.
Another erudite, thoughtful, well argued contribution, thanks....

Am l on the Mix???? lol
 

JayStringer

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If we dont do anything and we lose big talents to more ambitious clubs, all of the pre-planning becomes futile.

It's a fair concern to have, but I'd say it's more down to how effective the club is with succession planning. Liverpool sold Coutinho and used that money to buy, among others, VVD. I saw quite a lot of VVD at Celtic and he was always a standout. Celtic have a good track record of finding such players. Then elite clubs come in and throw silly money at them. Celtic have a ceiling though because of the market they are in, they can be as great (or as poor) as they want at identifying players, they're still constrained within the limit of what they can achieve as an SPL club. We too have a limit, a ceiling, but ours is more moveable because we're in the top market. So if Wolves can be as good as someone like at Celtic at identifying talent, and then sell that talent on for silly money a few years later, then they can do that while also raising their own celing. If Wolves can become the club that finds the next VVD, then there is value in doing it. And, in fairness, under Fosun Wolves have a good track record of identifying talent -even if management hasn't always made the best use of them.

TLDR:

I think you raise a fair concern. I will be heartbroken when Neves goes, and it's fair to be concerned about weakening the team at the expense of rivals. BUT if we sell Neves to an elite club, then we haven't sold him to rival (realistically, outside of being able to go toe-to-toe with them over 90 mins here and there) but investing that money wisely would mean we get closer to them. It can only be judged down the line, based on whether it works or not.
 

WolfLing

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Just to play devils advocate that squad, if we dont sell neves is now (light Saiss and Marcal). relegation form last 15, replicated that with the remaining lack of goals. We could be in trouble.

Neto could pull up trees next year and it revive Raul with them both getting double figure tallies, and everything will be alright.

Still a worry, moutinho will have another year in hes legs, as will jiminez

Yep. It's a worry.

But those same players were also responsible for the first half of the season. We finished where we should have finished based on the whole season.

Gibbs-White will make a big difference I think.

Saiss is a loss, but Boly getting over his issues helps with that.

And Marcal is very replaceable, especially now Jonny is fully fit.

I think Fabio and Neto will have good seasons next year too.
 

WickedWolfie

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Yep. It's a worry.

But those same players were also responsible for the first half of the season. We finished where we should have finished based on the whole season.

Gibbs-White will make a big difference I think.

Saiss is a loss, but Boly getting over his issues helps with that.

And Marcal is very replaceable, especially now Jonny is fully fit.

I think Fabio and Neto will have good seasons next year too.
I would have said that the two players with big question marks over them are Raul and Big Willy. Both had serious injury problems and struggled when they came back. If next season they are back to their best we will be in a good place. If they don't we may have problems.
 

WeAreTheWolvesII

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Are you not giving far too much credit to these rules?

So if a club has a wage bill of 75% instead of 70% what's going to happen? I would imagine not a lot. So, whilst I get your theory I don't think it will be much of an issue and I don't think football will implode as you predict. They'll just change things if all the clubs want it changed and if not, clubs will pay the small fines or whatever that comes their way.

I know what you're saying is right technically but I don't think it will happen.

Also, I think you're giving Fosun a bit too much credit initially. We lost £1m a week in the promotion season. Is that sensible and responsible?

They spunked millions and millions on loads of rubbish initially and we were effectively one-year away from being another Sheffield Wednesday or Birmingham City in that FFP would have had a stranglehold on us. Thankfully, we won promotion so that bridge was never crossed. That was bold. That was a massive risk and thankfully it's one that paid off.

Let's not pretend otherwise, we were effectively the Man City of the Championship then.

Buying players that were out of our league, paying wages that we couldn't afford all on the gamble that we would go up.

So, I think a LOT has changed with Fosun's strategy. They're now not willing to put any money in and it goes totally against what they were about, it also goes against their insistence they look for value.

Good post with the details on the impact this could have but I think you're looking far too much into it, it's much simpler IMO - they've stopped putting money in for whatever reason and there is no long-term strategy or approach.
 

Fenrir_

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As you mention in your excellent OP @WolfLing transfers are also counted, and something that often flies over a lot of people's heads is the continuous cost of amortisation.

If we had our wage bill at 70% of our turnover, we would have to then generate all the funds to cover amortisation costs (which I think were around £62m last year) just to break even with the new FFP, so imagine getting top price for Neves and still only being able to spend around £10m! This is where the 70% figure for total spend looks really daunting - but it's slightly less daunting if you can see it coming and clubs that are going on splurges are going to get hit incredibly hard, especially if the PL follows suit with FFP (I believe La Liga has a similar model to what UEFA are introducing)

There's no doubt in my mind that the club are going about it the right way to make sure we don't get stung by these changes, which in turn could give us a huge advantage over the likes of Villa, Everton and Newcastle who's spending will catch up with them (Everton's already has)
 

YouGottaRaulWithIt

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"Why aren’t we doing as many ‘bits’ as other clubs?"

"Why have Fosun turned the taps off?"

"Why do we have to sell to buy?"


"Our owners have no interest in our club anymore!"


Some things posted on there all the time, amongst many other criticisms of our lack of spending and overall strategy.

But why? What’s changed for Fosun?

I don’t think anything has changed with Fosun other than their plan. Like with any other business, an analysis of the market conditions will drive that plan.

Football is changing. The changes have already been introduced this month, with a 3 year run in period.

Part of the new UEFA FFP regulations limits spending on wages, transfers, and agent fees to 70% of club revenue.

Assessments will be performed on a timely basis and breaches will result in pre-defined financial penalties and sporting measures. The new regulations will come into force in June 2022 and will be phased in over a 3-year period.

All a bit wishy-washy at the moment, but it’s the 70% rule that’s the complete game-changer in my opinion. Here's why.

If the new rules were imposed this month in full, rather than with the 3-year phased implementation, us and 9 others currently in the Premier League would fail the test on wages alone. Spurs are currently the lowest on 57%, although I would imagine Conte is pushing for that to change!

We are just above the 70% on wages alone, with our wage bill 72% of our turnover.

Palace (93%), Southampton (90%), Everton (89%), Leicester (85%), Watford (80%) Newcastle (79%), Brighton (78%), Chelsea (77%), Burnley (75%), Villa (75%), Norwich (75%) and Arsenal (73%) all sat above us last season.

At the moment, these rules will only apply to clubs in European competitions, but anyone not in a relegation battle could potentially qualify for Europe if they have a good season, so clubs will need to pay close attention to them regardless, or risk being burned by 'pre-defined financial penalties and sporting measures' if they do qualify.

The Premier League rules have not been updated or published yet either, so whether they will be changed and how close they will look to the UEFA rules is unknown, but I would expect something will come out soon on this.


What does this mean for us?

Fast-forward 3 years from now when the rule is fully in place. We would fail any tests without spending another penny, as our wage bill is already 72% of our revenues. I would imagine with releasing the players we have since this was published, this would come down, so if a test was done tomorrow, we would probably be fine.

But assuming we push the wages to the maximum 70%, as most clubs will, any money for new transfers and new wages has to be generated by profits or player sales.

No real change for us!

Fosun can spend money if they want to, they have spent money in the past, so why the change in more recent strategy?

I think people are too quick to throw around accusations of lack of planning or lack of foresight from our owners, when if anything, they appear to be very shrewd operators, that look at how a market will change and develop before making strategic decisions.

If we get our house in order before everyone else, surely that puts us in a very strong position in the future?


What does it mean for others?

Villa are a good club to use as an example, as they are often held on a pedestal about how their owners throw money around like confetti. To me they are owners that are in it for vanity reasons and don’t really mind if their club makes a loss, as they will cover it as best they can. Nothing wrong with that currently, but obviously a different approach to Fosun and an approach that will need to be tweaked going forward.

UEFA’s break-even rule for sustainability (the one we were stung by) has also been changed (probably to accommodate PSG), so clubs can now lose €60m a season (approx. £51m). How clubs could use this to manipulate the 70% rule, I’m not sure (any suggestions welcome), as I don’t think any cash injection to cover losses, or any loans would positively impact revenues.

I suspect that even at a club where owners inject the maximum amount of capital allowed to cover losses, will still have to comply with the 70% rule.

So someone like Villa, who are currently at 75% wages to revenues, would need to shed 5% off their wage bill to comply.

Then any spending on new transfers and new wages has to be generated by profits or player sales. They don’t make a profit, as their owners inject capital to cover their losses, so player sales is their only avenue for raising funds.

Newly promoted clubs will have an advantage in the transfer market, as they will have a massively increased turnover and a relatively small wage bill, so more room for manoeuvre initially after promotion.

The big powerhouses of football, with turnovers 2 or 3 times that of most other clubs will have an advantage in terms of overall spending power, but I think that advantage will be narrowed by their excessive wage bills.

Take Man United as another example, the highest net spend in the last 10 years (£903m). Turnover of £500m+, with a wages to turnover ratio of 65%. They have 5% of their revenue to spend on fees and wages to take them to the 70% level. A grand total of £25m

If you assume transfer fee will be accounted for in a similar way to how they are now, by dividing the transfer fee over the term of the contract, they could spend £125m on players on 5 years contracts (5 x 25), assuming they free up some wages of players leaving or being out of contract.

But overall, their spending ability will probably be lower than it is currently. Could this be why Man City and Liverpool have both taken the decision to spend big on young strikers now before the new rules fully bite?


What’s the best strategy for now?

If I were running a football club, with these changes coming into force already and being phased in over the next 3 years, I would be looking to get my house in order as soon as possible.

Dos
  • Running in profit to increase the amount you have to spend and natural increases in your wage bill.
  • Operating a controlled, tiered wage structure.
  • Concentrating most of your resources on your first XI and buying younger players with high potential on long-term, relatively low pay contracts as backup. This keeps the average age and overall wage bill down and also future proofs you going forward (as you need to spend less on replacements).
  • Growing off-field revenues to improve revenues and profitability.
Do all these things remind you of a particular strategy?!

Don’ts
  • Spending over the odds for any player in terms of fee and wages (United)
  • Having a large squad of older, over-paid, average players, on long term contracts (Everton)
  • Paying transfer fees for older star players on high wages with no re-sale value, as by the time their contracts have finished, you will not have any available resources to replace them, assuming you are maxed out at the 70% for wages (Villa)
To use Villa as a specific example again, if Coutinho sees out his 4 years at Villa, then leaves for free, they will have £8.5m in wages freed up, but no cash to replace him.

They either hope that a youngster can develop enough in those 4 years to replace his level of contribution, sign another older player on a free transfer on similar wages, or they go into the following season with a hole they are unable to fill.

That’s an extreme example, but one that illustrates how important succession planning for your first team is becoming, as it will become more difficult to go out and just buy players to fill a gap, without planning for it!


What does the future hold?

I think a lot of clubs will push this right to the wire. They will continue ploughing forward with their broken business models until the very last minute and then panic when the regulations take full hold (especially if they qualify for Europe unexpectedly!).

3 years from now, I can see a summer window like never before. Record amounts of players being released from their contracts and players being allowed to leave for well below their market value, just so clubs can shift players off their books to comply.

Longer term, I think this is a positive move, as it is effectively a soft cap on wages and transfer fees, which are getting out of control.

It also makes the hoarding of large, highly paid squads of players less likely, with bigger clubs unwilling to pay bigger wages to those that aren’t playing. That could be a good thing for clubs like us, as players that could be a star player for us, won’t be sitting on the benches of bigger clubs. Potentially a good thing for the progression of youngsters too.

So transfer fees reducing, wages reducing, an increase in available higher-quality players, more evenly distributed amongst clubs.

That’s hopefully what we will see, as I can't see any negatives in those things.

The next few years for us will be about treading water and maintaining our Premier League status.

We already have our house in order, and we are already doing the right things for the future. If we make sure our house is in better order than most, we are in the best possible position to capitalise when the panic sets in.

Short-term however, that might mean a competitive disadvantage as we adopt a stricter model to the rest of the market. But this should change to a competitive advantage longer term.

In my opinion, we are playing a waiting game. Waiting for football to financially implode on itself and being one of the few clubs in a position to pick up some of the pieces.

That’s certainly not a mouth-watering prospect for the next few years, but one that fills me with some confidence for the future beyond that.

The real risk is that the conditions to tread water become impossible, the currents become too strong, the competitive disadvantage becomes too wide and we sink.

But if you look at the long-term, I really don’t see that there’s a viable alternative.


This brings together a few discussion from a few different threads, but also worth checking out @cannockwolves thread on sustainability (Sustainability)
You can't come on this thread and start using facts, it's not fair or reasonable.

You make some good points obviously... but as you say, these rules don't come into force for 3 years, and will only apply to teams that qualify for Europe.

The way we are going we may not be in the premier league by then, and have bugger all chance of finishing in the top 6.

Other facts you could have mentioned are that China has lost interest in football. Chinese companies no longer own football clubs and their league has collapsed. We were promised a new stadium, we haven't even got a decent temporary stand.

Also, the UK and China had a major falling out and chinese firms are being told to take their investment money back to China. Geopolitics trumps FFP rules.
 

HKWolf

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I like Wolflings explanation above, but I gave up caring about FFP 1 year ago when Shi lied and used it as an excuse not to spend. It’s still an excuse as far as I’m concerned as it doesn’t impact us currently, won’t in the future and hasn’t for over a year.

Even with a rule change I’ll put it like this: Spending £100mill on 3 players each on £100k per week on 5 year contracts equates to £35.6mill for FFP purposes. We made over £20mill from our Europa league run. You could double that for finishing in the top 4. £100 mill would easily get us Nunes, Caleta-Car and Palhinha whilst keeping Traore and Neves. You would guarantee top 6, probably top 4 with that team and squad, and we would be in no worse a position regarding FFP than we are today. We would be better off and so would all the other **** like e-sports, grasshoppers etc.

He who dares wins and they have given up daring.
 

HKWolf

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I totally ignored all the money we would recover selling tat like Cutrone, Sanderson and not needed players like Boly and Dendoncker.
 

Rhoswolf

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Yep. It's a worry.

But those same players were also responsible for the first half of the season. We finished where we should have finished based on the whole season.

Gibbs-White will make a big difference I think.

Saiss is a loss, but Boly getting over his issues helps with that.

And Marcal is very replaceable, especially now Jonny is fully fit.

I think Fabio and Neto will have good seasons next year too.
Wasn't last season predicted to be the breakthrough season for the non-goalscoring Silva, also no guarantee Neto regains his pre-injury form, hope you're right but have my doubts. As for MGW and Boly again more in hope than anything.
 

Black Country Wanderer

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View attachment 28383

This is the form table for the last 15 games of the season.

We need a giant window to turn ourselves around.
Although i agree it was an awful end to the season,if you take it back another 4 games ie second half of the season i think we finish about 12th

As far as another post on this thread about us losing £1 million a week in our promotion season,well it got us up didnt it?
Earning us about £150 million,had we not gone straight into Europe the next season we wouldnt have had any FFP problems for the next few seasons,victims of our own success

We have had Covid and FFP restrictions to cope with,so its understandable Fosun have been pragmatic the last 2 seasons,lets see where we go this summer before hanging them out to dry
If we fail to invest now then they deserve the criticism but its early days despite the hysteria today
 

ombyman

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Wasn't last season predicted to be the breakthrough season for the non-goalscoring Silva, also no guarantee Neto regains his pre-injury form, hope you're right but have my doubts. As for MGW and Boly again more in hope than anything.
I just read on another thread that Raul needs a new headband, ok yeah that's all it is
 

WickedWolfie

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You can't come on this thread and start using facts, it's not fair or reasonable.

You make some good points obviously... but as you say, these rules don't come into force for 3 years, and will only apply to teams that qualify for Europe.

The way we are going we may not be in the premier league by then, and have bugger all chance of finishing in the top 6.

Other facts you could have mentioned are that China has lost interest in football. Chinese companies no longer own football clubs and their league has collapsed. We were promised a new stadium, we haven't even got a decent temporary stand.

Also, the UK and China had a major falling out and chinese firms are being told to take their investment money back to China. Geopolitics trumps FFP rules.
I'm not about to argue but all of the 'new' things that you discuss have been stated repeatedly and repetitively. It would be unfortunate if a thread highlighting a potentially serious looking issue became same old same old.
 

YouGottaRaulWithIt

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I'm not about to argue but all of the 'new' things that you discuss have been stated repeatedly and repetitively. It would be unfortunate if a thread highlighting a potentially serious looking issue became same old same old.
The main thrust of an extremely well crafted post was Fosun are not spending due to new FFP rules, that we are being clever and playing the long game.

I respectfully disagree. I don't think that is the reason for the lack spend - for the reasons stated in my reply.

Sorry if it is boring you, or you want there to be more to it than there really is. I just don't buy it.
 

WickedWolfie

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The main thrust of an extremely well crafted post was Fosun are not spending due to new FFP rules, that we are being clever and playing the long game.

I respectfully disagree. I don't think that is the reason for the lack spend - for the reasons stated in my reply.

Sorry if it is boring you, or you want there to be more to it than there really is. I just don't buy it.
A polite and reasoned response, thank you.
 

Contrarian

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View attachment 28383

This is the form table for the last 15 games of the season.

We need a giant window to turn ourselves around.

Similar for Villa, Southampton, Everton and all 3 promoted clubs. Small consolation, but we aren't down yet! There's still 38 matches for us to turn it round.
Also, it's a bad run, but several/most of our players had clearly lost their edge in the run in as we were safe but going nowhere. The other clubs in that lower list were fighting for their survival - even Villa were desperate for points until 3 or 4 matches to go. We were bad, but I think that form table paints the picture worse than it is.
 

sedgwolf1980

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We have 3 midfielders and 2 centre halves at the club. That’s literally it.

We are so far off being able to justify the lack of investment it’s incredible.

No one is asking for us to do a Leeds, simply to sign a centre midfielder and a centre back. If we don’t, there is a good chance we will get relegated and that wage bill will be a damn site more than 70% revenue.
 

WickedWolfie

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You are welcome. He might be right. My wife says I am wrong about most things. At the end of the day I will still shout and scream for Wolves regardless of where we are and whi is playing for us. Definition of legacy fan.
Re your last sentence you and l both.... 130ish mile journey each way for a home game....
 

Thank you Sir Jack

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"Why aren’t we doing as many ‘bits’ as other clubs?"

"Why have Fosun turned the taps off?"

"Why do we have to sell to buy?"


"Our owners have no interest in our club anymore!"


Some things posted on there all the time, amongst many other criticisms of our lack of spending and overall strategy.

But why? What’s changed for Fosun?

I don’t think anything has changed with Fosun other than their plan. Like with any other business, an analysis of the market conditions will drive that plan.

Football is changing. The changes have already been introduced this month, with a 3 year run in period.

Part of the new UEFA FFP regulations limits spending on wages, transfers, and agent fees to 70% of club revenue.

Assessments will be performed on a timely basis and breaches will result in pre-defined financial penalties and sporting measures. The new regulations will come into force in June 2022 and will be phased in over a 3-year period.

All a bit wishy-washy at the moment, but it’s the 70% rule that’s the complete game-changer in my opinion. Here's why.

If the new rules were imposed this month in full, rather than with the 3-year phased implementation, us and 9 others currently in the Premier League would fail the test on wages alone. Spurs are currently the lowest on 57%, although I would imagine Conte is pushing for that to change!

We are just above the 70% on wages alone, with our wage bill 72% of our turnover.

Palace (93%), Southampton (90%), Everton (89%), Leicester (85%), Watford (80%) Newcastle (79%), Brighton (78%), Chelsea (77%), Burnley (75%), Villa (75%), Norwich (75%) and Arsenal (73%) all sat above us last season.

At the moment, these rules will only apply to clubs in European competitions, but anyone not in a relegation battle could potentially qualify for Europe if they have a good season, so clubs will need to pay close attention to them regardless, or risk being burned by 'pre-defined financial penalties and sporting measures' if they do qualify.

The Premier League rules have not been updated or published yet either, so whether they will be changed and how close they will look to the UEFA rules is unknown, but I would expect something will come out soon on this.


What does this mean for us?

Fast-forward 3 years from now when the rule is fully in place. We would fail any tests without spending another penny, as our wage bill is already 72% of our revenues. I would imagine with releasing the players we have since this was published, this would come down, so if a test was done tomorrow, we would probably be fine.

But assuming we push the wages to the maximum 70%, as most clubs will, any money for new transfers and new wages has to be generated by profits or player sales.

No real change for us!

Fosun can spend money if they want to, they have spent money in the past, so why the change in more recent strategy?

I think people are too quick to throw around accusations of lack of planning or lack of foresight from our owners, when if anything, they appear to be very shrewd operators, that look at how a market will change and develop before making strategic decisions.

If we get our house in order before everyone else, surely that puts us in a very strong position in the future?


What does it mean for others?

Villa are a good club to use as an example, as they are often held on a pedestal about how their owners throw money around like confetti. To me they are owners that are in it for vanity reasons and don’t really mind if their club makes a loss, as they will cover it as best they can. Nothing wrong with that currently, but obviously a different approach to Fosun and an approach that will need to be tweaked going forward.

UEFA’s break-even rule for sustainability (the one we were stung by) has also been changed (probably to accommodate PSG), so clubs can now lose €60m a season (approx. £51m). How clubs could use this to manipulate the 70% rule, I’m not sure (any suggestions welcome), as I don’t think any cash injection to cover losses, or any loans would positively impact revenues.

I suspect that even at a club where owners inject the maximum amount of capital allowed to cover losses, will still have to comply with the 70% rule.

So someone like Villa, who are currently at 75% wages to revenues, would need to shed 5% off their wage bill to comply.

Then any spending on new transfers and new wages has to be generated by profits or player sales. They don’t make a profit, as their owners inject capital to cover their losses, so player sales is their only avenue for raising funds.

Newly promoted clubs will have an advantage in the transfer market, as they will have a massively increased turnover and a relatively small wage bill, so more room for manoeuvre initially after promotion.

The big powerhouses of football, with turnovers 2 or 3 times that of most other clubs will have an advantage in terms of overall spending power, but I think that advantage will be narrowed by their excessive wage bills.

Take Man United as another example, the highest net spend in the last 10 years (£903m). Turnover of £500m+, with a wages to turnover ratio of 65%. They have 5% of their revenue to spend on fees and wages to take them to the 70% level. A grand total of £25m

If you assume transfer fee will be accounted for in a similar way to how they are now, by dividing the transfer fee over the term of the contract, they could spend £125m on players on 5 years contracts (5 x 25), assuming they free up some wages of players leaving or being out of contract.

But overall, their spending ability will probably be lower than it is currently. Could this be why Man City and Liverpool have both taken the decision to spend big on young strikers now before the new rules fully bite?


What’s the best strategy for now?

If I were running a football club, with these changes coming into force already and being phased in over the next 3 years, I would be looking to get my house in order as soon as possible.

Dos
  • Running in profit to increase the amount you have to spend and natural increases in your wage bill.
  • Operating a controlled, tiered wage structure.
  • Concentrating most of your resources on your first XI and buying younger players with high potential on long-term, relatively low pay contracts as backup. This keeps the average age and overall wage bill down and also future proofs you going forward (as you need to spend less on replacements).
  • Growing off-field revenues to improve revenues and profitability.
Do all these things remind you of a particular strategy?!

Don’ts
  • Spending over the odds for any player in terms of fee and wages (United)
  • Having a large squad of older, over-paid, average players, on long term contracts (Everton)
  • Paying transfer fees for older star players on high wages with no re-sale value, as by the time their contracts have finished, you will not have any available resources to replace them, assuming you are maxed out at the 70% for wages (Villa)
To use Villa as a specific example again, if Coutinho sees out his 4 years at Villa, then leaves for free, they will have £8.5m in wages freed up, but no cash to replace him.

They either hope that a youngster can develop enough in those 4 years to replace his level of contribution, sign another older player on a free transfer on similar wages, or they go into the following season with a hole they are unable to fill.

That’s an extreme example, but one that illustrates how important succession planning for your first team is becoming, as it will become more difficult to go out and just buy players to fill a gap, without planning for it!


What does the future hold?

I think a lot of clubs will push this right to the wire. They will continue ploughing forward with their broken business models until the very last minute and then panic when the regulations take full hold (especially if they qualify for Europe unexpectedly!).

3 years from now, I can see a summer window like never before. Record amounts of players being released from their contracts and players being allowed to leave for well below their market value, just so clubs can shift players off their books to comply.

Longer term, I think this is a positive move, as it is effectively a soft cap on wages and transfer fees, which are getting out of control.

It also makes the hoarding of large, highly paid squads of players less likely, with bigger clubs unwilling to pay bigger wages to those that aren’t playing. That could be a good thing for clubs like us, as players that could be a star player for us, won’t be sitting on the benches of bigger clubs. Potentially a good thing for the progression of youngsters too.

So transfer fees reducing, wages reducing, an increase in available higher-quality players, more evenly distributed amongst clubs.

That’s hopefully what we will see, as I can't see any negatives in those things.

The next few years for us will be about treading water and maintaining our Premier League status.

We already have our house in order, and we are already doing the right things for the future. If we make sure our house is in better order than most, we are in the best possible position to capitalise when the panic sets in.

Short-term however, that might mean a competitive disadvantage as we adopt a stricter model to the rest of the market. But this should change to a competitive advantage longer term.

In my opinion, we are playing a waiting game. Waiting for football to financially implode on itself and being one of the few clubs in a position to pick up some of the pieces.

That’s certainly not a mouth-watering prospect for the next few years, but one that fills me with some confidence for the future beyond that.

The real risk is that the conditions to tread water become impossible, the currents become too strong, the competitive disadvantage becomes too wide and we sink.

But if you look at the long-term, I really don’t see that there’s a viable alternative.


This brings together a few discussion from a few different threads, but also worth checking out @cannockwolves thread on sustainability (Sustainability)
Top post WolfLing. You apply a great deal of thought and research to your posts, which are very informative. Thank you.
 

wolvesaywe

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We have 3 midfielders and 2 centre halves at the club. That’s literally it.

We are so far off being able to justify the lack of investment it’s incredible.

No one is asking for us to do a Leeds, simply to sign a centre midfielder and a centre back. If we don’t, there is a good chance we will get relegated and that wage bill will be a damn site more than 70% revenue.
I make it 5 senior centre halves, so that's not literally it
 

TFWanderers

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I am incredibly concerned but I’ve been a Wolves fan 30 odd years, so that’s normal.

I just really hope the sell to buy policy does not mean we cannot sign anyone until Ruben goes.

If he doesn’t go until late July early August, we’ll be screwed.

It’ll be very similar to when Jarvis, Kightly and Fletcher went.
 

sedgwolf1980

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Either way, my point was we need reinforcements before we even begin to think about selling anyone. Otherwise we are in serious trouble.

The OP was an informative and well thought out post, however we need at least 3 more first team players before we can even start entertaining threads like this as justification, IMO.
 

Achilles Last Stand

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Are you not giving far too much credit to these rules?

So if a club has a wage bill of 75% instead of 70% what's going to happen? I would imagine not a lot. So, whilst I get your theory I don't think it will be much of an issue and I don't think football will implode as you predict. They'll just change things if all the clubs want it changed and if not, clubs will pay the small fines or whatever that comes their way.

I know what you're saying is right technically but I don't think it will happen.

Also, I think you're giving Fosun a bit too much credit initially. We lost £1m a week in the promotion season. Is that sensible and responsible?

They spunked millions and millions on loads of rubbish initially and we were effectively one-year away from being another Sheffield Wednesday or Birmingham City in that FFP would have had a stranglehold on us. Thankfully, we won promotion so that bridge was never crossed. That was bold. That was a massive risk and thankfully it's one that paid off.

Let's not pretend otherwise, we were effectively the Man City of the Championship then.

Buying players that were out of our league, paying wages that we couldn't afford all on the gamble that we would go up.

So, I think a LOT has changed with Fosun's strategy. They're now not willing to put any money in and it goes totally against what they were about, it also goes against their insistence they look for value.

Good post with the details on the impact this could have but I think you're looking far too much into it, it's much simpler IMO - they've stopped putting money in for whatever reason and there is no long-term strategy or approach.
Good points here, but related to the gigantic losses(=50m) we made during our promotion season, I remember that 60% of that (=30m) was paid as promotion bonuses to the players.
If we had remained in the Chump, our losses would had been approx 20m.
 

Darvo

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Very interesting OP and thread.

At the risk of going off at a slight tangent, I’d question the motive behind all of the FFP schemes.

If anything, it actually sustains unfair play.

I think it’s a means of perpetuating the closed shop of the elite clubs. I’m also surprised that it hasn’t been seriously challenged in the courts.

In what other business sectors are entrepreneurs denied the opportunity of investing in their businesses?
 

WeAreTheWolvesII

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Very interesting OP and thread.

At the risk of going off at a slight tangent, I’d question the motive behind all of the FFP schemes.

If anything, it actually sustains unfair play.

I think it’s a means of perpetuating the closed shop of the elite clubs. I’m also surprised that it hasn’t been seriously challenged in the courts.

In what other business sectors are entrepreneurs denied the opportunity of investing in their businesses?
It's a huge benefit to a club like us now, so whilst I understand your point, we need it to remain.
 
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