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Sustainability

cannockwolves

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I was thinking the other day that we hear a lot about sustainability from Jeff, but we haven’t actually (as far as I am aware) discussed it as a separate topic on here.

Just what is sustainability?

We know that at its basic level it is only using the money you can generate from operations (perhaps supported by some debt or equity?). But it also has to be defined in the terms of the club’s ambition. Is that ambition to survive in the Prem, or do they want sustainability but at a much higher level?

My own view is they want a higher level of ambition in terms of league position and European football, but they are quite prepared to play the very long game to get it – and won’t be going to Fosun to bankroll any major investment. As Jeff has said, “time is our friend” – I don’t think they will be that stressed if we bob around in mid table as long as they can see development in the brand, commercial revenues, and the conveyor belt of talent via the academy. I honestly think as long as those metrics are improving they will be happy enough – obviously those metrics would be helped with a successful 1st team but they are not going to threaten long term financial security to achieve short term success.

I am fine with that, but many will not.

It would be interesting to exactly understand why Fosun appear to have pulled the ongoing investment (although they do sponsor the training ground, and may well do more than we realise).

But adding say £25m a season on top of retained profits and player trading would be peanuts in the scheme of things for Fosun, I do wonder if there are geo-politics at play limiting their ability to invest.

As it stands at the moment we make about £20m profit a year, the biggest driver of that is league position and European football. Gate receipts of £12m can’t be pushed much higher that quickly, but commercial revenue and sponsorship could be much higher. Looking at our accounts we would make about £25m in a normal non-covid year, compared to Leicester City who made £39m from commercial and sponsorship.

It is also worth pointing out that Leicester also took more gate receipts by about £1m – I have not calculated the per fan average cost, but maybe Vinny is right that on average Leicester fans as a group pay more? That is for another thread!

We have seen that Everton, Leeds, and even Villa haven’t achieved success while throwing big money at it. But I was surprised to see just how dire Brighton’s finances are. They lost £53m and their sugar daddy is ‘owed’ £450m. They have posted losses of over £270 million in their four completed seasons as a top flight club. That puts them into the top 10 loss making clubs in Premier League history – ok as long as their sugar daddy doesn’t call in the loan or cut off the taps.

Leicester have made some big investments into their training ground, are looking to expand their ground and invest in their squad, but their owners are in it for the joy – but they are owed £217m according to the latest account and lost £31m (after losing £61m the year before) – which just goes to show two of our direct competitors for the top six are rich men’s play things – and now Newcastle are a rich counties play thing.

Back to sustainability.

Driving up turnover and profit is critical. FFP and wages are linked to our income. Compared to Leicester we are £14m down in commercial & sponsorship, If they could just get parity with them – with our existing profit of £20m you could see a profit of say £40m a year. A cup run, higher league position, or European football could easily push that profit to £50m a year – if Jeff continues to run a tight ship.

Now, at £40m or £50m a year operating profit you are really starting to be sustainable at a reasonable level. The problem is not about having enough money, it’s about spending it well. That is where Mendes comes in I guess. But the point is that starts to give you the ability to add a good Premier league quality player every year, and with an improving academy maybe we will have a MGW level talent come through every three or four years – it will be interesting to see where Cundle, Hodge, Roberts, Bueno, and Frasier are in three or four years. All you need is one or two of them to come through and the club really could be in a very good position

Personally, I like the concept of sustainability. I lived through the pain of the 80’s and listening to the radio at dinner time to see if my club still existed. I know we should have more ambition than ‘just surviving’ but I do think Fosun’s long term plans can actually work – it won’t be quick, it may be bumpy, but I do actually think it’s the right approach.
 

VancouverWolf

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Great post.
As fans we’d love to see Fosun give us another ‘loan’ and we could maybe be even better but it’s their money and they don’t want to.

So, the next best thing is live within our means and seek out new young players who are less expensive. It’s a wise business approach.

Patience and acceptance makes it a easier for me not to get dragged down into a lot of negativity.
 

Mile End Wanderer

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Sustainability in anything until the end of time is not possible however for a Wolves point of view it’s sustaining where we currently are, small steps to progress….

So in real terms being PL club is what we want to keep and that only comes by making improvements on the pitch

As for the self sufficient model. Have we let this to be too publicly known?? Potentially, however if our product of players is good enough to move on for big money then of course that puts us on a good footing to reshape the team. Now and in the future which is the idea.

So when we sell Neves this summer, possibly next season it could be Kilman, RAN or Neto again if it helps us move forward that is sustainability.

You will get seasons where we finish 17th or 10th for me we have to accept this is where we are. Probably should prioritise going for the league / fa cup!!

“Better never stops” - Let’s show that
 

Hot Fuss

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I was thinking the other day that we hear a lot about sustainability from Jeff, but we haven’t actually (as far as I am aware) discussed it as a separate topic on here.

Just what is sustainability?

We know that at its basic level it is only using the money you can generate from operations (perhaps supported by some debt or equity?). But it also has to be defined in the terms of the club’s ambition. Is that ambition to survive in the Prem, or do they want sustainability but at a much higher level?

My own view is they want a higher level of ambition in terms of league position and European football, but they are quite prepared to play the very long game to get it – and won’t be going to Fosun to bankroll any major investment. As Jeff has said, “time is our friend” – I don’t think they will be that stressed if we bob around in mid table as long as they can see development in the brand, commercial revenues, and the conveyor belt of talent via the academy. I honestly think as long as those metrics are improving they will be happy enough – obviously those metrics would be helped with a successful 1st team but they are not going to threaten long term financial security to achieve short term success.

I am fine with that, but many will not.

It would be interesting to exactly understand why Fosun appear to have pulled the ongoing investment (although they do sponsor the training ground, and may well do more than we realise).

But adding say £25m a season on top of retained profits and player trading would be peanuts in the scheme of things for Fosun, I do wonder if there are geo-politics at play limiting their ability to invest.

As it stands at the moment we make about £20m profit a year, the biggest driver of that is league position and European football. Gate receipts of £12m can’t be pushed much higher that quickly, but commercial revenue and sponsorship could be much higher. Looking at our accounts we would make about £25m in a normal non-covid year, compared to Leicester City who made £39m from commercial and sponsorship.

It is also worth pointing out that Leicester also took more gate receipts by about £1m – I have not calculated the per fan average cost, but maybe Vinny is right that on average Leicester fans as a group pay more? That is for another thread!

We have seen that Everton, Leeds, and even Villa haven’t achieved success while throwing big money at it. But I was surprised to see just how dire Brighton’s finances are. They lost £53m and their sugar daddy is ‘owed’ £450m. They have posted losses of over £270 million in their four completed seasons as a top flight club. That puts them into the top 10 loss making clubs in Premier League history – ok as long as their sugar daddy doesn’t call in the loan or cut off the taps.

Leicester have made some big investments into their training ground, are looking to expand their ground and invest in their squad, but their owners are in it for the joy – but they are owed £217m according to the latest account and lost £31m (after losing £61m the year before) – which just goes to show two of our direct competitors for the top six are rich men’s play things – and now Newcastle are a rich counties play thing.

Back to sustainability.

Driving up turnover and profit is critical. FFP and wages are linked to our income. Compared to Leicester we are £14m down in commercial & sponsorship, If they could just get parity with them – with our existing profit of £20m you could see a profit of say £40m a year. A cup run, higher league position, or European football could easily push that profit to £50m a year – if Jeff continues to run a tight ship.

Now, at £40m or £50m a year operating profit you are really starting to be sustainable at a reasonable level. The problem is not about having enough money, it’s about spending it well. That is where Mendes comes in I guess. But the point is that starts to give you the ability to add a good Premier league quality player every year, and with an improving academy maybe we will have a MGW level talent come through every three or four years – it will be interesting to see where Cundle, Hodge, Roberts, Bueno, and Frasier are in three or four years. All you need is one or two of them to come through and the club really could be in a very good position

Personally, I like the concept of sustainability. I lived through the pain of the 80’s and listening to the radio at dinner time to see if my club still existed. I know we should have more ambition than ‘just surviving’ but I do think Fosun’s long term plans can actually work – it won’t be quick, it may be bumpy, but I do actually think it’s the right approach.
Do the figures about Leicester making slightly more than us in gate receipts relate to last season?
 
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Fenrir_

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Do the figures about Leicester making slightly more than us in gate receipts relate to last season?
Screenshot_20220610-082708_OneDrive.jpg
Screenshot_20220610-083000_OneDrive.jpg


Yes, Leicester take more in gate receipts than us according to the most recent reports
 

Eastyorksyeltz

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I was thinking the other day that we hear a lot about sustainability from Jeff, but we haven’t actually (as far as I am aware) discussed it as a separate topic on here.

Just what is sustainability?

We know that at its basic level it is only using the money you can generate from operations (perhaps supported by some debt or equity?). But it also has to be defined in the terms of the club’s ambition. Is that ambition to survive in the Prem, or do they want sustainability but at a much higher level?

My own view is they want a higher level of ambition in terms of league position and European football, but they are quite prepared to play the very long game to get it – and won’t be going to Fosun to bankroll any major investment. As Jeff has said, “time is our friend” – I don’t think they will be that stressed if we bob around in mid table as long as they can see development in the brand, commercial revenues, and the conveyor belt of talent via the academy. I honestly think as long as those metrics are improving they will be happy enough – obviously those metrics would be helped with a successful 1st team but they are not going to threaten long term financial security to achieve short term success.

I am fine with that, but many will not.

It would be interesting to exactly understand why Fosun appear to have pulled the ongoing investment (although they do sponsor the training ground, and may well do more than we realise).

But adding say £25m a season on top of retained profits and player trading would be peanuts in the scheme of things for Fosun, I do wonder if there are geo-politics at play limiting their ability to invest.

As it stands at the moment we make about £20m profit a year, the biggest driver of that is league position and European football. Gate receipts of £12m can’t be pushed much higher that quickly, but commercial revenue and sponsorship could be much higher. Looking at our accounts we would make about £25m in a normal non-covid year, compared to Leicester City who made £39m from commercial and sponsorship.

It is also worth pointing out that Leicester also took more gate receipts by about £1m – I have not calculated the per fan average cost, but maybe Vinny is right that on average Leicester fans as a group pay more? That is for another thread!

We have seen that Everton, Leeds, and even Villa haven’t achieved success while throwing big money at it. But I was surprised to see just how dire Brighton’s finances are. They lost £53m and their sugar daddy is ‘owed’ £450m. They have posted losses of over £270 million in their four completed seasons as a top flight club. That puts them into the top 10 loss making clubs in Premier League history – ok as long as their sugar daddy doesn’t call in the loan or cut off the taps.

Leicester have made some big investments into their training ground, are looking to expand their ground and invest in their squad, but their owners are in it for the joy – but they are owed £217m according to the latest account and lost £31m (after losing £61m the year before) – which just goes to show two of our direct competitors for the top six are rich men’s play things – and now Newcastle are a rich counties play thing.

Back to sustainability.

Driving up turnover and profit is critical. FFP and wages are linked to our income. Compared to Leicester we are £14m down in commercial & sponsorship, If they could just get parity with them – with our existing profit of £20m you could see a profit of say £40m a year. A cup run, higher league position, or European football could easily push that profit to £50m a year – if Jeff continues to run a tight ship.

Now, at £40m or £50m a year operating profit you are really starting to be sustainable at a reasonable level. The problem is not about having enough money, it’s about spending it well. That is where Mendes comes in I guess. But the point is that starts to give you the ability to add a good Premier league quality player every year, and with an improving academy maybe we will have a MGW level talent come through every three or four years – it will be interesting to see where Cundle, Hodge, Roberts, Bueno, and Frasier are in three or four years. All you need is one or two of them to come through and the club really could be in a very good position

Personally, I like the concept of sustainability. I lived through the pain of the 80’s and listening to the radio at dinner time to see if my club still existed. I know we should have more ambition than ‘just surviving’ but I do think Fosun’s long term plans can actually work – it won’t be quick, it may be bumpy, but I do actually think it’s the right approach.
Really good post. You are right, it would be interesting to have a club view on these issues. I can see why they might be reluctant to, but it would leave them less of a hostage to fortune than some of the more general statements around the area seem to have done already. There will always be those who just want someone to say they will buy us European football whatever the cost, but I think the majority would accept an honest and more detailed explanation of what sustainability looks like in the short and medium term. What the realistic aims really are.
 

Hot Fuss

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View attachment 28303
View attachment 28304


Yes, Leicester take more in gate receipts than us according to the most recent reports

As well as having a slightly bigger ground Leicester had 9 cup home games (1x league cup, 1x Fa cup, 7x Europe).

We had 3 (1x league cup, 2x fa cup)

I’d imagine this is why they made a bit more than us. Personally think it’s more Vinny BS that our prices are in line with there’s.
 

Sussex Wolf

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Excellent OP.

I and I think most long time Wolves fans would support the broad concept of sustainable PL finances if, as you say, Wolves can be smart with how the small but growing surplus is invested. This was the issue with the summer we bought Silva, when it felt like we had blown our pot on a talent who is likely a couple of years from making a difference to the senior squad when we had more pressing weaknesses elsewhere.

Europe can make a real difference, both for fans and for finances, as our run in the Europa League showed. What we need to do is achieve that without chasing it with panic buying. If we get it right with the coach and incremental squad additions, then we could reach the point where we can routinely qualify for at least one of the European competitions. Sort of where Leicester have been since their PL title, and we’ve been pretty close since we got promoted. Making the next step, to a big six type club, is really a long term project - 10+ years in the upper half of the PL / Europe.
 

Black Country Wanderer

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As well as having a slightly bigger ground Leicester had 9 cup home games (1x league cup, 1x Fa cup, 7x Europe).

We had 3 (1x league cup, 2x fa cup)

I’d imagine this is why they made a bit more than us. Personally think it’s more Vinny BS that our prices are in line with there’s.
If you look at the pricing league tables they are just below us on average,very little between us tbf,they have some higher and some lower STs, so roughly in line on average is not BS its fact in this case
 
D

Deleted member drgr12429

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I was thinking the other day that we hear a lot about sustainability from Jeff, but we haven’t actually (as far as I am aware) discussed it as a separate topic on here.

Just what is sustainability?

We know that at its basic level it is only using the money you can generate from operations (perhaps supported by some debt or equity?). But it also has to be defined in the terms of the club’s ambition. Is that ambition to survive in the Prem, or do they want sustainability but at a much higher level?

My own view is they want a higher level of ambition in terms of league position and European football, but they are quite prepared to play the very long game to get it – and won’t be going to Fosun to bankroll any major investment. As Jeff has said, “time is our friend” – I don’t think they will be that stressed if we bob around in mid table as long as they can see development in the brand, commercial revenues, and the conveyor belt of talent via the academy. I honestly think as long as those metrics are improving they will be happy enough – obviously those metrics would be helped with a successful 1st team but they are not going to threaten long term financial security to achieve short term success.

I am fine with that, but many will not.

It would be interesting to exactly understand why Fosun appear to have pulled the ongoing investment (although they do sponsor the training ground, and may well do more than we realise).

But adding say £25m a season on top of retained profits and player trading would be peanuts in the scheme of things for Fosun, I do wonder if there are geo-politics at play limiting their ability to invest.

As it stands at the moment we make about £20m profit a year, the biggest driver of that is league position and European football. Gate receipts of £12m can’t be pushed much higher that quickly, but commercial revenue and sponsorship could be much higher. Looking at our accounts we would make about £25m in a normal non-covid year, compared to Leicester City who made £39m from commercial and sponsorship.

It is also worth pointing out that Leicester also took more gate receipts by about £1m – I have not calculated the per fan average cost, but maybe Vinny is right that on average Leicester fans as a group pay more? That is for another thread!

We have seen that Everton, Leeds, and even Villa haven’t achieved success while throwing big money at it. But I was surprised to see just how dire Brighton’s finances are. They lost £53m and their sugar daddy is ‘owed’ £450m. They have posted losses of over £270 million in their four completed seasons as a top flight club. That puts them into the top 10 loss making clubs in Premier League history – ok as long as their sugar daddy doesn’t call in the loan or cut off the taps.

Leicester have made some big investments into their training ground, are looking to expand their ground and invest in their squad, but their owners are in it for the joy – but they are owed £217m according to the latest account and lost £31m (after losing £61m the year before) – which just goes to show two of our direct competitors for the top six are rich men’s play things – and now Newcastle are a rich counties play thing.

Back to sustainability.

Driving up turnover and profit is critical. FFP and wages are linked to our income. Compared to Leicester we are £14m down in commercial & sponsorship, If they could just get parity with them – with our existing profit of £20m you could see a profit of say £40m a year. A cup run, higher league position, or European football could easily push that profit to £50m a year – if Jeff continues to run a tight ship.

Now, at £40m or £50m a year operating profit you are really starting to be sustainable at a reasonable level. The problem is not about having enough money, it’s about spending it well. That is where Mendes comes in I guess. But the point is that starts to give you the ability to add a good Premier league quality player every year, and with an improving academy maybe we will have a MGW level talent come through every three or four years – it will be interesting to see where Cundle, Hodge, Roberts, Bueno, and Frasier are in three or four years. All you need is one or two of them to come through and the club really could be in a very good position

Personally, I like the concept of sustainability. I lived through the pain of the 80’s and listening to the radio at dinner time to see if my club still existed. I know we should have more ambition than ‘just surviving’ but I do think Fosun’s long term plans can actually work – it won’t be quick, it may be bumpy, but I do actually think it’s the right approach.
Spot on post. Exactly right about Fosun's approach to it all. There is a twist in it as to add we are not just an investment, we are actually a favourite part of the business because the chairman of Fosun is attached to us in more than just an investment sense. So doubly Fosun want us to grow AND do well.
As football fans we all want it NOW! But we just have to be patient, although i know some find that incredibly hard on SM these days.
We are in good hands with Fosun imo.
 

smith

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Very important topic especially now that wolves fans want the shareholder to splash the cash in a transfer window.

Of course the term is used in many contexts (climate change, agriculture , business etc) and will have different levels.
In economics the famed American economist WW Rostow coined the phrase “takeoff into self sustained growth” which suggested an economy can continue to prosper once it had reached a certain level of infrastructure and GDP.(google his name and find interesting discussion about the key stages of growth)
In football we will all have our own definitions which will vary from person to prison and club to club based on individual perception.
For Liverpool and Manchester City it will be different to Leicester City.
And for Wolves and it’s owners it must be something like no slipping back or jeopardizing continue improvement.
As someone has mentioned this is more than an Investment …The chairman of Fosun is actually engaged as a fan and May value on field progress as far more important than return on his capital.

Good thread.
 

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The new UEFA FFP 'squad cost control' rules makes sustainability even more crucial and makes our operating model look very wise!

The regulation limits spending on wages, transfers, and agent fees to 70% of club revenue. The new regulations will come into force this month, but there will be gradual implementation over three years to allow clubs the necessary time to adapt.

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.

Working to the 70% going forward, to comply we have to trim our wage bill slightly and any transfer funds have to be generated by sales.

The Villa, Everton and Newcastle models just don't work on this basis. They won't be able to 'overpay' on transfer fees and wages unless they can grow their revenues significantly, which now can't be done in the same way (or as fast) as clubs like Chelsea and Man City did it.

When you look at it, all the stuff the club says makes sense.

A younger squad profile (reduces the overall wage bill)
A controlled wage structure (to stick within the prescribed limits)
Selling to buy (keeps your transfer fee spend within the 70%)
Growing off-field revenues (increases the monetary amount of that 70%)

It's almost as if Fosun know what they're doing when it comes to running a business within prescribed guidelines!

Sustainability is now the only way forward.
 

WolfLing

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And to follow on from that, Everton have just announced they are releasing Tosun, Delph and Sigurdsson who cost £75.5m between them.
 

cannockwolves

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The new UEFA FFP 'squad cost control' rules makes sustainability even more crucial and makes our operating model look very wise!

The regulation limits spending on wages, transfers, and agent fees to 70% of club revenue. The new regulations will come into force this month, but there will be gradual implementation over three years to allow clubs the necessary time to adapt.

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.

Working to the 70% going forward, to comply we have to trim our wage bill slightly and any transfer funds have to be generated by sales.

The Villa, Everton and Newcastle models just don't work on this basis. They won't be able to 'overpay' on transfer fees and wages unless they can grow their revenues significantly, which now can't be done in the same way (or as fast) as clubs like Chelsea and Man City did it.

When you look at it, all the stuff the club says makes sense.

A younger squad profile (reduces the overall wage bill)
A controlled wage structure (to stick within the prescribed limits)
Selling to buy (keeps your transfer fee spend within the 70%)
Growing off-field revenues (increases the monetary amount of that 70%)

It's almost as if Fosun know what they're doing when it comes to running a business within prescribed guidelines!

Sustainability is now the only way forward.

Great post mate. It adds some real facts to what 'feel' is the right way forward.

Personally, I don't know much about e-sports or gaming in general - but this report suggest the market size will be $218bn by 2024. Someone somewhere is going to make a lot - and I mean a Lot of money!

What % of that vast market could transform Wolves as a football club?

In my OP I pointed out how I believe a annual net profit of say £50m could be achieved in the medium term just by matching Leicester's level of sponsorship and commercial revenue.

What could we do if in five year time our sponsorship & commercial income is double or triple that of Leicester?

What if in a decade our investment in e-sports was pulling in £100m a year on the bottom line? Fosun have that long term plan, they have a really good start, we are partnering with the right sort of partners, and one only assume they have the right people here and in China working on this project - I think its odds on they are going to improve their current position - the question is will that provide a few million and be useful - or is it going to be a few tens of millions, or hundreds of millions - then it becomes truly transformative.

Like I said, someone somewhere is going to make some serious wedge, with a market at $200bn someone is already making some serious money now.
 

WolfLing

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Great post mate. It adds some real facts to what 'feel' is the right way forward.

Personally, I don't know much about e-sports or gaming in general - but this report suggest the market size will be $218bn by 2024. Someone somewhere is going to make a lot - and I mean a Lot of money!

What % of that vast market could transform Wolves as a football club?

In my OP I pointed out how I believe a annual net profit of say £50m could be achieved in the medium term just by matching Leicester's level of sponsorship and commercial revenue.

What could we do if in five year time our sponsorship & commercial income is double or triple that of Leicester?

What if in a decade our investment in e-sports was pulling in £100m a year on the bottom line? Fosun have that long term plan, they have a really good start, we are partnering with the right sort of partners, and one only assume they have the right people here and in China working on this project - I think its odds on they are going to improve their current position - the question is will that provide a few million and be useful - or is it going to be a few tens of millions, or hundreds of millions - then it becomes truly transformative.

Like I said, someone somewhere is going to make some serious wedge, with a market at $200bn someone is already making some serious money now.

Yeah. We certainly are a relatively early adopter to the rapidly expanding market of eSports. How we monetise that exposure, I'm not sure, but it appears to be down the merchandise and licensing routes.

Of all the FFP rules that have come and gone, this 70% one is probably the biggest. It's effectively a soft wage and transfer fee cap and even clubs like Man United are going to have to seriously consider how they've been operating.

If it works, it could be a very good thing for the game in reducing transfer fees, keeping wages in check and stopping players being hoarded by bigger clubs.
 

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Salary caps is the US model and it is what has badly hobbled Barcelona. While they are still squirming ways around it eventually this will have real teeth and Fosuns approach seems well planned.
 

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As well as having a slightly bigger ground Leicester had 9 cup home games (1x league cup, 1x Fa cup, 7x Europe).

We had 3 (1x league cup, 2x fa cup)

I’d imagine this is why they made a bit more than us. Personally think it’s more Vinny BS that our prices are in line with there’s.
Except when Leicester had those games - there were no crowds

The figures of 12.7m for us and 13.0m for Leicester are from the 19/20 season when we were in Europe and Leicester weren't, so it was us who had more home games. Nothing more recent has been published
 

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I was thinking the other day that we hear a lot about sustainability from Jeff, but we haven’t actually (as far as I am aware) discussed it as a separate topic on here.

Just what is sustainability?

We know that at its basic level it is only using the money you can generate from operations (perhaps supported by some debt or equity?). But it also has to be defined in the terms of the club’s ambition. Is that ambition to survive in the Prem, or do they want sustainability but at a much higher level?

My own view is they want a higher level of ambition in terms of league position and European football, but they are quite prepared to play the very long game to get it – and won’t be going to Fosun to bankroll any major investment. As Jeff has said, “time is our friend” – I don’t think they will be that stressed if we bob around in mid table as long as they can see development in the brand, commercial revenues, and the conveyor belt of talent via the academy. I honestly think as long as those metrics are improving they will be happy enough – obviously those metrics would be helped with a successful 1st team but they are not going to threaten long term financial security to achieve short term success.

I am fine with that, but many will not.

It would be interesting to exactly understand why Fosun appear to have pulled the ongoing investment (although they do sponsor the training ground, and may well do more than we realise).

But adding say £25m a season on top of retained profits and player trading would be peanuts in the scheme of things for Fosun, I do wonder if there are geo-politics at play limiting their ability to invest.

As it stands at the moment we make about £20m profit a year, the biggest driver of that is league position and European football. Gate receipts of £12m can’t be pushed much higher that quickly, but commercial revenue and sponsorship could be much higher. Looking at our accounts we would make about £25m in a normal non-covid year, compared to Leicester City who made £39m from commercial and sponsorship.

It is also worth pointing out that Leicester also took more gate receipts by about £1m – I have not calculated the per fan average cost, but maybe Vinny is right that on average Leicester fans as a group pay more? That is for another thread!

We have seen that Everton, Leeds, and even Villa haven’t achieved success while throwing big money at it. But I was surprised to see just how dire Brighton’s finances are. They lost £53m and their sugar daddy is ‘owed’ £450m. They have posted losses of over £270 million in their four completed seasons as a top flight club. That puts them into the top 10 loss making clubs in Premier League history – ok as long as their sugar daddy doesn’t call in the loan or cut off the taps.

Leicester have made some big investments into their training ground, are looking to expand their ground and invest in their squad, but their owners are in it for the joy – but they are owed £217m according to the latest account and lost £31m (after losing £61m the year before) – which just goes to show two of our direct competitors for the top six are rich men’s play things – and now Newcastle are a rich counties play thing.

Back to sustainability.

Driving up turnover and profit is critical. FFP and wages are linked to our income. Compared to Leicester we are £14m down in commercial & sponsorship, If they could just get parity with them – with our existing profit of £20m you could see a profit of say £40m a year. A cup run, higher league position, or European football could easily push that profit to £50m a year – if Jeff continues to run a tight ship.

Now, at £40m or £50m a year operating profit you are really starting to be sustainable at a reasonable level. The problem is not about having enough money, it’s about spending it well. That is where Mendes comes in I guess. But the point is that starts to give you the ability to add a good Premier league quality player every year, and with an improving academy maybe we will have a MGW level talent come through every three or four years – it will be interesting to see where Cundle, Hodge, Roberts, Bueno, and Frasier are in three or four years. All you need is one or two of them to come through and the club really could be in a very good position

Personally, I like the concept of sustainability. I lived through the pain of the 80’s and listening to the radio at dinner time to see if my club still existed. I know we should have more ambition than ‘just surviving’ but I do think Fosun’s long term plans can actually work – it won’t be quick, it may be bumpy, but I do actually think it’s the right approach.
Well said, very positive view of our way forward that I agree with. One thing, you misspelt the highlighted word, you need to remove the o, i, e.
 

cannockwolves

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Well said, very positive view of our way forward that I agree with. One thing, you misspelt the highlighted word, you need to remove the o, i, e.

I have literally just stopped ****ing my self - it took me a minute or two to get the joke.

Thank you, best laugh I have had in ages :)
 

Hot Fuss

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Except when Leicester had those games - there were no crowds

The figures of 12.7m for us and 13.0m for Leicester are from the 19/20 season when we were in Europe and Leicester weren't, so it was us who had more home games. Nothing more recent has been published
I asked if the figures were for last season and was told yes so apologies.

Would still say the image I posted of Leicesters ST prices shows they are paying a fair chunk less than us.
 

Wisdomwolf

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I was thinking the other day that we hear a lot about sustainability from Jeff, but we haven’t actually (as far as I am aware) discussed it as a separate topic on here.

Just what is sustainability?

We know that at its basic level it is only using the money you can generate from operations (perhaps supported by some debt or equity?). But it also has to be defined in the terms of the club’s ambition. Is that ambition to survive in the Prem, or do they want sustainability but at a much higher level?

My own view is they want a higher level of ambition in terms of league position and European football, but they are quite prepared to play the very long game to get it – and won’t be going to Fosun to bankroll any major investment. As Jeff has said, “time is our friend” – I don’t think they will be that stressed if we bob around in mid table as long as they can see development in the brand, commercial revenues, and the conveyor belt of talent via the academy. I honestly think as long as those metrics are improving they will be happy enough – obviously those metrics would be helped with a successful 1st team but they are not going to threaten long term financial security to achieve short term success.

I am fine with that, but many will not.

It would be interesting to exactly understand why Fosun appear to have pulled the ongoing investment (although they do sponsor the training ground, and may well do more than we realise).

But adding say £25m a season on top of retained profits and player trading would be peanuts in the scheme of things for Fosun, I do wonder if there are geo-politics at play limiting their ability to invest.

As it stands at the moment we make about £20m profit a year, the biggest driver of that is league position and European football. Gate receipts of £12m can’t be pushed much higher that quickly, but commercial revenue and sponsorship could be much higher. Looking at our accounts we would make about £25m in a normal non-covid year, compared to Leicester City who made £39m from commercial and sponsorship.

It is also worth pointing out that Leicester also took more gate receipts by about £1m – I have not calculated the per fan average cost, but maybe Vinny is right that on average Leicester fans as a group pay more? That is for another thread!

We have seen that Everton, Leeds, and even Villa haven’t achieved success while throwing big money at it. But I was surprised to see just how dire Brighton’s finances are. They lost £53m and their sugar daddy is ‘owed’ £450m. They have posted losses of over £270 million in their four completed seasons as a top flight club. That puts them into the top 10 loss making clubs in Premier League history – ok as long as their sugar daddy doesn’t call in the loan or cut off the taps.

Leicester have made some big investments into their training ground, are looking to expand their ground and invest in their squad, but their owners are in it for the joy – but they are owed £217m according to the latest account and lost £31m (after losing £61m the year before) – which just goes to show two of our direct competitors for the top six are rich men’s play things – and now Newcastle are a rich counties play thing.

Back to sustainability.

Driving up turnover and profit is critical. FFP and wages are linked to our income. Compared to Leicester we are £14m down in commercial & sponsorship, If they could just get parity with them – with our existing profit of £20m you could see a profit of say £40m a year. A cup run, higher league position, or European football could easily push that profit to £50m a year – if Jeff continues to run a tight ship.

Now, at £40m or £50m a year operating profit you are really starting to be sustainable at a reasonable level. The problem is not about having enough money, it’s about spending it well. That is where Mendes comes in I guess. But the point is that starts to give you the ability to add a good Premier league quality player every year, and with an improving academy maybe we will have a MGW level talent come through every three or four years – it will be interesting to see where Cundle, Hodge, Roberts, Bueno, and Frasier are in three or four years. All you need is one or two of them to come through and the club really could be in a very good position

Personally, I like the concept of sustainability. I lived through the pain of the 80’s and listening to the radio at dinner time to see if my club still existed. I know we should have more ambition than ‘just surviving’ but I do think Fosun’s long term plans can actually work – it won’t be quick, it may be bumpy, but I do actually think it’s the right approach.
Ahava is a wholly owned Fosun subsidiary and has become another way in which they are directly investing in the club this year.
 

Flea

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I was thinking the other day that we hear a lot about sustainability from Jeff, but we haven’t actually (as far as I am aware) discussed it as a separate topic on here.

Just what is sustainability?

We know that at its basic level it is only using the money you can generate from operations (perhaps supported by some debt or equity?). But it also has to be defined in the terms of the club’s ambition. Is that ambition to survive in the Prem, or do they want sustainability but at a much higher level?

My own view is they want a higher level of ambition in terms of league position and European football, but they are quite prepared to play the very long game to get it – and won’t be going to Fosun to bankroll any major investment. As Jeff has said, “time is our friend” – I don’t think they will be that stressed if we bob around in mid table as long as they can see development in the brand, commercial revenues, and the conveyor belt of talent via the academy. I honestly think as long as those metrics are improving they will be happy enough – obviously those metrics would be helped with a successful 1st team but they are not going to threaten long term financial security to achieve short term success.

I am fine with that, but many will not.

It would be interesting to exactly understand why Fosun appear to have pulled the ongoing investment (although they do sponsor the training ground, and may well do more than we realise).

But adding say £25m a season on top of retained profits and player trading would be peanuts in the scheme of things for Fosun, I do wonder if there are geo-politics at play limiting their ability to invest.

As it stands at the moment we make about £20m profit a year, the biggest driver of that is league position and European football. Gate receipts of £12m can’t be pushed much higher that quickly, but commercial revenue and sponsorship could be much higher. Looking at our accounts we would make about £25m in a normal non-covid year, compared to Leicester City who made £39m from commercial and sponsorship.

It is also worth pointing out that Leicester also took more gate receipts by about £1m – I have not calculated the per fan average cost, but maybe Vinny is right that on average Leicester fans as a group pay more? That is for another thread!

We have seen that Everton, Leeds, and even Villa haven’t achieved success while throwing big money at it. But I was surprised to see just how dire Brighton’s finances are. They lost £53m and their sugar daddy is ‘owed’ £450m. They have posted losses of over £270 million in their four completed seasons as a top flight club. That puts them into the top 10 loss making clubs in Premier League history – ok as long as their sugar daddy doesn’t call in the loan or cut off the taps.

Leicester have made some big investments into their training ground, are looking to expand their ground and invest in their squad, but their owners are in it for the joy – but they are owed £217m according to the latest account and lost £31m (after losing £61m the year before) – which just goes to show two of our direct competitors for the top six are rich men’s play things – and now Newcastle are a rich counties play thing.

Back to sustainability.

Driving up turnover and profit is critical. FFP and wages are linked to our income. Compared to Leicester we are £14m down in commercial & sponsorship, If they could just get parity with them – with our existing profit of £20m you could see a profit of say £40m a year. A cup run, higher league position, or European football could easily push that profit to £50m a year – if Jeff continues to run a tight ship.

Now, at £40m or £50m a year operating profit you are really starting to be sustainable at a reasonable level. The problem is not about having enough money, it’s about spending it well. That is where Mendes comes in I guess. But the point is that starts to give you the ability to add a good Premier league quality player every year, and with an improving academy maybe we will have a MGW level talent come through every three or four years – it will be interesting to see where Cundle, Hodge, Roberts, Bueno, and Frasier are in three or four years. All you need is one or two of them to come through and the club really could be in a very good position

Personally, I like the concept of sustainability. I lived through the pain of the 80’s and listening to the radio at dinner time to see if my club still existed. I know we should have more ambition than ‘just surviving’ but I do think Fosun’s long term plans can actually work – it won’t be quick, it may be bumpy, but I do actually think it’s the right approach.
As a fan from the mid 70`s..allthough from Sweden..I can certainly preciate where you´re coming from.
This said..fair and simple..the situation back then cannot and shouldn´t be compared in any shape or size to where we are as I am typing this.
I do think the ghost of Bhattis might be holding us back..totally unwarranted..even in the year 2022.
The world has evolved since 1986..we do need to go alomng with it.
 

The Wolf In The North

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There's a flipside to financial sustainability, though, epitomised by Burnley.

Six seasons in the top flight with some decent finishes, and a flirtation with European competition, raking in absolute millions. Never wasted money or spent beyond their means, kept hold of the players they wanted to (until selling Wood), not bloated with ageing journeymen on high wages, adhered to a tight financial model so that they wouldn't hit the rocks if the worst happened and they were relegated to the Championship. And then they got relegated to the Championship.

Not bad luck, not injuries, not sacking Dyche (although most would argue he would have kept them up, despite their dire form earlier in the season). Their downfall was that they didn't continuously reinvest in the team from their position of stability, at least not cleverly enough, and the majority of teams around them did.

Sustainability is budgeting and balancing, and Wolves are impeccable at it, but it's not automatically a successful model in itself. You still have to spend the money allocated to spending, and you have to spend it now and not always be waiting for a better market, and you have to spend it bloody well and minimize your mistakes, because that's the nature of the Premier League and it will **** you up otherwise.

It's fantastic to run like clockwork and have a grand vision of future revenue streams and to be financially solvent with little happy face stickers on every line of your P&L report, but it takes the sheen off it if you're all those things and playing Preston and Blackburn in tier two.
 

Sussex Wolf

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There's a flipside to financial sustainability, though, epitomised by Burnley.

Six seasons in the top flight with some decent finishes, and a flirtation with European competition, raking in absolute millions. Never wasted money or spent beyond their means, kept hold of the players they wanted to (until selling Wood), not bloated with ageing journeymen on high wages, adhered to a tight financial model so that they wouldn't hit the rocks if the worst happened and they were relegated to the Championship. And then they got relegated to the Championship.

Not bad luck, not injuries, not sacking Dyche (although most would argue he would have kept them up, despite their dire form earlier in the season). Their downfall was that they didn't continuously reinvest in the team from their position of stability, at least not cleverly enough, and the majority of teams around them did.

Sustainability is budgeting and balancing, and Wolves are impeccable at it, but it's not automatically a successful model in itself. You still have to spend the money allocated to spending, and you have to spend it now and not always be waiting for a better market, and you have to spend it bloody well and minimize your mistakes, because that's the nature of the Premier League and it will **** you up otherwise.

It's fantastic to run like clockwork and have a grand vision of future revenue streams and to be financially solvent with little happy face stickers on every line of your P&L report, but it takes the sheen off it if you're all those things and playing Preston and Blackburn in tier two.
Well said. It’s a lesson for those who think it’s a cinch to run a club sustainably, and that you could replace Fosun with a non profit organisation and expect the same outcome.
 

optimuswolf

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Excellent post and thread.

I suppose my counterpoint to the fosun approach is that there is no guarantee that we will remain a premier league club wholst others are being less 'sustainable'.

So whilst ultimately we need to become sustainable, thinking we're there now brings with it a real risk of relegation and thats sinks the sustainability argument.

They will believe they can build slowly and manage that risk, but I'm not sure there are many good examples of clubs doing this. Crystal palace have had 10 years maybe?
 

SteveBullsKnee

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There's a flipside to financial sustainability, though, epitomised by Burnley.

Six seasons in the top flight with some decent finishes, and a flirtation with European competition, raking in absolute millions. Never wasted money or spent beyond their means, kept hold of the players they wanted to (until selling Wood), not bloated with ageing journeymen on high wages, adhered to a tight financial model so that they wouldn't hit the rocks if the worst happened and they were relegated to the Championship. And then they got relegated to the Championship.

Not bad luck, not injuries, not sacking Dyche (although most would argue he would have kept them up, despite their dire form earlier in the season). Their downfall was that they didn't continuously reinvest in the team from their position of stability, at least not cleverly enough, and the majority of teams around them did.

Sustainability is budgeting and balancing, and Wolves are impeccable at it, but it's not automatically a successful model in itself. You still have to spend the money allocated to spending, and you have to spend it now and not always be waiting for a better market, and you have to spend it bloody well and minimize your mistakes, because that's the nature of the Premier League and it will **** you up otherwise.

It's fantastic to run like clockwork and have a grand vision of future revenue streams and to be financially solvent with little happy face stickers on every line of your P&L report, but it takes the sheen off it if you're all those things and playing Preston and Blackburn in tier two.
Trouble is a) Burnley weren’t reinvesting in players and b) more importantly they didn’t have the biggest fixer in world football Jorge Mendes in their corner. As much as the pant wetters would like to believe we’ll be absolutely nowhere near relegation this year.
 

Eastyorksyeltz

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Excellent post and thread.

I suppose my counterpoint to the fosun approach is that there is no guarantee that we will remain a premier league club wholst others are being less 'sustainable'.

So whilst ultimately we need to become sustainable, thinking we're there now brings with it a real risk of relegation and thats sinks the sustainability argument.

They will believe they can build slowly and manage that risk, but I'm not sure there are many good examples of clubs doing this. Crystal palace have had 10 years maybe?
Just the 10 eh? I'd say a decade in the top flight is nothing to be sniffed at.
 

smith

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There's a flipside to financial sustainability, though, epitomised by Burnley.

Six seasons in the top flight with some decent finishes, and a flirtation with European competition, raking in absolute millions. Never wasted money or spent beyond their means, kept hold of the players they wanted to (until selling Wood), not bloated with ageing journeymen on high wages, adhered to a tight financial model so that they wouldn't hit the rocks if the worst happened and they were relegated to the Championship. And then they got relegated to the Championship.

Not bad luck, not injuries, not sacking Dyche (although most would argue he would have kept them up, despite their dire form earlier in the season). Their downfall was that they didn't continuously reinvest in the team from their position of stability, at least not cleverly enough, and the majority of teams around them did.

Sustainability is budgeting and balancing, and Wolves are impeccable at it, but it's not automatically a successful model in itself. You still have to spend the money allocated to spending, and you have to spend it now and not always be waiting for a better market, and you have to spend it bloody well and minimize your mistakes, because that's the nature of the Premier League and it will **** you up otherwise.

It's fantastic to run like clockwork and have a grand vision of future revenue streams and to be financially solvent with little happy face stickers on every line of your P&L report, but it takes the sheen off it if you're all those things and playing Preston and Blackburn in tier two.


But you have isolated financial stability and made it mean break even. Sustainability is not defined that way and burnley have failed at being sustainable. Sustainability refers to the continuous improvement of the club with no yo yo relegations . But as your post demonstrates it is not a simple objective and not confined to finance.
 

John de Wolf's hairdryer

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This photo (from The Guardian) and its caption say a lot about Fosun Wolves' direction of travel on the sustainability front. It was taken during our home game against Southampton (the one we won 3-1) during the season just ended:

eSports at Molineux.PNG
eSports at Molineux2.PNG
 

Oh Robbie Robie

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There's the "concept of sustainability"and then the reality.

To compete at the top level of English football and to hope to win trophies, bucket loads of money is required with absolutely no guarantee of success. Further, "success" is short term until the next season.

Seems Fosun are aware of that and have decided that long term business success doesn't depend on winning trophies but it does depend on the business concern being "sustainable" by being self sufficient. Simple stuff really but doesn't play well with football supporters that want to win trophies.
 

Notsoslimshady

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It is refreshing to read a more positive and grounded OP and comments so far on Fosun's general approach. I appreciate it might not be universally popular and as exciting as lots of expenditure but i think it is a sensible approach, especially given the future restrictions - which if done properly could hopefully improve the state of the game. I support the attempts being made to improve tbe turnover for the club, and think a long-term, incremental improvement is the way to go. There have been some frustrating times for sure when it has felt like we couod kick on and haven't. But the last thing i want to see is the club in a financial mess.

I really hope it all pays off
 
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