Turnover - Accounts etc (economics) (the why no transfers thread)

[Northampton_wolf]

Rather than post on an existing thread and take off topic,

Lets have a look at turnover of other prem teams last year

Hear is what we paid on wages:



Wolves - Accounts

WOLVERHAMPTON WANDERERS FOOTBALL CLUB (1986) LIMITED filing history - Find and update company information - GOV.UK

WOLVERHAMPTON WANDERERS FOOTBALL CLUB (1986) LIMITED - Free company information from Companies House including registered office address, filing history, accounts, annual return, officers, charges, business activity

find-and-update.company-information.service.gov.uk

Turnover:

Everyone virtually made big losses

2021-22

Everton - £181m
Wolves - £166m
Fulham - £72m
West ham - £251m
Palace - £160m
Brentford - £140m
Brighton- £167m

Chelsea - £481m

2020-21

Everton - £193m
Wolves - £194m
Fulham - £117m
West ham - £192m
Palace - £134m
Brighton- 167m

Chelsea - £431m

2022-23 - To be Done



I think what you need to read into is this percentage of wages against turnover

Everton - 89.5%
Wolves - 73%
Fulham - 126%
West ham - 53%
Palace - 63%
Brighton- 67%

Chelsea - 70%




What is noticeable is in the accounts our running expenses are close to turnover, without any player sales. When we buy we cause losses as seen in the last accounts, and i expect will be shown in the 2022-23 accounts.

With also massive wage bills, from managers, and players like guedes cunha/sasa/costa etc added, while moutinho/raul/traore/neves are still on books

2022-23 accounts wont look great

Profit and sustainability rules:

Profit and suitability allows teams to spend 90% of turnover on wages, transfers and agents fees in 23/24 season, reducing to 80% in 24/25 and finally 70% in 25/26.

 

[Bawtry Wolf]

Wages will also increase for the last financial year as we will have paid off Bruno and others as well as bringing in JL and his team who will be more expensive so effectively a double hit and an ongoing increase.

We will also have significant challenges in the past due to high wages and several players in one role and too few in others. This is where Mendes has done us no favours as he’s landed us with **** in high wages with little forward value after our first year.

 

[WWFC4EVA]

FULHAM!!!

Am I reading this right?... for every £1m in turnover, Fulham are spending £1.26m in wages?
Sorry, I'm no accountant, so may be reading that totally wrong.

 

[jrpb-3]

Football finance in general seems to go against most good business practice elsewhere.

Fosun saying Wolves must be self sufficient on the face of it makes sense

A model where owners need to continually make more investment with little no return makes no sense.

Given many clubs are in debt. Then in the prem is a self sustaining model realistic/ possible. Is FFP the main issue or have Wolves just spent the money they do have badly. With hindsight the £35-£40m spent on Silva with the impact or lack of he’s had on the team so far feels that money could have been better spent elsewhere

Fosun plans to grow Wolves brand and turnover to fund spending seems so far not to have done much can it in the future?

 

[Northampton_wolf]

FULHAM!!!

Am I reading this right?... for every £1m in turnover, Fulham are spending £1.26m in wages?
Sorry, I'm no accountant, so may be reading that totally wrong.

Correct in there championship year thats what they did, they made a huge loss

Remember this covers 2021-22



Last year in prem before 2022-23 (so relegation year)

They were again basically paying all staff costs as part of turnover, which by new rules they cant continue to do

 

[Brightonwolf]

Is there anyway owners can effect this, or is it about selling stadium rights or training ground rights etc?
I just hear everyone criticise Fosun for not throwing in more money. This wouldn’t help would it?

 

[WWFC4EVA]

Correct last year thats what they did, they made a huge loss

Thanks NW, that's outrageous!!!

 

[WolfLing]

Amortisation costs would have increased massively from January's signings too.

 

[Northampton_wolf]

Is there anyway owners can effect this, or is it about selling stadium rights or training ground rights etc?
I just hear everyone criticise Fosun for not throwing in more money. This wouldn’t help would it?

Not in regard to new profit and sustainability rules no.

We need to generate greater turnover, through either sponsorship, league performances, prize money, esports, shirt sales, TV rights, european football etc

Big one would be attendances etc, if we had a 50k stadium with 30k season ticket holders, but you need the outlay in the first place for the stadium.

 

[jrpb-3]

Is there anyway owners can effect this, or is it about selling stadium rights or training ground rights etc?
I just hear everyone criticise Fosun for not throwing in more money. This wouldn’t help would it?

More investment can get you out of a hole short term. (Jan), but it’s not sustainable unless you are going to get a decent return on that investment I.e future increases to Wolves profitability that allows Fosun to recoup their investment with a return on that with enough left for Wolves to be able to spend on players and remain within FFP

 

[Northampton_wolf]

So if you like at 19-20 which was europa league bit of a herring due to covid but they estimate turnover would have been 190

Our wages to turnover is far less

Wages in 18/19 - 19/20



You can see wages above for 2020-21 and 21-22

I expect we were more at 150m for 2022-23

 

[Mile End Wanderer]

Is there anyway owners can effect this, or is it about selling stadium rights or training ground rights etc?
I just hear everyone criticise Fosun for not throwing in more money. This wouldn’t help would it?

If Fosun invested further into the club it would be essentially kicking the can further down the road

It would free us for this summer and Jan but ultimately we would need to sell maybe one big player every summer if possible but we know that’s not sustainable. Not sure why the goalposts have now moved though. The PL profit and sustainability is BS nobody is adhering to it….

The plan B - not going to plan is the final straw for me long list of BS excuses not to spend. It was okay last week. Now it’s not, without selling €40m more worth of players?? WTF GET OUT OF HERE JEFF AND FOSUN SOLD POOR JL DOWN THE RIVER

 

[sedgwolf1980]

Appreciate the efforts on this thread, but more I read into this the more I think Wolverhampton Wanderers FC are largely irrelevant. Profit, loss, not sure it really matters.

What matters is at Fosun h/o level and, from what I can see, they are in the do do.

Doubt Jeff even has a say in things right now, it’s all happening at a much higher level.

 

[Wagstaffe Was Magic]

Not in regard to new profit and sustainability rules no.

We need to generate greater turnover, through either sponsorship, league performances, prize money, esports, shirt sales, TV rights, european football etc

Big one would be attendances etc, if we had a 50k stadium with 30k season ticket holders, but you need the outlay in the first place for the stadium.

I’m sorry, but we don’t have a fan base capable of sustaining 50k seats!

Reality

 

[JohnB]

However we define it the salaries to players is through the roof.

Freedom of trade stops this (and various workarounds) but a wage cap for players would stop all the money going through to players/agents, enable grounds to be developed/ticket prices capped and also limit attractiveness of Saudi. It also stops Big 6 using FFP to control spending of others.

Problem is only one side can win a league/win Champions League and paying more and more is no guarantee for success.

Why would anyone own a PL side….

 

[Cookyssweetleftfoot]

I’m sorry, but we don’t have a fan base capable of sustaining 50k seats!

Reality

While I am sure you are correct, in reality though you do need to speculate to accumulate. A larger stadium with concessions or even cheaper tickets would encourage a larger attendance. Obviously you then need a competitive team to sustain this.
How does any team grow its support otherwise?
A new paid for stadium like City and West Ham maybe? Sadly that won’t happen either in Wolverhampton.

 

[Northampton_wolf]

I’m sorry, but we don’t have a fan base capable of sustaining 50k seats!

Reality

Perhaps

but even if we can get our capacity up to 42k similar to villa it will bring around better income.

On note of villa there turnover slightly higher than ours

 

[woop woop barmy army]

Guess this is why Fosun are looking to be creative in other ways to bring in funds.

Is FFP here to stay? Or with what's happening in Saudi likely to move this.

The last part of heading
Profit and suitability allows teams to spend 90% of turnover on wages, transfers and agents fees in 23/24 season, reducing to 80% in 24/25 and finally 70% in 25/26.

So everyone should be making 30% profit come 25/26 season

Based on the massive transfer fees and wages I dont see how this will happen.

Are clubs going to have enough of this and break the rules and take the possible fine / transfer ban to get around this.

 

[AndyY]

Stadium capacity discussions have been done to death on several "stadium threads", and whilst I think that stadium expenditure was outside FFP calculations before, I dont think it is in the near future (please correct if I am wrong) so irrelevant now.
Most importantly, if Fosun don't (or can't) prop us up financially (within the rules) our turnover has to grow and our costs have to be cut.
Partly (mainly?) i think that the current situation is because Fosun have to explore every possible avenue to pay back their own interest payments on their leveraged acquisitions in the past, and partly i think its in prep for the new P&S rules.
Grateful if @Nothampton_wolf could explain (for the hard of understanding, like me) what the rules are now and in the future with regard to allowable owners financial support.
The problem is that the likes of Man****ty and PornUtd have been gifted significant advantages with their stadiums - an absolute outrage IMHO - and other members of the "Sky6" have already got high turn over so the whole situation is designed to keep them at the top. How the other clubs voted for it is a mystery.
What will be interesting to see is how clubs like Chelsea, Everton, Fulham, Crystal Palace etc etc cope with the new P&S rules.
And then there are the supposedly ongoing investigations into the alleged financial irregularities at Man****ty and Everton as well.......
As Wolves fans we are worried, but maybe we are actually getting ahead of the curve in financial sustainability? I hope so anyway.
And then there's what happens to Spurs if Joe Lewis goes down, based on todays revelations in the USA......

 

[Northampton_wolf]

Stadium capacity discussions have been done to death on several "stadium threads", and whilst I think that stadium expenditure was outside FFP calculations before, I dont think it is in the near future (please correct if I am wrong) so irrelevant now.
Most importantly, if Fosun don't (or can't) prop us up financially (within the rules) our turnover has to grow and our costs have to be cut.
Partly (mainly?) i think that the current situation is because Fosun have to explore every possible avenue to pay back their own interest payments on their leveraged acquisitions in the past, and partly i think its in prep for the new P&S rules.
Grateful if @Nothampton_wolf could explain (for the hard of understanding, like me) what the rules are now and in the future with regard to allowable owners financial support.
The problem is that the likes of Man****ty and PornUtd have been gifted significant advantages with their stadiums - an absolute outrage IMHO - and other members of the "Sky6" have already got high turn over so the whole situation is designed to keep them at the top. How the other clubs voted for it is a mystery.
What will be interesting to see is how clubs like Chelsea, Everton, Fulham, Crystal Palace etc etc cope with the new P&S rules.
And then there are the supposedly ongoing investigations into the alleged financial irregularities at Man****ty and Everton as well.......
As Wolves fans we are worried, but maybe we are actually getting ahead of the curve in financial sustainability? I hope so anyway.
And then there's what happens to Spurs if Joe Lewis goes down, based on todays revelations in the USA......

Owners can pour money into stadium development, training facilities, infrastructure basically without issue

You put money in as basically loans and then the owner has control over said money, fosun did this and then they wrote the loans off.

You can put money in but basically with out the turnover you cant meet these new rules

 

[Eastyorksyeltz]

This is an amazingly sensible thread, thanks Northampton. It puts a useful context to where we find ourselves, without any conspiracy theories. It's not a great place to be, but it is clear there are no simple answers irrespective of any future ownership and management changes.

 

[Northampton_wolf]

i expect our 2022-23 accounts not to look rosey, due to wages and or player purchases

Remember

Neves, guedes, nunes,sasa, lemina,sarabia,costa, dawson, moutinho, adama, raul, cunha

Are all on the books in this year, plus the purchase costs off guedes,nunes,sasa, and everything else in Jan

We basically spunked everything to stay up after a poor start to the year

 

[Bawtry Wolf]

This is an amazingly sensible thread, thanks Northampton. It puts a useful context to where we find ourselves, without any conspiracy theories. It's not a great place to be, but it is clear there are no simple answers irrespective of any future ownership and management changes.

It also emphasises the importance of a quality academy as it’s the best way of raising revenue from player sales.

 

[Brightonwolf]

Owners can pour money into stadium development, training facilities, infrastructure basically without issue

You put money in as basically loans and then the owner has control over said money, fosun did this and then they wrote the loans off.

You can put money in but basically with out the turnover you cant meet these new rules

I don’t understand what people expect Fosun to do, they can’t fiddle the books and not sure how they can improve our finances legitimately.

 

[Brightonwolf]

It also emphasises the importance of a quality academy as it’s the best way of raising revenue from player sales.

How does our compare to others.
Brighton have a large area they can cherry pick from whereas I’d imagine the midlands is saturated.

 

[Starsky]

Is this the first time that Fosun have been faced with the choice of whether to cover our losses( and therefore affect allowable losses) from an FFP perspective?

 

[SuperGran]

i expect our 2022-23 accounts not to look rosey, due to wages and or player purchases

Remember

Neves, guedes, nunes,sasa, lemina,sarabia,costa, dawson, moutinho, adama, raul, cunha

Are all on the books in this year, plus the purchase costs off guedes,nunes,sasa, and everything else in Jan

We basically spunked everything to stay up after a poor start to the year

With regards to the last sentence including Bruno payoff julen and teams wages no wonder we are broke. But why risk all of that spend now!

 

[Bawtry Wolf]

How does our compare to others.
Brighton have a large area they can cherry pick from whereas I’d imagine the midlands is saturated.

Probably not the best person to ask as I’ve not done a thorough comparison but we do seem to get our fair share into the professional game with is positive. We also seem to be buying and selling more academy players this season. I do think our academy has improved massively since Fosun. Compared to Brentford who have only just established their academy we’re miles ahead.

 

[AndyY]

i expect our 2022-23 accounts not to look rosey, due to wages and or player purchases

Remember

Neves, guedes, nunes,sasa, lemina,sarabia,costa, dawson, moutinho, adama, raul, cunha

Are all on the books in this year, plus the purchase costs off guedes,nunes,sasa, and everything else in Jan

We basically spunked everything to stay up after a poor start to the year

Yes and failed to sell Traore and Neves etc when at height of value.
The chickens are well and truly coming home to roost (to be eaten)

 

[AndyY]

I don’t understand what people expect Fosun to do, they can’t fiddle the books and not sure how they can improve our finances legitimately.

Except that Man****ty have!!!!!!!

 

[Northampton_wolf]

Except that Man****ty have!!!!!!!

And then caught.

The first time, it was so long ago they did that circumvented the rules and then they won on appeal.

Now a little different,

but there turnover is massive inevitably they have got to the point where they are so big, with all these buybacks and easy profit wins on players that they are now juggernauting along

I mean other than grealish

City - haaland, alvarez, kovacic 100m

Aresnal - Rice.... 105m

 

[AndyY]

With regards to the last sentence including Bruno payoff julen and teams wages no wonder we are broke. But why risk all of that spend now!

I expect that they are hoping that JL can keep us above 17th with what we have. And to be fair, I dont think the 1st 11 is too shabby at all, its the depth of the squad and the competition/ cover for loss of form and injuries thats weak.

 

[old wittonian]

How does our compare to others.
Brighton have a large area they can cherry pick from whereas I’d imagine the midlands is saturated.

I think you'll find that the majority of Academies really favour London youngsters.
I know this from being ITK.

 

[Bawtry Wolf]

I expect that they are hoping that JL can keep us above 17th with what we have. And to be fair, I dont think the 1st 11 is too shabby at all, its the depth of the squad and the competition/ cover for loss of form and injuries thats weak.

But that’s what Leicester thought and Fosun thought last season with Lage. Such assumptions can be very expensive

 

[Eastyorksyeltz]

I expect that they are hoping that JL can keep us above 17th with what we have. And to be fair, I dont think the 1st 11 is too shabby at all, its the depth of the squad and the competition/ cover for loss of form and injuries thats weak.

I think that would be a reasonable plan if the manager was onside with it. He clearly isn't, or at least if he is, he is disingenuousley hedging his bets at the same time.

 

[Sedgley Gold N Black]

Football finance in general seems to go against most good business practice elsewhere.

Fosun saying Wolves must be self sufficient on the face of it makes sense

A model where owners need to continually make more investment with little no return makes no sense.

Given many clubs are in debt. Then in the prem is a self sustaining model realistic/ possible. Is FFP the main issue or have Wolves just spent the money they do have badly. With hindsight the £35-£40m spent on Silva with the impact or lack of he’s had on the team so far feels that money could have been better spent elsewhere

Fosun plans to grow Wolves brand and turnover to fund spending seems so far not to have done much can it in the future?

You don't make your return on a football club through it's day to day profitability, I'd be incredibly surprised if FOSUN went into this thinking that.

 

[Northampton_wolf]

You don't make your return on a football club through it's day to day profitability.

Return on football clubs is generated on a sale really.

If they sell wolves for 750m to 1bn they get there return

 

[Adrian_Monk]

I’m sorry, but we don’t have a fan base capable of sustaining 50k seats!

Reality

Almost all football clubs have a fan base capable of sustaining 50k seats. They just need continued on the field success and ticket prices low enough that no commercial manager would ever sign off on.

 

[AndyY]

But that’s what Leicester thought and Fosun thought last season with Lage. Such assumptions can be very expensive

Agreed, but as I have explained elsewhere, Leicester's situation was actually worse than ours as they had a lot of first teamers on big wages who were all coming to the last year of their contracts and had limited re-sale value, whilst failing to re-invest. They became stale and suffered accordingly.
We have got rid of some of our high earners (Neves, Raul, Moutinho etc) and got decent sales income from Neves, Collins, Coady etc, whilst refreshing the squad with players such as Nunes, Gomes, Sarabia, Cunha etc (although we know that Guedes didnt work out!).

 

[wolfslair]

a lot of people talk about their good track records as business owners. But football business and how to operate makes no sense in any industry or arena due to the losses needed.

I never worked in a club that wasn’t operating at a loss or relying on debt to operate. Look at the largest clubs like Barca, they operate with nightmare and impending doom levels of debt.

fosun went into football with what appears to be an arrogant thought they could do something that isn’t possible in the sport. If the biggest clubs with the most out reach and global brands cannot do it, what made fosun think they could???

I called it last summer, the model is crap….. red bull had a massive brand awareness and sexy history for partying, extreme sports and other things. They will never sell a club so the losses simply don’t matter as one part helps the larger machine and brand awareness for parent company red bull the soft drink company. So they are essentially a loss leader in every sense of the word for the wider group.

Fosun did not and do not have the skills or knowledge to run a football club. The fact they haven’t hired an actual football person into a position of authority at the board level with experience of the model they are trying to operate speaks volumes.