by Bulldog Drummond
A comparison between Arsenal and Wolverhampton is telling…
Wolverhampton have played one game more than Arsenal, but have scored 23 goals fewer, conceded 11 goals more, and have 24 points fewer than Arsenal.
And yet back in May 2020 – just two and a half years ago, the league table read rather differently…
Indeed as recently as 10 February this year the table of the last six games played showed Arsenal second and Wolverhampton third across those matches. However, now the table for the last six games reads rather differently…
So what has gone so wrong for them and so right for us? The simple answer is the owners: Fosun as opposed to the Kroenke family.
Fosun International Limited is a Chinese multinational conglomerate holding company founded in 1992 with no background in football.
But more than that, Fosun is a debt-laden company because it has borrowed money (which has to be repaid in the short term) in the belief that through the brilliance of its owners, it would make even more money, where others can’t because they aren’t clever enough.
There are a lot of such situations, and generally a lot of the money has to be repaid in the short term, something the borrowers take on because of their belief that they are brilliant and everyone else is stupid. And now, unfortunately, the holding company that owns Fosun doesn’t have the cash to pay off the loans that mature in the next year. In short, they are knackered.
Its solution is to sell off its assets, and they have to do that now, even though the value of the assets has dropped considerably. And in this sort of situation the very last thing it is going to do is start throwing money at a football team on the other side of the world. Hence Wolverhampton’s decline.
And indeed to emphasize the problem last year Chinese Super League champions Jiangsu FC announced they were ceasing operations with immediate effect – just three months after they won the league for the first time. They are owned by Suning, a retail giant, who by chance also have a majority shareholding stake Inter Milan. Jiangsu lost their sponsor.
But the writing was all over the wall as far back as 2019 when as the local paper the Express and Star put it “Wolves have taken out a £50 million loan secured against future television revenue.” In short, they borrowed a load of money, but that has to be repaid, and the way it is being repaid is through using the next load of TV cash to repay the loan. Which means the next season’s TV money has been spent months before it arrives.
A major part of their problem for Wolverhampton was that the income from matchdays and TV represented 84% of their total income. Only Leicester among the clubs which a couple of years back were pretending to be among the new elite, have a higher percentage of income coming just from a couple of sources.
So Wolverhampton are in deep deep mess. As for their owners, they are in $90 billion worth of mess in many estimates. So while Fosun entered as the good guys, writing off huge debts the club had accumulated and then spending loads in the transfer windows – that’s all gone. Last summer Wolverhampton spent £100m and recouped £61m in sales and after 14 matches last season they were sixth but £100M in debt Now they are 19th and the owners can’t bail them out.
So can Fosun sell Wolverhampton W? Yes if there is a company out there that is utterly desperate to buy a club no matter how dire its financial situation. But no one is ready to buy except at a really knocked-down price. And Wolverhampton’s problems are profound.
For example, Wolverhampton were promoted in 2017/18 into the Premier League. In the next two seasons, they had Raúl Jiménez as their top striker scoring 17 and then 27 goals in those first seasons respectively.
In 2020/21 they had two joint top strikers Pedro Neto and Ruben Neves. They each got five. Last season they again had joint top strikers – they each got six goals
Despite this they managed to end up 13th and 10th in the league the last two seasons. But without strikers who can really do the business, they are not going anywhere but downward. This season they are the lowest-scoring team (eight goals in 14 games). On the pitch that’s where the problem is. In the boardroom it is incompetence, believing one’s own propaganda, and just plain bigtime debt.
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