Wolves are back, but can they become a credible power again?
Posted on May 5, 2018
IT’S good to see a grand old name like Wolverhampton Wanderers back in the Premier League. One of the founding members of the Football League in 1888 (they finished third, behind Preston and Villa), they’ve long been a club with a great history – three league titles and four FA Cups – rather than an institution with a rosy future. But that all could change now the club has wealthy backers – or, at least, that’s the current script.
However, before Wolves get too carried away, there’s an agenda. The club is owned by Fosun International, a Chinese conglomerate with fingers in many pies. When the Shanghai-based company expressed an interest in a down-on-its-luck Midlands football club, many people questioned their motives. At the same time, Chinese investors have been eyeing the region with more than a passing interest – Aston Villa and West Bromwich were also being courted by businessmen from the far east.
There’s a tendency in international business to look no further than London and, at a push, Manchester and Liverpool for opportunities. Indeed, global companies invariably only look at places like Birmingham as a possible low-cost outsourcing locations. So why would Fosun, an organisation that has interests in London, New York, Tokyo, Brazil, Russia and Sydney, among other places, be interested in a post-industrial town like Wolverhampton (population 260,000)?
The Chinese way of doing business depends on building networks – they call it “guanxi”. In Britain we might refer to it as “the old boy network”. Fosun have proved to be pretty adept at creating commercial webs of mutual cooperation. Fosun have many facets to their network – their business, by definition, is highly connected due to its diversity, ranging from financial services, including an interest in Bitcoin, to mining and engineering. The latter is important, for Fosun may well have their eyes on the controversial High Speed Railway 2 project which runs right through the Midlands. Other Chinese companies may also be circling for that exact reason.
Right now, Wolves fans won’t care too much about that, but what they should be a little concerned about is the complex network that surrounds Fosun and its links with the so-called Super Agent, Jorge Mendes.
Mendes, a “known associate” of Fosun, sold them a 20% stake in his Gestifuta company in late-2015. There’s something of a Gordian knot surrounding Mendes (and Fosun), but Wolves describe him merely as a “friend of the club” and despite suggestions he is the puppet master, not in charge of recruitment.
Mendes’ footprint, nevertheless, is all over the Wolves squad, including manager Nuno Espirito Santos, who replaced Paul Lambert in May 2017. Pippo Russo, a New York-based sociology professor, has written a book about Mendes and says that Wolves are now firmly entrenched in the “Mendes system”.
So what is this system? Basically, it is a network of clubs which look to Mendes for help in acquiring players, either permanently or on loan. This might involve players that are on Mendes’ books moving from a club where he has influence to another within the network. The cogs keep moving and with every transaction, Mendes and his company earn a fee. This has made him what some people consider to be the most prominent mover and shaker in modern football.
An extraordinary number of Wolves players are Mendes people – for example, Diogo Jota, the 21 year-old striker who came on loan from Atletico Madrid and from July will be permanent. He’s Wolves’ leading scorer this season. Then there’s Portuguese winger Hélder Costa, who arrived from Benfica for £ 13 million, a then-record fee for the club. In 2016-17 they also signed Ivan Cavaleiro from Monaco for £ 7 million. They are both clients of Mendes. Then in 2017-18, they acquired Rúben Neves – another Mendes connection – from Porto for £ 15.8 million, breaking the record set by Costa’s hiring. Brazilian forward Leó Bonantini, also linked to the super agent, is on loan from Saudi Arabian club Al-Hilal
There’s no denying Wolves have bought big and they have a team that was well ahead of its rivals, hence three of the squad – goalkeeper John Ruddy, defender Willy Boly and Neves – were named in the PFA team of the year for the Championship. The question is, have Wolves overspent to win promotion and will they be able to strengthen their team for 2018-19.
The financial figures show that they may have difficulty in pushing on in the short-term, unless something changes. The club has admitted that it is close to breaching Financial Fair Play rules and in 2016-17, they made a loss of £ 23.2 million, versus a £ 5.8 million profit in 2015-16. Fosun said that the club needed to increase expenditure on players to become more competitive and that’s exactly what has happened. Wolves have spent £ 67 million on new players since Fosun arrived on the scene. Wages increased to £ 24.9 million and the club’s net debt rose by 459% to £24 million. At the same time, crowds are averaging over 28,000 at Molineux, so public interest is rising once more.
As it stands, the “investment” has paid off and Wolves have had a barnstorming season. With one game to go, they were on 99 points, winning 30 of their 45 games, and there’s 10 points between them and second-placed Cardiff City.
How will they fare next season? Wolves intense and very energetic style may go down well in the top flight but predictions range from a top six finish to a year of struggle. The club has moved upa gear, although many but now some of their rivals will be more resourced. The Midlands has not had a brilliant year in the Premier, Stoke are down and West Bromwich Albion are on the brink. In the past decade, the region has produced just three top six finishes in the top division. Wolves will never have a better chance to change that, but question marks will remain about who is really pulling the strings at old gold Molineux.