WOLVERHAMPTON Wanderers took a £ 40 million hit on revenues and turned a £ 22 million profit in 2018-19 to a £ 36.7 million loss in 2019-20. Unlike some clubs who reported a fall in matchday income, Wolves saw this revenue stream rise by 10% to £ 12.7 million.
The club’s revenues for the season totalled £ 132.6 million, some 23% lower than 2018-19. Wolves’ biggest drop came in broadcasting, a 28% decline to £ 95.8 million. Commercial income also fell by 13% to £ 24.1 million. Wolves calculated that if it were not for a deferred amount of broadcasting income, the club would have made a small profit of around £ 20 million. They will benefit significantly from the deferral in 2020-21.
Wolves enjoyed a lengthy UEFA Europa League run in 2019-20 that started in late July and ended over a year later at the quarter-final stage where they lost to Sevilla. They played 18 games in the competition against clubs from eight different countries. They failed to meet their objective of qualifying for Europe in 2020-21.
Wages went up to a record high of £ 94.7 million, representing a wage-to-income ratio of 71%. Since Fosun International took over the club, wages have more than trebled, but they remain among the lowest payers in the Premier. In 2016-17, Wolves’ wage bill was just £ 28.2 million, which was 119% of revenues. At the time, they were in the Championship where salaries invariably exceed income.
Wolves under Fosun have been transformed from a financial perspective. As recently as 2016-17, they generated just £ 23.7 million. Although income reduced in 2019-20, the £ 132.6 million was still the second highest total in the club’s history. Despite this growth, Wolves are still among the bottom half dozen in terms of revenues. In 2020, the club was named among the top 20 football brands in the prestigious Brand Finance annual review.
The club’s playing squad has a big Portuguese presence and all bar one player is a client of Jorge Mendes’ GestiFute player agency. In total, eight Wolves players have Mendes’ company as their agent. Fosun also has a 15% stake in GestiFute’s parent.
Wolves pay far less in agent fees than most of their peers. In 2019-20, they paid £ 8.6 million to intermediaries, some £ 20 million less than each of Liverpool, Manchester City, Manchester United and Chelsea.
They have, however, been very active in the transfer market since Fosun arrived. They have bought more players than any other current Premier League club (129) and also sold more (also 129). Only Manchester City, Manchester United and Arsenal have incurred a higher negative transfer balance than Wolves’ £ 220 million between 2016-17 and 2019-20. Their income from player sales totalled £ 9.5 million which was lower than the previous campaign, but still up on 2017-18. They have continued using the market strategically in 2020-21, signing Fábio Silva (Porto) and Nélson Semedo (Barcelona) for a total of £ 65 million but recouping the whole amount by selling Diogo Jota (Liverpool), Matt Doherty (Tottenham) and Hélder Costa (Leeds United).
The club has anticipated working capital challenges going forward and has increased its financing with Macquarie Group to £ 75 million (from £ 50 million). This comprises a £ 60 million term loan and a £ 15 revolving credit facility. Given the current climate, it is no surprise that net debt increased to £ 125 million.
Wolves are a club with an interesting future and have retained their reputation for bright, attacking football. Their momentum over the past few years has been impressive, but the question is, will the pandemic curb their progress?