Some absolutely superb threads on wolvesrumours.co.uk this last week or so. I thought it was sensible to take a break from posting after the somewhat unfortunate “accounts thread”. Accounts are both boring and very opaque if you don’t have experience in the subject. And I have also been in the gulf for the Grand Prix – thus missed the Everton game – 6 crosses 6 goals – oh dear!
Firstly, Wimborne made a brilliant point about the “rule” changes militating against us – and the other 13 non “Sky 6 sides”. Why, for example, did Wolverhampton Wanderers vote for increased subs so that we can bring on a kid who is totally out of his depth whilst our rivals can bring on a multi-million pound international superstar? 12 against 12 we can compete even 15 or 16 – to allow for injuries and suspensions – we might, but 20 player matchday squads kill us.
We slog our 12 or 13 into the ground and our rivals rest and rotate – even in Nuno’s days we fell away in the final few games each year and that has only got worse!
Secondly, someone – apologies don’t recall who – made the absolutely terrifying point about our debt. To banks we owe £114m less cash of £33m i.e. circa £81m largely payable at SONIA plus 3.5% or currently well over 8% pa! We owe £162m net to other Fosun companies and we owe £188m to other clubs less circa £50m owed to us i.e. £138m for past transfers. Plus there are contingent payments to. For a grand total of £461m!
Finally, a very sensible and adult debate between Skrekken and BB regarding our place in Fosun’s empire and how we are viewed/managed. I visited Fosun’s UK offices in 2019, (financial business and nothing to do with football), and although it is obviously true we are a very small part of their overall operation we are as Skrekken beautifully put it very high profile and the offices were festooned with Wolves references!
At that stage we were a massive success story and Fosun were viewed as geniuses and presumably were loving it! However shortly after things started to go very badly wrong, for example the Fabio and Hoever for Jota deal, where they are probably well over £100m out of pocket. (over paying in fees and wages for our purchases and with the benefit of hindsight undercharging in fees for Jota).
Indeed, since then no matter what they did, things have just got worse and now they are no longer feted but in fact disrespected. From my time in the Far East, this is the worst possible thing that could happen to them!
I guess therefore, that we are not popular anymore and they would almost certainly like an honourable exit. But how? Pre Seville, they could have sold at a huge profit. Pre Coventry, they could have got out clean. Now? If we go down, income plummets but costs go nowhere! You have to firesale the squad and slash all other costs.
Given the debt even if Fosun writes off theirs and we don’t incur the contingents – as we sell all the players – we won’t get anywhere near enough money to pay our way, note as discussed previously even with Premier league income we lose tens of millions, let alone our debts.
Avoiding insolvency will be very hard and will require Fosun/new owner to support the club financially. Who will pay to do that? So Fosun can’t sell and in reality we have to stay up. Fosun are obviously not stupid but have been very badly advised and have made a real mess of things leading us to where we are.
There are now probably only two options: Do nothing and walk away, as they did with Thomas Cook, accepting relegation and insolvency allowing the club to fold and letting someone else try to rebuild from the wreckage. Or double down as they did with JL two years ago.
Fortunately, although it will be very hard, since we are now in serious danger of needing 25+ points from the 2nd half of the season, we have a decent but unbalanced squad. Buy an adult CB or two and perhaps another forward to take the load off of Cunha – Kilman and Neto would be fine? – and get a coach to sort out the defence and we should still have a chance.
I have to believe that Fosun will choose the latter route but to date their actions do not give me any real confidence that they will!
Written by Thefutureisoldgold1 December 12 2024 15:43:33
