Good year for Wolves despite posting £39m loss, says expert
Wolves fans have ‘nothing to worry about’ despite the club posting an after-tax loss of almost £40million in their latest financial accounts.
Documents published yesterday, showing activity up to May 31 2020, saw the club declare a loss of £39.3m – after a £19.5m profit the previous year.
But Wolves say had it not been for Covid-19 and a significant reduction in TV money, they would have achieved a profit of £17.6m.
Football finance expert Kieran Maguire feels they have done well given the circumstances, too.
“I think actually, while the numbers look scary, once you strip out the impact of Covid, they’ve had a good year,” said Maguire, a University of Liverpool lecturer and author of ‘The Price of Football’.
“Everybody is incurring huge losses. Wolves are probably mid-table in terms of losses in the Premier League.
“So, going forward, they’re in a reasonably strong position. They’ve invested huge amounts in the playing squad, over £100m, and also sold a couple of players after May 31. That’ll have brought in cash, from Diogo Jota and so on.
“So, there’s nothing to worry about from a fans’ point of view.”
Money given to Wolves by the Premier League was down from £114.7m in 2019 to £72.5m this time around.
The club’s annual wage bill bumped up slightly, going up from £80.8m to £83.1m.
Wolves have increased their financing with Macquarie Group from £50m to £75m – made up of a £60m loan and a £15m revolving credit facility. It would need to be repaid earlier in the event of relegation.
“They’ve been in the Premier League three years, and, looking at the numbers, spent £300m on player signings. That’s just phenomenal and far more than other promoted clubs,” explained Maguire, who also presents The Price of Football Podcast.
“But they’ve managed to keep the wage bill low. Their overdraft facility has gone up to £75m but everybody should be relatively relaxed.
“Providing Fosun are still around, then there’s nothing to worry about.
“Manchester United have done it, as well as Spurs, Arsenal and West Ham.
“It’s the nature of the beast. If you go a full season with no people coming through the turnstiles, it’s going to hit clubs, and Wolves have done the sensible thing.”
Maguire added: “What you don’t want to be doing is be living from hand to mouth, and then getting into a problem.
“By getting in early and sorting out their borrowing arrangements, it’s sensible business management in my view.”
