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15 Oct 2024 19:39:06
As a distraction from the doom and gloom arising from the results (me too)I have downloaded Wolves accounts from Companies House for 2023 and 2022.
This reveals the following Wolves are insolvent at 31 May 2023 and have net liabilities of £163 million, they can only trade with the financial support of Fosun.
The amount owed to Fosun companies increased by over £64 million in the 2 years to 31 May 2023, so much for no support!
The total net profit before costs of player transactions in the 3 years 2021 to 2023 is over £4 million. Although there is a marked deterioration in the year to 31 May 2023 with a loss of over £25 million.
The losses on player transactions which are amortisation of player registrations less the profit on sale of player registrations amount to over £90 million for the years 2021 to 2023 inclusive.
Here lies the potential problem for
the profit sustainability rules (compare us to Brighton a similarly sized club)
I hope this was of interest as it shows the actual finances not rumours.
1.) 16 Oct 2024 12:59:01
If they're looking to sell then it's not going to be easy.
2.) 17 Oct 2024 11:28:40
Thorough explanation Wolves1960 but could you tell us in simple terms please? ?
3.) 17 Oct 2024 15:11:48
BoSWolf:
Simple explanation-Bust
4.) 17 Oct 2024 15:56:54
Hi BoSWolf
If you can say what it is you do not understand I will try and explain it.
Wolves1960
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30 Nov 2024 19:09:52
For the future is gold
To calculate the profit on sale of RAN obviously requires assumptions.
So I have made the following assumptions
Sale is in summer of 2025 for £30 miiion
Fee to buy out sell on clause is £9.5 million
Unamortised part of original transfer fee is £2 million
Wolves will receive £30 million but pay out £9.5 million leaving net proceeds of £20.5 million.
Deduct the unamortised balance of £2 million results in a profit of £18.5 million.
Obviously the result depends on the assumptions made if only our new Chancellor understood that. Sorry totally irrelevant but often her figures do not seem to make sense.
Hope that is helpful.
Wolves1960
30 Nov 2024 15:10:15
Hi Everyone
I read with interest and some not little amusement the recent comments about Wolves 2022/2023 accounts.
I have posted this extract from the audited accounts at Companies House before but do it again so that the figures are readily viewable.
Turnover 169
Operating costs excluding player amortisation
and profit on sale figures -184
Operating loss -15
Loss on player trading -39
loss before interest -54
Interest -10
Loss for the year -64
The loss on player trading is made up as follows
Amortisation of fees -82
Profit on sale of player registrations 43
As Above -39
So different posters have combined the above figures in different ways eg
The future is gold added all the figures except profit on sale to arrive at a loss of 107 million this is accurate but in my view totally selective if not misleading.
If I combine all of the figures except the amortisation of fees we arrive at a profit if 18 million this is equally selective and even more misleading.
In the audited accounts the figure of loss on player amortisation less profit on player sales is shown in a totally different column to the other operating costs. Clearly the people who prepared the accounts and audited the accounts intended the figures should be viewed together not separated as in the 2 examples above.
if we look at the profit and loss account any competent accountant would tell you the stand out figure is the amortisation figure of 82 million, in essence Wolves for several years bought players badly I am sure you can all think of players whose amortisation of fees is included in the above but have made little or no positive contribution to the club.
Many on here have commented forget the player transfer problems the solution lies in increasing other forms of income. Wolves have a stadium the capacity of which is the fourteenth highest in the premier league. So 13 clubs have higher gate receipts probably more shirt sales more sales of matchday refreshments and arguably are more attractive to sponsors. So looking from a a commercial clout perspective Wolves in the long term are likely to be a club whose average position is in the bottom half of the premier league. This may not be what we all want but it may well be the reality.
Just to conclude others have made comments about the suitability or otherwise of posters to comment about Wolves accounts. I am happy to share that prior to my retirement I was a chartered accountant for 50 years so a know a little bit about preparing, auditing and presenting accounts
We may disagree about interpretation of matters on here but I am sure we just wish the best for Wolves and hope we are still in the premier league next season.That for me at least will be a success from where we are now.
Wolves 1960
25 Oct 2024 14:24:18
Hi to everyone and in particular the future is gold
I probably have not expressed myself as clearly as I could in the last post so I will try and clear this up. Obviously amortisation costs are part of the total costs but they should be viewed as in a separate cost centre.
Football cubs at least premiership clubs are now big business and should be run as such. One key component of this is to break the business into key cost/profit centres. I have spoken to contacts I have in the football industry ( not at Wolves) to obtain a hopefully clearer explanation for this.
Cost centre 1 is general trading ie income less wages repairs etc.
Cost centre 2 is player purchases and sales.
Cost centre 3 is the academy but this is sometimes merged with cost centre 2.
Over a period of time which could be 3 years or 5 years cost centre 2 should either break even or have a small loss. To do this profit on player sales should be about equal to the cost of amortising transfer fees.
So to answer the question how can we buy anyone if our profit in cost centre 1 is only £4 million this is not the source of transfer fees in well run clubs. I asked my contacts for an example of this and Brighton were suggested as probably the best example. In the 3 years to 2023 Brighton's income from player sales exceeded amortisation costs by £47 million you may recall Wolves had a comparitive loss of £90 million. So by better management of this cost centre Brighton have £137 million more than Wolves to invest in the team.
To be fair to Wolves the figures for them are before the sales of players in the summers of 2023 and 2024 so I expect in the next 2 years the figures in this cost centre should be much better.It is a pity previous losses are probably inhibiting investment in the squad but this is the point I have been trying to make Wolves big problem is the recent losses in this cost centre.
As a diversion I asked at what point successful clubs in this sector look to replace players they have sold at a profit. The answer is as soon as the recruit is seen to be an asset for the first team and also a potential sale at a substantial fee the scouts are instructed to identify potential replacements so if the player is sold the replacement is already lined up. Usually the replacement will be from abroad or if in the UK probably from the championship so the target replacement will see the move as a step up and therefore likely to want the move.
So to conclude although increases in general revenue eg better sponsorship deals would be great for Wolves to avoid problems with profit and sustainability rules the key improvement has to be in cost centre 2. The summers of 2023 and 2024 may well have sorted this out but the key to success on the field lies in the recruitment of players. Brighton can do it why can't Wolves?
Very final thought Forest had the worst record from conceding goals from corners and set pieces last season, this season no goals conceded so far. Why a new centre back signed for less than £20 million. How did they find him when we apparently could not find a suitable replacement for Kilman?
Wolves1960
24 Oct 2024 18:44:21
Hi Everyone
I posted extracts from the accounts for the 3 years to 31 May 2023 a short time ago to try and help more informed discussion.
At least as far as those accounts are concerned LongmyndWolf is wrong. For those 3 years total income exceeded all running costs by over £4 million.
The problems lies in buying and selling players not the wages.
The cost of amortising the transfer fees for players over those 3 years is £210 million this is offset by profit on sale of player registrations amounting to £120 million ie a loss of £90 million.
So a profit of £4 million becomes a loss of £86 million when these costs are included
This may well worsen when the next accounts are published but for the minute the problem is the cost of buying and selling players
Wolves1960
17 Oct 2024 15:56:54
Hi BoSWolf
If you can say what it is you do not understand I will try and explain it.
Wolves1960