06 Sep 2020 10:52:45
ED002 ; when Matty Cash was being mentioned I asked why we would be interested in Championship players (2/ 9) and it was pointed out that I wasn’t getting, the, FFP situation, perhaps you could run through it again for us, think there might be a few more of us who don’t get it.
{Ed002's Note - Wolves have been punished for being in breach of FFP and aside from European squad size reductions for two years out of theree (if Wolves qualify), the fine (much of which is deferred), Wolves have to comply with a €30M maximum break-even deficit (losses covered by the owner) for the year ending 2020 and an aggregate break-even by 2021/22 for financial years ending in 2019, 2020 and 2021. So the club cannot simply keep spending as much as they have been on wages and transfers - money needs to be raised through sales and getting players off the wage bill.}
06 Sep 2020 11:54:45
I'm thinking best to let Jeff Shi worry about it! When you're dealing with bigger numbers I suspect it can be a bit easier. It makes it harder for rich people to come in and buy their way to the title like Chelsea did. You couldn't do that now. Though very creative accountancy is no doubt going on.
06 Sep 2020 14:38:30
With you on that Ken. There is some juggling to do with big numbers and timing. No doubt Fosun have the skills to help sort this.
06 Sep 2020 15:03:40
Regarding FFP and it based on income and sales etc . if we hadn't got such a c**p new design for the new shirt we could have a few more quid in the till. Will save my £110 ( home and away shirt) until we get a decent designer!
06 Sep 2020 15:33:57
It's fine not to like it Wozza (I don't especially) but let's at least stay realistic! I highly doubt that previous away shirt sales would even cover Fabios signing on fee! Yes every little helps but I doubt one weird shirt design is going to especially hit the balance sheet! 🤣.
06 Sep 2020 16:24:28
OMR
This has been discussed in depth previously but.
In 2019 we made just over £20m profit.
In 2020 - only the club and its accountants know as results are not made public until October. However as a result of the virus, the lack of an FA cup run and the increase in wages and contract amortisation following the expansion of the squad in 2019/ 20 - the accountants state we spent £90m in the summer of 2019 - offset by the European run and surely an expansion of our commercial revenues as we become an established Prem side the bottom line will probably decline to a small number which ever sign + or - is in front of it.
In 2021 we obviously don't know how we will go on the pitch and what cup runs we will have. We also don't know how long the virus will impact gate revenues. However unless there are major salary uplifts or further major signings profits should be substantially increased from 2019/ 20. Player contract amortisations will have effectively peaked - note contracts are amortised over the life of the first contract but the amortisation is amended and extended if as with Neves he signs a new contract before the old one ends so for example both Neves and Saiss and anyone else no longer on their first contract are actually costing us less than previously. Silva will only cost us his wages plus £7m pa as he signed a 5 year contract costing us £35m. But commercial revenues shouldcontinue to march forwards and player trading profits should be v substantial - Doherry will be £13.5 as he was obviously in the books at zero given his 10 year tenure whilst Cav and so for Example pre player trading profits we should be one knows yet.
06 Sep 2020 16:33:43
Fat finger sorry
Cav and Costa will both be in the books at modest sums but were sold for significant ones. Even Cutrone will contribute if we sell him this year for the same price he was bought at as his contract will have been amortised considerably over the period he was a wolves player.
Consequently as I have said all along meeting the requirements as laid out by ED above in 2020/ 21 will not be difficult.
We cannot spend as we did the past, £90m in 2019/ 20, but given we now have a strong squad surely no one thinks we need to/ are going to. But buying 2 or 3 players in the £15m-20m range is possible. (Selling Doherty covers the contract amortisation in 2020/ 21 for 2 Silvas! )
Growing the revenue base - shirt sales being a v v v small part of that - of course accelerates the process but at the moment FFP is a hindrance but not one to get to carried away with!
06 Sep 2020 17:31:42
Useful post future. Thanks for the input, helps the clarity.
06 Sep 2020 18:16:16
Well explained! Thanks.