Huge losses as football club chases Premier League return

Wolverhampton Wanderers recorded huge losses as the Championship club spent big in its attempt to return to the Premier League.

It lost £23.2m in the 2016-17 season, a £29m reversal on the previous season, as new owners Fosun International went after immediate on-field success.

The football club increased its wage bill by £10m making staff costs 104% of its turnover.

This will have been inflated by payouts to exiting managers, with the team having four different bosses – Kenny Jackett, Walter Zenga, Paul Lambert and Nuno Espirito Santo – during the financial year. The turnover of coaching staff reflected the poor season, with the club finishing 15th despite investment in the playing squad.

However there is much more optimism about the current season with Wolves top of the Championship and well-placed to secure automatic promotion to the Premier League after six seasons outside the top division.

In a statement, the club said: “Since taking ownership of the club, Fosun International have always maintained the view that increased expenditure both on and off the pitch is essential to ensure Wolves are able to compete with other clubs of a similar size and ambition.

“They believe that with sound investment, made with the club’s long-term future at heart, they can realise their ambition for the club to win promotion to the Premier League, where it can enjoy continued growth and sustained success.”

Promoted clubs benefit from a significant increase in revenue, through their share of TV fees and central commercial deals. Last season, Premier League clubs received between £93m and £151m depending on factors including finishing position and the number of times their matches were televised.

Wolves acknowledged “a risk exists in respect of complying with the profit and sustainability regulations” – the financial fair play rules which cap acceptable losses for Football League clubs at £39m over three seasons. Sanctions could include fines, transfer embargoes or point deductions.

The maximum losses allowed are much higher in Premier League seasons, with limits averaging out at up to £35m rather than £13m.

Wolves’ financial performance in the year to May 2017 was also affected by a net reduction of £6.2m in central funding, the result of the ending of parachute payments that follow relegation from the Premier League.