Debate about the increased attractiveness of securing promotion to the Premier League surfaced at last night's Wolves Fans Parliament meeting as members were, in keeping with recent years, given an advanced briefing of the club's latest financial results.
Financial controller Rita Purewal was present to answer questions on her disclosure that Wolves were set to announce a pre-tax loss £1.7m but because the statutory accounts include the large financial 'provision' brought into calculations in the last few seasons, the Club were able to announce figures that would show a final pre-tax profit of £8.5m on the year ending on May 31, 2014. (Please see www.wolves.co.uk/ for the headline story).
Ben Smallman, who felt the club might have done more in the last two transfer windows, quickly asked whether there was now a sense of urgency to return to the top flight given the astonishing new TV deal figures that were announced two days ago.
"The news illustrates the massive difference between being in the Premier League and being in the Championship," Jez told the meeting. "We will have to look at our strategy and think what we can do to improve our chances of promotion without going bankrupt. How much can you spend and be able to deal with that outlay if you still don’t get there? There has to be a semblance of sanity.
"The fact we moved early in January and spent a lot of money on a good young player (Benik Afobe) who has scored three goals in four games to date was almost held against us because we didn’t then pull a rabbit out of the hat on the last day. But the management of the Bakary Sako situation was very important when there could easily have been a different scenario. We could have cashed in on that situation but we didn’t."
Tom Bason asked to what extent the balance sheet, which shows a healthy improvement on last year, was affected by parachute payments. "In the 2013-14 figures, parachute payments were just under £20m but they have fallen quite substantially for the present year," Rita added. "Almost half that value has been wiped out, which is a worry." Secretary Richard Skirrow added: "That’s why it was important to move on big earners who were no longer part of the plans. We were not as successful as we might have been but there was quite a bit of loan activity."
Rita ran through the main highs and lows of the 2013-14 financial year and said everyone at Molineux had been 'pretty shell-shocked' at being relegated for a second consecutive season. "It was a difficult time for all of us," she added, "and a tough year lay ahead on a lot of levels. We undertook a review and created an exceptional one off provision of £27.5m following the relegation. This enabled us to write off those costs which we considered onerous and would not contribute any economic value for the years ahead. However, Kenny Jackett was appointed in the Summer and things started to improve quite rapidly both on the field and financially. We also received an increase in Sky money, following the new Premier League Broadcasting Deal in 2013 of 70%, which trickled through to us in the form of parachute payments." She also spoke of a record-breaking season in League One and the 30,000-plus landmark crowd at the game against Rotherham at Easter.
Parliament chairman Matt Grayson said: "We had a fairly significant restructuring (after landing in Sky Bet League One) with some painful decisions. But it gave us a blank canvas to go forward. And how many clubs would still press the button on a decision to develop a new academy and arena at that sort of time?" Jez added: "During the reshaping, we deliberately brought down the age of the squad."
In answer to a question from Michael Clarke, Rita said that 60 per cent of the club's income was from central funding. The other 40 per cent was split evenly between commercial activity and ticket revenue. Matt said it was important the right balance was struck between attracting as many fans to Molineux as possible and the need to generate substantial income from ticket sales to them.
Jez responded to an enquiry from Dave Benton about player salaries by saying that that level of detail would not appear in the final accounts as it was sensitive information but the financial results would show the wage-bill for the club's staff as a whole.
When Michael Clarke asked if Wolves were cash-stable? Rita replied: "Cashflow is difficult in this business but we do have some in hand. We’re not overdrawn. Going forward, depending how the team does that is, potentially, another story, with the parachute payments stopping."
Steve Phillips asked if more investment was likely on the basis that, Steve Morgan's £30m injection was 'fine - but was made several years ago and doesn’t match the value of the asset required.' Jez answered: "I have a jaundiced view of club accounts. How much is a club worth if you put it on the market? The majority are for sale right now. They require constant funding to keep them afloat. When Sir Jack Hayward was preparing to hand Wolves over there was a queue of one and we all delighted to do that deal. It’s not an asset. It’s a liability. That’s one of the reasons why Sir Jack took the decision he did."
Richard Skirrow added: "The nub of it is that wonderful gift from Sir Jack. He effectively gave the ‘house’ away, in a phenomenal gesture, on condition that £30m was spent on home improvements. The lack of further investment hasn’t handicapped us to date. Richard said that the swift reinvestment of a lot of the transfer revenues raised towards the end of the Summer 2012 transfer window, although obviously to a very disappointing effect - and proceeding with the Academy Arena at Compton Park despite the relegation to League One - showed ‘a continuing ambition from a wealthy owner.’
Jez said the priority was to get back to the Premier League, then 'recharge the finances of the business and stay in there.' "We hope we have a chance of going up this year," he went on. "That’s why we kept Bakary and spent a load of money on Benik Afobe.” The meeting heard that there were a variety of good reasons why some of the other targets had not come to fruition. But Jez denied that Kenny Jackett had felt handicapped in any way in looking for players: “On the contrary,” he said. “He is in line with it.”
The chief executive pointed to the fortunes of clubs like Wigan and Fulham this season as a way of emphasising the difficulties Wolves encountered two years ago. Ben Smallman named Leeds, Southampton and Norwich as other big clubs who had dropped into League One and asked: “Are we ahead of schedule?” Jez replied: “I’ll be really disappointed if we can’t finish in the top six. In my opinion, we should never be below that position in the football hierarchy. I think we are content with progress so far rather than ahead of schedule. We had a dreadful November but if everyone pulls together, we have a chance. Richard Skirrow said the club had looked at what some of those other sides had done and thought that could be matched at Molineux. “But for a terrible November, we would have been in a better position,” he said.
Clive Smith asked Rita whether things had gone as well as they could possibly have gone financially from this time last year and was told: “Yes. The restructuring was paramount and was an important part of our financial planning. We couldn’t carry those costs going forward. We were very competitive with our pricing and made sure we got our fans back on side.”
Greg Asbury suggested that Wolves were not viable in the Sky Bet Championship but was told by Jez: “We want to go up more than we need to go up.” Matt also pointed out that, among the current leading bracket of sides, Bournemouth, Derby, Middlesbrough, Ipswich and Watford were prospering without receiving parachute payments – and that Wolves went up in 2009 as champions when they weren’t receiving them.
Jez said in response to a question from Steve Phillips about selling academy players it was important to have a model that produced good enough players to get to the Premier League and then stay there. He said that the business plan obviously included selling some players, like David Davis, to recoup some money to put back in. He reminded the meeting that Joleon Lescott had also come from the academy and pointed out: “Buying and selling players is a key part of the game. We have a massive net purchase of players under Steve Morgan because of his patronage. We are trying to build a strong base.” The chief executive later told Dave Quarrell that he was still surprised so many owners in the game were criticised by supporters and agreed with Richard Perkins that it was vital the club continued to groom their own young players. “Other clubs can’t believe that we have this many home-grown players in the first team squad,” he said.
Richard Skirrow concluded the financial results part of the meeting by saying that whilst his comments should certainly not be misconstrued, in addition to the figures being a lot better than might have been the case, it had also been an enjoyable 18 months for the club and the supporters.
Wolves Fans' Parliament members have been canvassed for their opinions as discussions continue on setting prices for the 2015 early bird season ticket scheme.
Wednesday night's third meeting of the season extended the debate on where and how the club should pitch the price when they make an announcement in the coming weeks.
Head of Ticketing and Membership Lynne O'Reardon took her usual place on the top table when members met in Molineux's International Suite and said she hoped there could be an element of reward for fans who have been season ticket holders for a considerable period.
Roger Phillips said: "We always get hung up on pricing. A fiver here or a tenner there isn't going to make a big difference. It's things like the weather and moving games to a Friday night that make it less attractive for me to come here."
Michael Clarke agreed that pricing had to be in line with expectations on the pitch claiming there had been some 'unforgiveable mismanagement' in past seasons. He said it would be wrong for the club to look back and praise themselves for the last 18 months.
Parliament chairman Matt Grayson pointed out that the Club had acknowledged mistakes in the past but after being relegated to Sky Bet League One Wolves set about developing, and then implementing a plan, which had seen the Club promoted straight back to the Championship, with a group of young and exciting players. Although many fans say they actually prefer Championship football, the Club’s aim is to win as many games as possible and to try and return to the Premier League as quickly as possible.
Steve Phillips said he had watched Wolves for well over 20 years in this division and wanted to see them more in the Premier League.
Simon Wade addressed the thorny issue of booking fees by proposing: “In the interests of PR, don't mention it. Roll it into the price with a bit of spin....don't mention the words.” Mark Rigby asked where the extra £6 went and Lynne replied: “We have spent 18 months trying to have it called an admin fee. It funds the running of the ticketing department by partly offsetting the actual processing costs and charges that we incur per transaction and, if we remove it, it will go forever.”
Richard Perkins asked whether a cup game could be included in the price of a season ticket as has been the case before but Lynne explained that a certain amount of money had to be assigned to the opposition from ticket sales and the club could easily find themselves sharing money they in effect didn't have. Richard Skirrow said that was one of the reasons the cup idea had been stopped in the past. Richard Perkins also said he was disappointed Wolves fielded shadow teams in the cups.
Simon Wade asked what the time-frame was with early-bird deliberations and was told by Jez that there was a final meeting at the beginning of next week. Steve Phillips suggested a freeze on the price for now and a hike in the summer. Jez said: “That's the premise, that it’s a higher summer cost. Buy your ticket today, lock in at a low Championship price and, who knows, you could be watching us in the Premier League. When we were relegated to League One, we wrote cheques to our season ticket holders giving them a rebate.......we didn't have to.” Greg Asbury said fans needed to be reminded that they can make substantial savings through buying early bird tickets.
Lesley Matile said fans were less sensitive to the price if the team were playing well and Lynne told Chris Bate that the windows that make up the offer were still to be discussed but likely to be a four week window. Dave Benton said he still thought there should be a strong loyalty element with discount offered to long-serving season ticket holders. He argued that supporters needed an incentive to return. Ben Smallman thought that a good idea and Mark Rigby asked what was to stop fans missing a year and thinking they could get their discount the year after. Lynne O’Reardon said the club were looking at opening the promotion to all fans regardless of whether they were existing season ticket holding on news that the fans' survey which, Jez reminded the meeting, had shown that seventy per cent of respondents, from what Lynne confirmed was over 3,000 replies, considered this policy to be right. Matt underlined that retention of season ticket holders was very important but we needed to grow the number as well.
Jez said that, when the club first introduced the early-bird scheme in 2002, the reduction was substantial over the summer prices. “It was supposed to be a special offer....a thank-you for getting supporters locked in early for the following season,” he said. “It's perceived as a different campaign now because supporters are used to it but a majority of supporters attending matches at Molineux benefit significantly over the previous strategy.” Steve Phillips found support from Mark Rigby in saying price was a big factor but Jez said it was by no means the only factor.
Mark Rigby said some wouldn't renew because of all the other promotions on ticket prices. Matt said the club worked hard to make sure those promotions didn't undermine the overall season ticket value. The bottom line, Jez summed up, was that the cheapest way to attend games was still through buying an early-bird season ticket.
Roger Phillips talked about the recent scheme where a season ticket holder could to be accompanied by a friend. The club pointed to the big gate for the special half price offer at the Blackpool game, admittedly partly helped by the Sir Jack tribute, and to how there had been a 4,700 take-up from season ticket holders to take a friend for free to the following Charlton fixture. Steve Galloway said there was a difficulty getting the latter idea to work because you might not have a seat next to you available for a friend. Lesley Matile said she didn't take up the Charlton offer and said she hadn’t received the relevant email from the club – some fans who sit near her hadn’t received it either, although most in the room had. The club now use email as a prime publicity tool, more so than website or programme stories.
In answer to a question from Greg Asbury, Lynne O’Reardon said there was a discount on individual ticket prices for groups of ten and more. She said an extension to the 'Family Four' idea as a season ticket was also being considered.
OTHER ITEMS
Steve Galloway kicked off the lengthy ‘other business’ section of the meeting by congratulating the club on their part in the tributes to Sir Jack. “Unfortunately, we have had too much practice in the last few years,” he said. Mark Rigby suggested there should be a statue of the former owner-chairman and Steve went further by suggesting fans might be asked to put a tenner in – the amount he famously asked Steve Morgan for when handing over control of the club in 2007. Lesley Matile described this as ‘a great idea.’
The club were pleased that the decision to notify supporters outside the stadium as well as inside about a minute’s silence – discussed at the last Parliament meeting following the unfortunate behaviour at the Birmingham game on November 1 – had been well justified by the conduct at the Fulham game.
Michael Clarke was also highly impressed by the Sir Jack tributes and asked whether the images on the video screens could be made permanent. Jez said they couldn't because of contractual arrangements but promised that the club would address the issue of a lasting memorial. In reply to a question from the room, the chief executive said there were no plans to change the name of the stadium. “Molineux is iconic, brilliant,” he said. “Unless my boss tells me differently, we are not going to do it.” Dennis Green was told by Matt Grayson that the book of remembrance was still in the foyer.
Switching to more mundane issues, TVs on the concourse of the Steve Bull Stand were cited as being a problem as they were close to the toilets and made access difficult near the end of live lunchtime games. Steve Sutton is already looking at the matter. Likewise, Dave Quarrell asked whether the Billy Wright Stand could have a clearly marked thoroughfare but was told that was very difficult because of the tight concourses.
Returning back to the transfer window, Dave Benton said a lot of fans did appreciate the club’s stance on the Sako development but suggested many were concerned that the club were lacking in back-up resource. He pointed to there being no back-up striker on the bench in the win at Huddersfield and no replacement for Dave Edwards if he were sidelined for a substantial spell. He said that situation may be the difference between having a real go at promotion this spring and falling just short. He referred to having seen Thomas Ince and Jesse Lingard snapped up by Derby, Ben Watson go to Watford and Nick Powell still kicking his heels. Jez replied: “It's getting more and more complicated. Some of the players we tried to bring in didn't want to come for whatever reason. The Benik Afobe deal took eight weeks before he signed. If you're not going to just throw loads of money at it, it is very, very difficult. He has scored three in four games. We would like to sign three or four more of those types of targets, yes, but that's not a reality. We said we would make an exception for a striker and we did; a player to make a difference but still maintain our policy of keeping that dressing room on-side with everyone else. That is very challenging. The loan window is still open and there's a willingness still to sign someone else who would fit in.”
Matt said the re-signings the club made in January were also important. Lesley Matile proposed that it might be interesting to have a guest speaker at a future meeting to explain the complexities of seeing through a transfer.
Matt apologised to Dave Quarrell for the problems on the results page of the website, especially with the junior sides, but pointed out that the Club’s coverage of the U21’s and U18’s had massively improved this season with coverage of games, player interviews and background content. Jez promised it would be looked at. Dave also said a number of Molineux Mix members had mentioned the distortion problems on the PA system. Jez pointed out that it would cost a lot of money to rectify but the club were aware of it.
Jez had news regarding a stadium improvement by revealing there should be a scoreboard before the end of the season above the boxes in the Steve Bull Stand. It will bear moving messages, such as latest scores and adverts, and will be centred on the half-way line. He said the decision was made as a direct result of the discussions within the Parliament.
Chris Bate likened the present team to the 2009 promotion-winning one but asked whether the club had been trying to do Danny Batth’s contract on the cheap as it seemed to be a drawn-out matter. Matt said the club had to deal with the player’s agent as well as the player and these things take time. And Jez expressed surprise that such a view would be taken. “We try to be as transparent as we can be.” He added that the dressing room contained a group of players who had a harmony. “That spirit was the cornerstone that got us promoted before and kept us in the Premier League twice,” he said. “We will not sign a player who will throw a hand grenade into that and run the risk of destroying that harmony. I'm not going to do that and betray the players who are have committed to us. We know the type we want to sign in terms of age, wages and attitude.”
Mark Rigby asked whether shirts with poppies on the front could go on sale around Remembrance Day next season, with some of the proceeds going to charity. The club said it would be considered but no promises could be made.
Simon Wade enquired about the possibility of cheaper tickets for away fans but was told that clubs, under a Football League rule, couldn't offer seats to away fans cheaper than home fans were paying for comparable facilities. Steve Phillips said ticket revenue becomes less important with greater TV money.
Michael Clarke harked back to Steve Morgan’s encroachment pitch side to speak to the referee at the end of the Bournemouth game in December and asked who was there to stop a repeat. “To get from the directors’ box to have a go at the ref doesn't reflect well, even though every fan would have liked to have done it too,” he said. Jez responded: “Steve doesn't need a babysitter and he won't get one. He wouldn't think kindly about that idea. I didn't know he was down there that day until I saw him. If he leaves his seat, how do anyone know he isn't getting up to go to the toilet? He got punished and we move on. These things happen all the time but I don’t think it will happen again.” Dave Benton reminded the meeting that Steve had gone into the dressing room towards the end of the Mick McCarthy eraand said he hasn’t been in since and doubts he will again.
To a question from Mark Rigby, Matt Grayson said the possibility of using former players in a meet-and-greet role at the museum was being considered. The meeting also heard that the museum attendance at the Sir Jack tribute weekend had been very good, with positive feedback. Jez said the museum was so good that it didn’t need former players to enhance the experience but it could happen on occasions.
Chris Bate asked what the overall club position was in convincing supporters to renew their season tickets and was told by Jez: “The drive from the club is.....well, we can all kid ourselves but special occasions aside, making the on field football better and sustained football success are the most important, as well as doing the marketing things right.” The Chief Executive also urged Parliament members to look at other clubs' accounts to see how Wolves were performing off the field.
Dave Quarrell enquired about the need for administration fees for away tickets and gave Jez the chance to clarify a point he feels he may previously have explained only partially. At a previous meeting, Jez said Wolves made no money out of selling tickets for away games but clarified his comment on Wednesday by saying in keeping with the rules of the Football League the club charges a small commission (5%) but this was balanced by the same amount Wolves had to pay visiting clubs for tickets they sold for matches at Molineux. “It offsets really, we lose money on away tickets sold for Molineux and we gain money for tickets we sell for our away games but, regardless of that we still have to carry out that transaction for on ticket sales for away games and incur the relevant charges,” he said.
Matt concluded the meeting by urging fans to enter April 18 in their diaries – the date of the home game with Ipswich – as that was planned to be the day of the club’s memorial service at St Peter’s Collegiate Church in honour of fans and former players no longer with us.
