Official Meeting Minutes
Wolves Fans Parliament members were again the first supporters to hear details of the club’s latest balance sheet when Chief Financial Officer Rita Purewal attended last night’s meeting in the International Lounge at Molineux.
Members were briefed on accounts which show a pre-tax profit of £0.7m for the Championship season ending May 2015, compared to the previous season’s profit of £8.4m in League One.
Rita started by explaining the main movements, compared to the previous season, with the significant factor being the shortfall in turnover by more than £6m to £26.4m. This was largely down to the £8.9m drop in Premier League parachute payments being partly offset by increased gate revenue, commercial income and central league distributions which were typical of the Club operating in a higher league, compared to the previous League one season. After additional costs, again associated with Championship trading, the Club ended up with a pre tax profit which was £7.7m lower than last year. However, Rita mentioned that, similar to the previous year, the Club benefited from the release of an onerous player contract provision of £6.7m relating to a one off restructuring exercise carried out back in 2012/13. Without this release, the actual financial results would have been a loss of £5.9m.
Despite this, Rita emphasised that the Balance Sheet remained strong with net assets of £49m and that this figure was undervalued as it was not a true reflection of the ‘actual worth’ of some of our players who had progressed through the Academy, such as Danny Batth, Carl Ikeme and Dominic Iorfa, and are valued at nil, under accounting standards, as there were no transfer fees paid. On the same note as the Academy, she mentioned that the Club had invested £10m in the opening of the new Wolves Academy and Arena in November ’14 and continued to hold Category 1 Academy status under the Premier League’s Elite Player Performance Plan which helped develop and nurture the talent prevalent in some of the Academy players mentioned.
She concluded by reminding everyone of the constantly changing financial landscape that clubs are operating within and how challenging this is. However, with fresh investment, this could change dramatically and emphasised the “importance of the fans to stand behind the club during tough times and share the same vision and beliefs we have.”
In response to some of the key points raised, it was mentioned that home league attendances for the club’s first season back in the Sky Bet Championship had risen by more than 1,500 to 22,423 but Ben Smallman asked what the average crowd might need to be next season to ensure losses weren’t made, given that the trend was for gates to fall. Chief executive Jez Moxey replied: “There are all sorts of different revenue streams. We’re concerned about attendances, of course, but that’s just one element. They are important but not the only thing.”
Tony Grocott enquired as to who sat on the committee negotiating the Sky deal, which he felt was in some ways losing the club money. Jez said:
“The facility fee that gets paid (for the live screening of a match) doesn’t always cover the loss of revenue on tickets but there’s a central payment we receive from Sky that is much greater and runs into millions. The Football League negotiates the TV contract.”
Secretary Richard Skirrow was also present and said: “Without the Sky deal, clubs would be in all sort of turmoil.” He said it was the individual, chosen ‘live’ games that were the problem because attendances tended to drop for those.
From the floor, Steve Page asked whether Wolves were looking at the financial position of the clubs they were competing with to see if there was any insight as to what they were finding. Jez responded: “Of course – all the time. A lot of clubs spend a lot more than they can afford.”
Steve said that was ‘absolutely borne out’ by the detailed research he had done, which showed that Wolves had been among the most sensible when it came to the proportion of money generated that was spent on wages. Parliament chairman Matt Grayson said: “Clubs are throwing stupid money at it and some are under transfer embargoes. Russell Slade, at Cardiff, didn’t want to let Joe Mason go ....it can work for you as well as against you.” Steve added: “A lot of clubs are not being run as businesses and, if that’s the competitive landscape, it gives an idea as to how difficult it is.” Jez intervened: “I need to remind everyone that when Steve Morgan came in, he said Wolves was not going to be an open-cheque-book club but would try to be self-sufficient.”
To a question from Steve Page about whether that set a limit on expectations, Jez said: “We have spent three successive seasons in the Premier League, then we got into that tail-spin before being promoted as League One champions and setting records. We should have got into the play-offs last season and have since been beset by injuries. What I’m doing is running the club based on what the shareholder wants me to do. We’re trying to be smarter than other clubs. We’re outperforming some of them and they are spending so much more than we are."
Steve Page agreed: “That’s the reality of what we’re trying to do.” Richard Skirrow said Burnley and Brighton were having good seasons on smaller budgets while Fulham and QPR were having difficulties despite having spent big. He said there was always that unpredictability in the game of unfancied clubs doing well. Jez also said he would find it awkward to face fans and have to explain if ever the club were placed under a transfer embargo for breaching Financial Fair Play rules as some clubs had been.
Reflecting on the figures, Greg Asbury said Wolves were a well-run, conservative club. Steve Phillips suggested the sale of Benik Afobe was possibly a case of bridging the gap but Jez countered: “We didn’t do that to fund any losses.”
Richard Perkins asked how the club got the message of its policies across to the masses because some fans were ‘up in arms.’ Matt Grayson said Jez and Kevin Thelwell (head of football development and recruitment) had spoken to the media just before this Parliament meeting and stories were fed out across various platforms. “No other club has a chief executive sat in front of the fans, come rain or shine, every two months.” Jez said there were moves afoot to order clubs to meet their fans twice a year. “So many clubs are copying what we do in engaging with you through the Parliament,” he said. “I don’t think we can be much more transparent than we are. You’re never going to be able to get to everyone. It saddens me when supporters accuse us of shrouding things with spin or lying to them....it’s poppycock, rubbish. I think the more we try to give you, the more difficult it becomes but I sleep at night knowing we do our very best. Without the fans, we have nothing. You will be here long after us.”
* Jez Moxey preceded the debate by expressing the club’s condolences after hearing of the death yesterday of long-time Bolton chairman Phil Gartside, at the age of 63.