An agitated head coach early in pre-season never bodes well but it has been easy to understand Julen Lopetegui’s frustration as Wolves stumble from a suboptimal plan A to failing to execute their plan B.
Nine days out from opening their new season away to Manchester United, the former Spain head coach is pondering whether to walk away from Molineux because he is not convinced a squad that has been gutted because of the club’s need to satisfy financial fair play rules is capable of competing.
Lopetegui has seen 10 players, headlined by Ruben Neves but also including Adama Traore and veteran Joao Moutinho, head for the exit, with Matt Doherty the only notable addition having re-signed as a free agent following struggles at Tottenham and Atletico Madrid.
A deal to acquire Aaron Cresswell from West Ham has stalled and a move for Bristol City’s highly-rated Alex Scott has broken down because the Championship club are looking for £25m for their biggest asset, a sum considered too large by Wolves’ bean counters.
“We went to a plan B, trying to think about cost-effective players, but we can’t develop this plan, too. We lost a lot of players and we think the club want to sell more players,” Lopetegui said last month.
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“It’s a pity because you are thinking at any moment key players can come and, in the end, they don’t for different reasons. We were excited by this new plan, but now we don’t have this plan because we don’t have any new players.”
The club’s explanation is straightforward - they must turn a profit this year to avoid being punished for FFP breaches - but has fuelled wider speculation around whether Chinese owners Fosun have a seven-year itch and are looking to sell up. That was firmly denied by chairman Jeff Shi in an open letter to supporters on Thursday evening that primarily underlined the FFP issue.
First Shi pointed to Covid-19’s “inevitable impact” which meant the club “needed to invest more afterwards to fill the gaps caused by the pandemic.” Another factor, he said, was “the ageing of some players and unexpected injuries” led to “a significantly increasing wage bill and player acquisition costs.”
Julen Lopetegui is considering his future at Wolves (Getty Images)But among those acquisitions has been “a lot of long-term investments into young talent that may not play for our first-team immediately, and those investments increase our asset value in the balance sheet but impact our profit and loss, especially in a net investment phase.”
Yet Shi went on to describe last season’s winter window, in which six players arrived, as “very unusual” and impacted what was left to spend this summer.
Clubs must not lose more than £105m over three seasons and recent estimates indicate that Wolves need to make a profit of around £10m this season. Their most recent financial accounts, taking into account the 2021-22 season, showed losses of £45m and they are forecasted to have lost up to £70m last season.
Shi, attempting to be optimistic, said that “if we do manage it well this summer, next summer we will be more free financially” but the gamble is that the financial consequences of relegation are far more grave.
Ruben Neves moved to Saudi Arabia in a £47m deal. (Getty Images)Yet deep within the open letter was a veiled message to Lopetegui, who “has undoubtedly done an excellent job”: make do with what you have. “In my experience, the performance on the pitch is not only defined by simple additions of players, but by team spirit, chemistry, momentum, morale, leadership, tactics, training, hard work and a variety of other factors,” Shi wrote.
But what the letter failed to mention was the owners’ continued domestic problems. Last autumn the Chinese state told banks to check their exposure to Fosun because the conglomerate was struggling to get a grip on post-pandemic losses, largely linked to property investments, and its share price had plummeted by not far off 20%.
A streamlining has taken place and founder Guo Guangchang has described 2022 as a “perfect storm”, adding in March, that their assets have “fully recovered.” S&P Global have since improved their rating from “negative” to “stable”, prompting a rise in share price in Hong Kong.
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Wolves are one small part of their straining empire and they are already seeking buyers for Swiss club Grasshoppers. Talks were held earlier this year over a sale of Thomas Cook, the travel agency purchased in 2020 by Fosun’s tourism wing, while industry experts say the have been contemplating dealing Club Med, the chain of luxury resorts.
Shi said that "Fosun remains committed to Wolves and has never had any plans to sell the club. The club is a long-term project and an important one for Fosun" but it is clear that their FFP battle is a micro problem that must be contextualised around the parent company's macro issues.
Not that Lopetegui’s mood will improve should he remain and work with a squad that scored a league-low 31 last season, has lost its talisman in Neves and seen three other attackers exit without being replaced
Fans concerned by the financial realities, shallow squad and the potential of losing a sharp-minded head coach have not been soothed by the club’s decision to raise ticket prices either, making the mood one of dread in the Black Country.
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