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An Analysis of Wolves Football Club

Executive Summary

Clubs often acquire funds through proper management and recording of good results on the field. Wolves is a club which three decades ago was a core pillar in English football with issues relating to bankruptcy being the main reason to its relegation in late 1980s. It was until 2009, when the club got promoted. During the period, the club enjoyed commercial success until its relegation from the Premier league in 2012. Further, it was relegated from the championship to the league one division that led to the commercial loss of the club (Bahn, 2012). When the management instituted a good coach to train players a year after playing in the league one division, the club got promoted. It then played in the championship with the management working closely with corporates to ensure the club is further promoted to the Premier league in the near future.

Introduction

The current world is driven by commerce and advertisements. Most firms try to look for all possible avenues where a large number of people can be reached at a lower cost and within the shortest time possible. For this reason, companies such as Samsung, Guinness and Coca Cola among others hugely invest in advertisements (Bahn, 2012). In most cases, sports offer a better platform to reach billions of people in the shortest time. While many sports are appealing to many people, football is a sport that stands out because more than two Billion people worldwide are fans of the sport (Thomas, 2014). In fact, most advertisement companies prefer using football teams as their tools for running adverts and boosting the sales of their respective products.

The English Premier League is the most viewed League worldwide. Below the premier as well is the league Championship which also enjoys a wider coverage on a global scale. Teams in the English Premier and Championship receive huge money sponsorship deals from companies that need to use the teams as a marketing platform (Thomas, 2014). Sponsors such as Nike and Adidas obtain exclusive rights to design players’ jerseys and boots.

Wolverhampton Wanderers is an English football club commonly referred to as Wolves. The club got relegated from the English Premier League few years ago and currently the club is at the championship league, a lower division to the premier league. The rules of the English Premier League Football Association indicate that only top three teams in the Championship get promoted to the top flight English Premier. Founded in 1877 as St Luke’s Football Club, the club began participating in footballing events in 1889. The team has its home ground located in the city of Wolves specifically the West Midland area. The team is owned by the British National named Steve Morgan with the head coach being Kenny Jacket.

Although, in recent years, the influence of the club English football has been minimal, the team enjoyed immense success in the 1970s with the most memorable moment being in 1972. During this period, the team was finalists in the European Champions cup and two years after the team won the English League cup; the oldest and most coveted competition in English football (Gibbons, 2014). Financial crisis however struck the club after the 70s period forcing the team to be extremely bankrupt and therefore was relegated from top flight Premier league football. The team wears distinctive golden shirts with black shorts as the home kit and all white shirt and short when playing away matches with Molineux Stadium being the club’s home ground (Bahn, 2012).

After experiencing financial struggles in the 1970s and 80s, the club found its ground in late 90s the club got promoted to the top flight football in 2009. During the promotion from championship, the club gained more popularity and sponsorship deals as well as the financial boost from the football association (FA). After enjoying three seasons of top flight league football, the team was later demoted in 2012 back to the championship. The following year saw the team record poor result until it was demoted to league one; a league lowers than the championship. In 2013, with the appointment of Kenny Jackett as the team manager, the team won the league one and was promoted back to the championship. Currently, in the 2014/15 championship season the team is competing to return to the Premiership next year.

The club is owned by Steve Morgan, who operates under the umbrella of Bridgemere Investment Company. He bought the club in 2007 at a fee of 30 million sterling pounds (Bahn, 2012). Upon promotion, the club enjoyed both football and commercial success with profits netting to about 75 million sterling pounds for the years when the period the club operated in the premier league. After relegation to the championship and eventually the league one, in 2012, the team recorded a loss of 33.1 million pounds. The loss was attributed to loss of broadcasting rights and the increased amount of money that was required to pay the players.

After losing Sky sports broadcasting rights, the turnover for broadcasting reduced from 60.1 million sterling pounds to 30 million (Thomas, 2014). The relegation further affected the payment of players’ wages that amounted to a total of 33.1 million pounds (Thomas, 2014). For this reason, the owner opted to seek parachute payments to help the club accommodate the financial demands the club needed. The payments we from the Premier League and the club would be scheduled to continue receiving the payment to help accommodate its bills till the 2016/17 season. The major sponsors for the club are a property company named What House.

In a financial the financial year of 2013/14, the club recorded a loss of 30.5 million sterling pounds (Gibbons, 2014). Similar to the previous year, the loss was still attributed to the high cost of player wages and a tremendous decrease in television fees (Gibbons, 2014). Following the relegation to the league one, the directors were forced conduct an exceptional one-off endowment of 15 million sterling pounds. This happened per player with directors receiving a payment of 491,000 sterling pounds from an initial 1.1 million sterling pounds the previous season (Cowlin, 2013).

The previous financial struggles have seen the club put in place measures to ensure the club can not only pay players, but also avoid operation on losses. For this reason, the club has expanded the current number of sponsors in order to solicit more funds. The promotion from league one after only one year of relegation saw the club attract more sponsors (Thomas, 2014). Initially, the club heavily relied on What House Company, the University of Wolverhampton and Puma Wear Company to fund its operations (Gibbons, 2014). Currently, the club restructured itself and established a conducive environment with accommodating terms of business so that many sponsors would invest in the club.

Current stats indicate that the club has more than ten sponsors. Notable names of companies that run sponsorship programs apart from those initially mentioned as the major sponsors are Economy, Altodigital Corporation, Molson Cools, Audi motors which supplies the entire team with automobiles, Sky Bet, Laslett International Limited, Mauvex Corporation among other companies (Cowlin, 2013). The club also negotiated with sky sports limited; a company contracted by the English Football Association to televise all the English football games so that Sky sports would increase the number of matches televised (Gibbons, 2014).

The club has a Motto, which states that “At Wolves, we are a family. We know who we are and by working as one and playing with passion, we can take our tradition into the future” (Bahn, 2012).  The club uses the online platform to appeal to more sponsors to invest in the club. In order to increase its worldwide reach, the club uses the online platform where fans can sign up and participate in the club’s events as well as enjoying membership privileges and benefits. The tickets for a single match are a low price of 17.5 sterling pounds (Cowlin, 2013). This is because the management tries to put measures to ensure that more fans come to the stadium to support their team through purchasing of tickets.

Regular fans who visit the stadium during home matches have an upper hand and can access privileges such as earning tickets to visit the Wolves Museum. The fan can also be granted free entry to watch free matches when the reserve team plays its matches. Also, the most loyal fans can enter the stadium and watch home matches for paying as little as five sterling pounds (Cowlin, 2013).

With all these measures in place, the management should also consider approaching major worldwide corporates such as Coca-Cola, Samsung and even the AON insurance Companies with lucrative offers to attract them invest in the team (Bahn, 2012). In most cases, these companies invest large sums of money in football and if a number of such companies’ can invest in Wolves, the financial capacity of the team will be greatly boosted. Conversely, an increase in the number of major investors will boost the financial capacity of the club to buy talented and famous players (Gibbons, 2014). These players once bought, increase the team’s popularity and also boost the Jersey sales hence the club will find another avenue to acquire funds to finance its operations. Not only do top players boost Jersey sales, they also bring a new dimension in the playing style and also success. Their presence will automatically guarantee the club with promotion to the Premier League where once promoted will further record huge profit margins.

The Wolves Community Trust is a program run by the club to solicit funds and help conduct community service and charity events. The clubs set aside over 200, 000 sterling pounds on an annual basis to be used in charitable activities both in the UK and all over the World (Bahn, 2012). The club focuses at sponsoring programs to improve the well-being of children especially orphans, disadvantaged and the disabled ones. Major trustees in such programs are Jez Moxey, the Wolverhampton football club CEO, Richard Skirrow, the clubs’ Secretary amongst other key officials of the club (Cowlin, 2013).

The owner of the club has a mandate of ensuring that all costs and expenses required by the club are accounted for. He has the mandate and powers in consultation with key stakeholders of the club in the sacking and appointing team managers and coaches (Gibbons, 2014). The club’s CEO, on the other hand, ensures that there are proper service delivery and all departments of the club coordinate to enhance better service delivery (Cowlin, 2013). The CEO has the mandate to coordinate closely with the CEO and Marketing Manager in the event of strategizing the best way of attracting investors and donors. The club’s secretary ensures that all details and documentation concerning the team are well drafted. The team manager as well has the power to coordinate with the medical staff and ensure players get the best medical services (Cowlin, 2013). He/ she monitors the team’s training and in consultation with the team coaches select players to participate in matches. It is the mandate of the team manager and the coach to recommend to the management the type of players the team needs when the transfer window is open and therefore players can move from one club to the other.

Recommendation

As the club tries to look for ways to increase the amount of funds collected to support its operations, it is essential for the management to evaluate the possibilities of playing pre-season games in countries that have been known to have a good fan base over the years such as Austria and Malta. Visiting the Asian continent and establishment of Commercial Partnerships in the continent would boost not only the popularity of the club but also enhance club merchandise purchases. Such measures require serious consideration because successful football clubs such as Manchester United have enjoyed profitmaking success using such strategy. Although in recent times the fans have aired their concerns about how the club owner spends club funds, it is important for the owner to be transparent to the fans. Since, lack of transparency in terms of expenditure may force the fans to fail attending matches. Such move directly affects clubs’ revenues.

Conclusion

After promotion to Championship, Wolves is currently taking a good step in terms of increasing club’s popularity and also encouraging fans visit the stadium. It is important for the club to use all possible ways to ensure that the club rises to its glory days of the 1970s and 80s in the near future. Commercial success largely depends on the club’s performance in competitions. Buying of top quality players and increased investment to the club could see the club get promotion to the Premier league in the 2015/16 season. Transparent leadership is key in maintaining fans loyalty.

References
  • Bahn, C. (2012, March 26). ASU football’s ‘next level’ comes at a cost: Supporters will be asked to dig deeper into their pockets. Arkansas Business.
  • Cowlin, C. (2013). The official Wolves quiz book 1,000 questions on Wolverhampton Wanderers football club. Luton: Andrews UK.
  • Gibbons, B. (n.d.). Wolves make £30m loss as Premier League cash dries up. Retrieved October 30, 2014.
  • Thomas. (n.d.). Where the Money Goes. Retrieved October 30, 2014.
  • Wolves face financial restrictions after relegation. (n.d.). Retrieved October 30, 2014.

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