Fosun on collision course with £100m Wolves blow after Jeff Shi announcement
Wolves’ ownership could be hit with a £100million blow to the club’s valuation if they are relegated to the Championship.
That is according to football finance expert Dr Dan Plumley who has exclusively told Football Insider that Wolves could face financial hits in the short-term after Premier League relegation.
Wolves’ 2-0 defeat to Brentford leaves the Old Gold 16 points adrift at the bottom of the Premier League table and on the verge of a return to the second tier.
Jeff Shi has been sacked as Wolves chairman, but the supporters want the club to be sold amid protests at matches this season.
Wolves ‘more likely want to sell as a Premier League club’
Speaking exclusively to Football Insider, Plumley has explained the impact of relegation for Wolves amid calls for the club to be sold.
“Well, I mean, look, ultimately, owners have their own motives for reasons why they stay involved or not, which we will never know,” Plumley said.
“But I think if you look at the numbers here from what we do know, there’s very little doubt from a financial perspective that relegation from the Premier League reduces the overall valuation in the club, certainly in the short-term.
“That’s because revenue is a key component of any valuation. We know that your revenue will drop by £60m ballpark following relegation, which is the difference between TV money and a first-year parachute payment.
“Now assuming some players also perhaps get sold if you get relegated, and some commercial deals might have contract clauses in them where they carry a lower value in the Championship versus the Premier League, plus the overall lower exposure of the Championship again in relation to the Premier League.
“It’s not inconceivable that any valuation for Wolves, whatever it is as a Premier League club, you might take around £100m off that valuation by dropping down into the league below. So there’s certainly enough evidence out there to suggest that relegation means a drop in valuation.
“And, of course, then if you are looking to sell, you would more likely want to sell as a Premier League club because you’re realising higher value.“
Wolves planning for Championship return
Relegation to the Championship could also change Wolves’ recruitment strategy, with a greater focus on bringing through academy players.
Wolves will not rely on Jorge Mendes and his agency for players, with manager Rob Edwards likely to recruit with a view to the Championship in the January transfer window.
The club will also be faced with player departures, with Joao Gomes linked with a January move to Man United.