Fosun, Wolves and a smiling selfie...
This is a draft from my forthcoming book, ‘Where’s The Money Gone?’ Constructive feedback welcome.
Manchester City’s quicksilver midfielder Sergio Aguero leans back with a huge grin as he takes a selfie, against the background of the club’s gleaming new Academy stadium.
As players warm up on the turf behind him, the then UK Prime Minister David Cameron edges into shot over his left shoulder, beaming like a cheeky photo bomber.
On Aguero’s right side, looking rather more restrained, is China’s President Xi Jinping.
It’s October 23, 2015 and Xi is in town to visit the sprawling Etihad campus which has transformed acres of bedraggled inner city wasteland in East Manchester into prime football real estate.
We’ll be heading there in a later chapter, but it’s important here because Xi’s visit turned out to be the high tide of a brief new heyday in Anglo-Sino relations.
The flow and the ebb of that wave would prove to have profound implications for football clubs across Europe, but nowhere more so than the area around Birmingham.
Although Chinese investors did take a stake in City, they were never outright owners, yet in the West Midlands they snapped up the top four professional clubs - not just West Brom, but our three closest rivals Wolves, Aston Villa, and Birmingham City.
Wolves were taken under the wing of Fosun International, a Shanghai-based conglomerate run by Guo Chuanghang, sometimes described as ‘the Warren Buffet of China’, with interests spanning healthcare, travel, media, insurance and retail.
The club won three league titles in the 1950s, but they’ve also plunged to the depths of English football’s bottom tier, almost going bust in the 1980s when two sides of their dilapidated ground were closed for safety reasons.
Sir Jack Hayward - a Bahamas-based philanthropist who bristled at being called a “tax exile” - rescued the club. He rebuilt the ground, while the team continued to yo yo around the top three divisions, never quite able to hold its own in the top flight for long.
His successor, house builder Steve Morgan was no more successful, leading to the arrival of Shanghai-based Fosun in 2016.
They underwrote promotion to the Prem and a run to the Europa League quarter final in 2020, under the canny management of Nuno Espirito Santo, but success came at a cost.
Fosun wrote off a £126 million loan to the football club in the club’s 2020-21 accounts, and followed that with a loss of £46 million in the 2021-22 season.
It’s a story which speaks to the difficulty of middle-ranking clubs achieving any level of success in English football - and the improbability of maintaining it in a sport with a new found zeal for financial sustainability.
Fosun’s largesse left the club at risk of breaching Profit And Sustainability rules leading to a mass sell off of talent in the summer of 2023. Eleven players left as the financial taps were turned off, including Ruben Neves and Raul Jiminez.
Overall, Wolves raised £80 million in the transfer market, staving off the threat of a points deduction, but raising the spectre of relegation battles to come.
Fans' fears were inflamed when Fosun issued a press release in March 2024 signalling their intention to focus on “sustainable growth businesses, especially those with cash flow and profit growth."
Although the company had just posted a profit of more than 1.38bn Yuan (about £150 million) for the previous financial year, this was set against a mountain of interest-bearing debt totalling more than 21bn Yuan - around £23bn.
Given the club’s record of eating Fosun’s cash, it easy to understand the logic of supporters who felt they were now entering a new, more challenging era. Soothing messages that Wolves remained a “key part” of the company’s portfolio, dutifully relayed through the local press, felt like little more than PR.
Fosun’s money certainly generated success for a time, allowing Wolves to briefly fly high. It remains to be seen whether they’ve created the conditions for a soft landing or an almighty crash.