Wolves and Fosun

Or why Gary O'Neil never stood a chance

In this latest draft extract from my forthcoming book ‘Where’s The Money Gone?’ I look at the huge spending behind Wolverhampton Wanderers’ ascent to the Premier League - and why sustaining that success proved almost impossible for its owners Fosun International. In an earlier section, I detail how Fosun’s interest in a West Midlands-based club was stimulated by the HS2 rail project. This was dramatically downsized just as the scale of Fosun’s global debts became problematic. Wolves became a luxury they couldn’t afford. Maybe manager Gary O’ Neil could have done better with defending set pieces, but he was always going to be a fall guy.

On the field, Wolverhampton was, initially at least, a rare Sino success story in English football

A combination of Fosun’s money and the astute management of Nuno Espirito Santo saw the Molineux men win promotion, secure two successive top seven finishes in the Premier League, and reach the Europa League quarter final in 2020.

Success came at a cost which the Chinese company was happy to subsidise, initially at least.

Whereas Albion had briefly established themselves in the Premier League on a ‘break even’ basis, Wolves accounts for 2020-21 revealed they had to write off loans amounting to £126 million.

The spending didn’t stop there as, in common with many of their Premier League rivals, they found financial stability elusive. They lost £46 million in the financial year to 2022, and a further £67 million in the next 12 months, while consolidating a mid table position.

It’s a story which speaks to the difficulty of sustaining serious success in English football without the backing of an oligarch or an oil state.

Wolves proved that with serious cash and a degree of momentum, reaching the top seven or eight in the Premier League is entirely feasible; staying there without deep pockets seems utterly impossible.

Bolton Wanderers, Leeds United, Burnley, Birmingham City, Blackburn Rovers…the lower divisions are flecked with clubs who flew too close to the sun.

Fosun’s largesse didn’t simply leave Wolves with unsustainable overheads; it also put them at risk of breaching the Premier League’s Profit And Sustainability (PSR) rules, which set losses at a maximum to £105 million over three years.

Rivals Everton and Nottingham Forest were both deducted points in the 2023-24 season for breaching the limits.

To head off the risk of a similar penalty, Wolves offloaded their most saleable assets.

Across three transfer windows, they sold £240 worth of talent, culminating in the departures of Max Kilman, Pedro Neto and Daniel Podence in the summer of 2024, weakening a team already in a downward spiral.

Manager Gary O’Neil was the inevitable fall guy, facing dismissal just before Christmas 2024, with Wolves looking Championship bound. He was criticised by fans and analysts alike who pointed to the number of set piece goals conceded, but as a long-term strategy replacing good players with cheaper ones almost always leads to the same outcome.

After Nuno’s progress had gone into reverse, Bruno Lage and Julen Lopetegui had both tried to halt the decline; O’Neil was the just the patsy for a project that was no longer central to the owners’ long term vision.

Fans' relegation fears had already been inflamed when Fosun signalled a refocusing of their portfolio, via a press release in March 2024.

It revealed their decision to concentrate on businesses within their empire that were “sustainable” and “predictable”.

These were defined as “those with cash flow and profit growth”, a description which hardly suited a cash eating football club.

Fosun had just posted a profit of more than 1.38bn Yuan (about £150 million) but this was set against a mountain of interest-bearing debt totalling more than 21bn Yuan - around £23bn.

The money pit that was Wolverhampton Wanderers wasn’t mentioned by name, but the signs were unmissable. Given the club’s accumulated losses, it was clear that they now faced an altogether more stringent regime.

Three months later came the kicker; a massive surge in season ticket prices including a 190% hike for under-14s.

Online protests forced the club into a tactical retreat over children’s rates, but adult season ticket holders still faced a 17% increase - three times the rate of inflation.

The days of Chinese largesse were over.

It may or may not have been coincidental that the original HS2 concept had been gradually scaled back because of ballooning costs. In October 2023, the entire northern leg was axed, leaving only the route from London to Birmingham.

Now the scheme had radically downsized, what motive could Fosun possibly have for underwriting a football club thousands of miles from home at a moment when they needed to cut costs of their global business empire?

Wolverhampton stands as a microcosm of Chinese investment in English football.

It’s a story of unsustainable investment by owners whose primary interest was never the club itself - and which was bound to end in tears once they were forced to shift their priorities (both political and economic) elsewhere.