Glenn Moore: Wolves trust in financial sanity to stay up – QPR opt for financial fantasy

The Weekend Dossier

Saturday 04 February 2012 01:00 GMT

Wolves’ good housekeeping has made life difficult on the pitch for manager Mick McCarthy

At Loftus Road today, QPR will be strengthened by four new players costing more than £11m. Opponents Wolves, three points and three places below them, have two new recruits, both loanees.

It is a contrasting approach to fighting relegation, not least because Wolves, without a win in nine matches, look in greater need of fresh blood than anyone, but it reflects distinct ownership models. QPR are the latest "trophy club", a walking billboard in Asia for Tony Fernandes' airline interests and an exciting diversion for the entrepreneur whose tweeting suggests he relishes involvement in the high-profile Premier League.

Wolves' owner was in the news this week after entering the dressing room to criticise the players' surrender to Liverpool, but Steve Morgan usually keeps a lower profile. The builder invested £30m when buying Wolves from Sir Jack Hayward (a condition of Hayward writing off his £70m input) but has since run the club as a business.

Very successful it has been too, in financial terms. In 2009-10 (the last available figures) Wolves were one of the very few Premier League clubs to make a pre-tax profit, £9m. They turned over £61m and had a wage bill of £30m. Even more remarkably, Wolves have cash in the bank and are thus financing the new £16m Stan Cullis Stand, which will take capacity to 31,000, entirely from reserves. Further expansion is planned but, according to Jez Moxey, the chief executive officer, it has been put on hold while the club concentrates on youth development with "a major expansion" of the training ground to "create a world-class academy".

The future may look old gold, but what about the current team which languishes in the relegation zone? Moxey said the club "have invested heavily in buying new players, especially so since gaining promotion". Wolves have indeed spent around £40m in three seasons, half of it on Kevin Doyle, Steven Fletcher and, last summer, Roger Johnson. Savings are made more on wages than transfers – most recruits come from the Championship. In January, added Moxey, "we bought a player with potential (Eggart Jonsson), secured the loan of an impact player (Emmanuel Frimpong) and a 'premium' player (Sebastien Bassong). We hope this is sufficient to maintain our place in the Premier League."

And if not? Moxey stresses Wolves are not contemplating relegation but is confident "the club is robust enough to deal with every eventuality". Certainly, given parachute payments (£48m over four seasons), and the club's careful budgeting, relegation is unlikely to prove disastrous.

It could, however, be a problem for their opponents. QPR's 2009-10 figures are less impressive. They reveal £34m debt and a wage bill of 120 per cent of turnover. They were a mid-table Championship side then, now they have a Premier League TV income, but gates, constrained by the small capacity of Loftus Road, remain below 20,000 while the wage bill has mushroomed since the arrival of Joey Barton and company. Between them Neil Warnock and Mark Hughes spent more than £20m this season bringing in 15 players. While supporters are excited by the new signings, many fear the club is over-reaching itself – and there is little re-sale value on Bobby Zamora, 31, and Djibril Cisse, 30.

Phil Beard, the chief executive, dismissed these fears. "There is a fundamental difference in ourselves and clubs like Wolves," he said. "We are new to the Premier League, to stay up we have had to invest in the squad. The owners are very committed. We are seeking to build a new training ground, and in the long term a new stadium in the local area. To do that we need to stabilise our position in the Premier League."

Beard intimated that any increased debt is being covered by the owners, but this appears to be in the form of loans, not equity. What if they were to pull out? QPR have had a series of owners in recent years and some had to take on a loan – using the ground as collateral – to pay off their predecessors, a process which was then repeated. Beard said the club no longer has outside debts and stressed: "I see nothing other than 100 per cent commitment from Tony Fernandes and the Mittal family to invest in the short, medium and long term." Relegation, he added, would not change that. "We would re-group and try and get back in."

Someone has to go down, however, and as clubs run as differently as Portsmouth, Nottingham Forest, Charlton and Leeds have found, the consequences can be severe.

"We should all talk more about the need for financial profitability in the game," said Moxey. "How can a club prosper if it doesn't create profits to reinvest in its players, staff and infrastructure for fans? Not every club has sovereign or oligarch wealth behind them, and as the banks tighten their grip on lending money to football, clubs must wake up and embrace financial sanity rather than maintain financial fantasy – otherwise they risk their existence. Ask Portsmouth fans what they think of their excessive spending in the Premier League.

"One of the big problems is that due to the financial inequality that exists, and the apparent need to stay in the Premier League at all costs – a mindset of many owners fuelled by pressure from fans and media alike – clubs keep spending money they may not have."

A good point, well made, but how many clubs are listening?

Five Asides

1 John Terry's situation is similar to Chris Huhne's

Whatever action the Football Association took over John Terry it would have been criticised, but a personal belief is that the FA has got it right. Terry is rightly regarded as innocent until proved guilty, but the England captaincy is a symbolic post and a man under a racism charge cannot fulfil the role. There is a similarity to the position Chris Huhne is in. Having been charged with a crime he has stepped down from the cabinet, but remains an MP. Likewise Terry remains eligible for national selection, but not leadership.

2 Bradley shows integrity in face of Egyptian horror

Most foreign coaches currently working in Egypt might feel inclined to head for the airport after the violent deaths at a match in Port Said, or at the very least keep a low profile, but national coach Bob Bradley is made of stern stuff. The American joined the protest march in Cairo on Thursday which developed into a riot.

Bradley said: “When a tragedy like this occurs, I think it's important to show respect. To see so many young people lose their lives is something that is a terrible, terrible thing and something that's very sad for everyone that's living in Egypt.” With the Egyptian FA fired by its government yesterday, Bradley's future is unclear, but there's no doubting his courage and integrity.

3 A video nasty we should all be given a chance to watch

The organisation that administrates Premier League referees, is to send a 'how to tackle' DVD to clubs with examples of what constitutes a red card offence, what is a yellow, and what is permissable. They should also distribute it to the media, TV commentators, and to supporters via YouTube. It will not stop the arguments, but they will be better informed ones.

4 Fifa's actions don't match Blatter's words on ethics

Fifa this week appointed Horace Burrell to its Olympic Committee. Three weeks ago the Jamaican completed a six-month ban (three months suspended) for “unethical behaviour” in the votes-for-bribes scandal. Fifa president Sepp Blatter keeps making speeches vowing to fight corruption, but actions speak louder than words.

5 Big freeze adds weight to summer football argument

Youth football matches will be cancelled across England today due to frozen pitches, and the few that do go ahead will not be much fun, for players or parents, nor much use in developing footballers. The argument for summer football, pioneered in Durham and to be allowed under the FA's recently produced proposals for youth football, is compelling on weekends like these.

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Glenn Moore's verdict on all the weekend action

Arsenal v Blackburn

Odds Home 2-7; Draw 9-2, Away 10-1.

Kick-off Today, 1pm (Highlights BBC 1, 10.20pm)

Team news Alex Oxlade-Chamberlain will undergo checks on a knee concern for Arsenal, while Kieran Gibbs (groin) has returned to training. Gervinho remains in Africa. Blackburn are without Chris Samba and the suspended Yakubu, but Bradley Orr and Marcus Olsson are in contention to make their debuts.

Norwich v Bolton

Odds Home 11-10; Draw 12-5, Away 13-5.