Wolves today revealed they have taken a £33 million hit in their accounts, on the back of the collapse of their Premier League dream.
The club was able to restrict operating losses to just under £6m as it suffered a headlong tumble from the Premier League through the Championship and into League One.
But bosses have factored into their accounts a £27.5m write-off on playing staff’s value leaving figures for the year ending in May showing an overall deficit of £33.1m.
A Wolves spokesman said: “It’s a paper loss and we have taken the provision of dealing with it in one year rather than drip-feeding it over several years.”
The numbers drive home the impact of two disastrous campaigns which have left the club in the third tier of English football this season, during which owner Steve Morgan is braced to see further losses.
The latest accounts were revealed to the Fans’ Parliament last night.
Player trading in the disastrous 2012-2013 campaign helped offset the damage.
Wolves began that financial year by selling Steven Fletcher, Matt Jarvis and Michael Kightly, but the purchase of players such as Bakary Sako, Razak Boukari, Tongo Doumbia and Bjorn
Sigurdarson as part of ex-manager Stale Solbakken’s rebuilding reduced the surplus to £5.7m. This column had a near £2m profit the year before.
It was the club’s incomes which took the heaviest hammerings after the Premier League relegation. Turnover for the year crashed from £60.6m to £32.1m because of the loss of its share of the top-flight’s lucrative media deal.
Attendances fell to an average of 21,789 in 2013, down almost 4,000 on the previous season as season ticket sales slumped to 15,350 from more than 18,000 in the Premier League. This removed £2m from Wolves’ revenues while commercial income also fell by £2.8m.
With players’ wages reduced, operating costs were trimmed to £42.8m, from more than £51m, while the player trading showed a near £5m profit.
In a move the club describes as ‘good practice under UK accounting legislation’ it has decided to take the inevitable collapse of value in its playing squad in one fell swoop. This has been calculated at £12.5m loss on the market value itself and a further £15m in contractual liabilities.
A Wolves statement said these ‘paper’ losses were considered ‘essential steps to address the significant negative financial impact of consecutive relegations’.
But plans for the future are pressing ahead with work on the new £8.5m Academy at Compton due to be completed by September next year.