Wolverhampton Wanderers address financial fair play struggles in open letter

After Julen Lopetegui took the club from the bottom of the standings at Christmas to a 13th-placed finish, the Spaniard was expecting to be provided with the funds to try to take Wolves to the next level.

Instead, the Spaniard and the club's supporters have endured a frustrating period in the summer transfer window with a number of high-profile exits only being offset by a reunion with Matt Doherty on a free transfer.

If reports are to be believed, Wolves had plans to sign Borussia Monchengladbach centre-back Nico Elvedi, West Ham United left-back Aaron Cresswell and Bristol City midfielder Alex Scott, allegedly for fees totalling in the region of £35m.

However, as it stands, all three deals appear to be off the table with Wolves needing to improve their FFP situation before they can consider any more additions.

That is despite Thursday's sale of Matija Sarkic to Millwall taking the funds generated during the off-season to in excess of £90m, as well as the wage bill being substantially lowered.

Nevertheless, in a lengthy statement on the club's official website, Shi has acknowledged that there will be minimal further arrivals before the end of August, insisting that Wolves already have the majority of a squad in place to compete in England's top flight.

Shi said: "As the owners and management of the club, one important thing we must learn and follow is the Premier League's rules on profit and sustainability (formerly called financial fair play or abbreviated to FFP). Before the end of 2023/24 season there will be an annual test and we are going to make sure we pass it, as we have done in the last five seasons.

"FFP sets a profit and loss limit for three rolling years, with a loss of £105m the threshold. We were very comfortable on FFP during the years just after promotion and before the covid pandemic, because of a relatively low wage bill, low-cost signings from the Championship and relatively stronger finishes in the league and Europe.

"After a longer stay in the Premier League, we are now at a stage where we must pay even closer attention to FFP and manage it well. The first reason is the inevitable impact of covid on our revenue. Though we've put those years behind us, we still needed to invest more afterwards to fill the gaps caused by the pandemic, especially on squad strengthening.

"Secondly, we once had a fantastic squad, built in the Championship then brought into the Premier League. However, after the ageing of some players and unexpected injuries, that squad had to be evolved year by year with a significantly increasing wage bill and player acquisition costs in the best, but also most expensive, league in the world.

"Finally, in recent years we have made a lot of long-term investments into young talent that may not play for our first-team immediately, and those investments increase our asset value in the balance sheet but impact our profit and loss, especially in a net investment phase.

"An additional factor to consider in our FFP management is that last January we invested much more highly in the first-team than we had anticipated, bringing in six players. It was a very unusual winter window for us, and it literally advanced the investment room originally left for this summer.

"The positive thing is that FFP is based on a rolling number, season by season, so if we do manage it well this summer, next summer we will be more free financially."

While Wolves' incomings have been limited, squad numbers have been boosted by the presence of Fabio Silva and Sasa Kalajdzic, who were unavailable last season.

Silva spent loan spells at Anderlecht and PSV Eindhoven, while Kalajdzic spent the season on the sidelines with a serious knee injury.

If Wolves are able to conduct any business later in the summer, it will likely involve acquiring a new centre-back with Max Kilman, Craig Dawson and Toti Gomes the only available players in that position.