Wolverhampton Wanders are running away with the Championship. They are currently eleven points clear of the chasing pack. Under former Porto and Valencia coach Nuno Espírito Santo, Wolves have dominated, playing with flair thanks to the likes of Diogo Jota, on loan from Atletico Madrid, and Leo Bontaini, a promising Brazilian loanee from Al Hilal in the big money Saudi Professional League. Both have, so far, scored 12 goals this season.
It is a story that should warm the football purists.
Wolves is an historic club. In 1888 it was one of the football league’s original founding fathers, and during the 1950s it’s fair to say that, with three league championships under its belt, it was considered perhaps one of the best teams in the world. Throw in an iconic kit plus a long period in the doldrums and you’d be hard pressed to find many people – outside of the Hawthorns that is – that would begrudge their return to the big time.
Although it is perhaps not quite as romantic as that sounds.
In fact, the re-birth of Wolves is a very modern story that reflects the new global financial order that now controls the upper echelons of the game.
Wolves turnaround has come about thanks to the 2016 purchase of the club by the vast Chinese conglomerate Fosun International, based in Shanghai. The company invests in a range of businesses from insurance to travel to entertainment to oil. It is considered one of China’s biggest privately owned companies and last year made a record profit of of £1.2billion, and held close to £60 billion of assets.
In that context, the reported £45 million paid by Fosun for Wolves was small change. But the timing, and the nature of its investment, made sense, even though Fosun had shown little interest in football club ownership before.
In 2015 Chinese premier Xi Jingping commissioned a much heralded strategy that set out a plan for Chinese dominance of sport and sport business, especially football. With inducements available for investing in businesses approved by the powerful Chinese government, businesses flocked to buy football clubs both in China and in Europe.
In the CSL this saw an orgy of spending as transfer record after transfer record was broken. The largesse reaching its peak when Shanghai Shenhua signed Carlos Tevez and made him the best paid player in the world. For a year, Tevez didn’t seem that interested and a year later he left for Boca Juniors, calling his time in China “a holiday”. Subsequently, the Chinese authorities placed a 100% luxury tax on expensive foreign signings ending the spending spree .
Football club ownership has followed a remarkably similar path. AC Millan, Inter Milan, Nice, ADO Den Haag, Espanyol and Southampton, to name a few, have been bought by Chinese companies. Others like Manchester City and Altetico Madrid have sold significant stakes to Chinese companies.
But it is in the West Midlands that China has managed to corner the market. West Brom was sold to Yunyi Guokai Sports Development, like Fosun another Chinese investment fund, for around £200 million. Aston Villa was bought by the flamboyant, Twitter-obsessed businessman Tony Xia for £77 million, Birmingham City was bought by Trillion Trophy Asia which is controlled by a Hong Kong businessman Paul Suen. They had bought their stake of the club from Carson Yeung, a former hairdresser who bought Birmingham City, brought them success, relegation and, finally, disgrace after being jailed in Hong Kong for money laundering. He remains in prison to this day.
Fosun’s purchase of Wolves meant Chinese companies owned all the major clubs in and around Britain’s second city. The group’s chairman is Guo Guangchang who according to Forbes was the word’s 226th richest person in 2017 with an estimated fortune of $8.6 billion. He is, like China’s richest man Jack Ma, a self made billionaire. Guo grew up in poverty and won a scholarship to study at university. As China began to open itself up to business entrepreneurship and foreign investment in the 1990s Guo and a few friends set up a company that initially advised foreign companies how and where to invest in China. Eventually, he began raising finance and investing himself, building the biggest company outside of state hands. With that kind of backing Wolves spent big although performances on the pitch didn’t match the investment. In short order Kenny Jackett , Walter Zenga and Paul Lambert were all fired before the hiring of Nuno to take charge of Fosun’s second season in charge of Wolves.
But perhaps the most intriguing aspect of the football revolution taking place at Wolves is the involvement of Jorge Mendes, the super agent who has Cristiano Ronaldo on his books and has become a powerful figure behind the scenes at Molyneux. A string of Portuguese players arrived in the West Midlands represented by Mendes. Many reportedly turning down offers from top four clubs. Nuno, too, is represented by Mendes.
It is of course against league rules to have an agent run your transfer affairs. And Wolves have denied that Mendes has any other role than to advise the club on interesting transfers. Certainly, so far, those transfers have paid handsomely in results.
But Mendes has been at the right place at the right time to take full advantage of Chinese investment in European football. For one, he had worked as an advisor for Fosun to help them diversify into football. Five months before Fosun bought Wolves, a company controlled by Guo Guangchang even invested in the holding company of Gestifute, the agency controlled by Mendes.
The Football League decided that there wasn’t a case to be answered for when it came to Mendes’ potential influence over the club.
But what isn’t in doubt is that Mendes has delivered a stable of players, and a coach, who will likely take Wolves back into the Premier League. From there Fosun has said the will spend whatever it takes not just to stay in the league but to become one of the biggest names in English and world football.
This will be music to Wolves’ fans’ ears. But a word of caution. Several Chinese owned clubs have begun to fall into trouble due to the opaque nature of power and politics in China. Already a brake has been put on foreign investments in sport. The Chinese government suspected that many businesses were using football club ownership to move money out of China. It very nearly scuppered Southampton’s recent Chinese takeover. AC Milan is now in crisis with an owner who may or may not have the money needed to bail them out. The chairman of ADO Den Haag had to be removed from the board for failing to fund the club’s budget adequately.
And then there was the mysterious case of Guo Guangchang’s disappearance. One of Xi Jingping’s key polices has been cracking down on graft and corruption. As a result a series of high profile businessmen have been arrested or spirited away. Some return, some don’t. Critics of Xi say that his crackdown is really aimed at silencing critics and opponents. Still, Guo went missing for a few days in 2015. Fosun suspended trading of their shares. When he eventually resurfaced, all that was said by the company was that Guo was “helping the authorities with their enquiries.” A rumour that the same thing had happened last year was enough to send Fosun’s shares tumbling 10 per cent. It turned out Guo was on a business trip.
And this doesn’t even touch on the issue of Financial Fair Play. Without promotion, Wolves will find it hard to meet the necessary requirements. But promotion does look a virtual certainty now. Wolves’ fans will be hoping the club’s future is decided on the pitch, and not on the shifting political and economic sands in the far east.