🇺🇸 Are Wrexham Making Money? The Answer is No

If you’re reading this email you may have noticed that this is a day late! I published this email for release on May 28th instead of May 27th. A complete mistake on my part.

Alas, a story that has gripped me since it began has been the journey of Rob McElhenny and Ryan Reynolds’ takeover of Wrexham Football Club.

Three years on (yes it’s been three years!), where are they now? And are they making money?

This week, we explore everything they’re doing so far. Some of the answers may surprise you…

This is a table showing Wrexham’s revenue in the last 4 seasons:

• 2020: £1.76m

• 2021: £1.48m

• 2022: £5.97m

• 2023: £10.48m

As you can see, since the takeover Wrexham’s revenue has risen by more almost 600%! It’s amazing to see.

However this is a table which shows the profit and loss for Wrexham in those same years:

• 2020: -£0.44m

• 2021: -£1.18m

• 2022: -£2.91m

• 2023: -£5.11m

Despite revenue being high, their costs are even higher.

They have accumulated losses of more than £8.00m in the last two seasons and the trajectory suggests it will increase in next years accounts too.

This is a worrying signal and begs the question, what the hell are they spending their money on?

Well Wrexham have two significant costs.

In June 2021, Wrexham signed Paul Mullin on a free transfer. Despite paying nothing for him, he reportedly makes a pretty sizeable £4K/week. This is more-than-double the traditional non-league average. 

Shortly after in January 2022, Wrexham bought Ollie Palmer for club record £300k. In the same window, they also spent a reported £225k on Defender Ben Tozer. Tozer reportedly makes £3K/week.

All of these moves show a healthy commitment from Rob and Ryan to spend on players and wages at the club.

The below image is a screenshot of their annual rise in wages in their last two account filings at Companies House. A wage bill of £6.9m is the highest ever for a League 2 club!

Next years accounts will almost certainly see payroll rise again as they pay bonuses and incentives after being promoted to League 1.

But thats not all, wages are not where it ends. The Stadium is next.

Believe it or not, they didn’t own their own stadium when they took over. It was owned by Wrexham Glyndwr University.

Rob and Ryan have since bought the freehold to land after a long battle with the local council. The amount they paid was undisclosed in the press release but on their 2022 company accounts there points to a £2.1m spend on “Freehold and Land Buildings”. It also shows a sizeable jump in spend on “Property Improvements” which explains the upgrades they’re making on the clubs infrastructure.

As you can see, they are committed strongly to improve the conditions at Welsh club.

Alongside their spending, it helps that they make a shitload of money too.

Here is a picture showing the rise in revenue of the club in the last two years.

What’s fascinating is how this compares to their nearest contemporaries. Wrexham just got promoted into League 1 by finishing second in the table. For perspective, here are the revenues of the clubs that finished closest to them at the league:

1. Stockport: £4.80m

2. Wrexham FC: £10.47m

3. Mansfield: £4.13m

4. MK Dons: £6.9m

£10.47m is another League 2 record and should not be understated. It’s a massive amount of money.

Some of you may remember Wrexham got to the 4th Round of the FA Cup last year and lost in a replay to Sheffield United of the Premier League. The increase in the “Football” line on the image above (2022: £531k —> 2023: £1.31m) can largely be attributed to that impressive FA Cup run.

The “Retail” line is simple. Shirt sales and Merchandising!

Thats up significantly (2022: £1.30m —> 2023: £3.43m) because of Welcome to Wrexham, the hit TV show.

Despite the licensing fees not showing on Wrexham’s company accounts Racecourse insiders describe Welcome to Wrexham as the club’s “biggest commercial asset”.

It’s distributed on Disney Plus in the UK and Hulu in the US and it truly is a global smash hit. 

Its enabled Rob and Ryan to help Wrexham build a truly global fanbase. In fact, on their most recent accounts Wrexham showed that 25% of all club revenue has come from outside the UK, which is fascinating considering they are a Welsh club in the 4th tier of English Football. 

The exposure the show brings is huge and heavily contributes to the revenues the club makes.

So with their aggressive spending and their record revenues you are starting to get a picture of their philosophies as owners.

Invest heavily, grow the fanbase and rise through the ranks of the English footballing pyramid as fast as possible.

Next year, their expected revenues may help them go even better.

In the last 6 months they signed lucrative sponsorship deals with:

• STōK Cold Brew Coffee

• American Airlines

Already, reports suggest that Wrexham’s revenue next year will climb to more than £20m. If we pin that to the bottom of the numbers shown earlier it shows a massive year-on-year increase:

• 2020: £1.76m

• 2021: £1.48m

• 2022: £5.97m

• 2023: £10.48m

• 2024: £20.00m

Similarly, in August of 2022, the club submitted the planning application for a new Kop stand at the Racecourse Stadium. The development will add 5,500 seats to the Racecourse Ground, including 5,000 general admission seats and 500 hospitality seats.

The improvements won’t be ready in time for the new season in August but will add a healthy amount to the bottom line once completed and further signals their desire for growth at the club.

There is a healthy smattering of people online saying that Rob and Ryan are in line to sell up having already secured 2 promotions in 3 seasons, but I disagree.

This is a long-term project and all their actions thus far show that this is not a chapter that is even remotely close to closing.

There have been 3 other examples of teams who have risen from the 4th tier of English football and landed at the Premier League. One of those is Brentford, who recently put their club up for sale for £400m!

If Rob and Ryan complete their mission, the £8.9m that is currently owed to them will be a distant afterthought.

To see how Brentford managed it, see this excellent video I made on the exact topic:

See you next Tuesday Monday!