The financial losses suffered by clubs chasing the Premier League dream are enough to make even a superhero such as Deadpool weep.
Sheffield United posted a club-record deficit of £31.4million ($39.1m at the current exchange rate) for the 2022-23 season that brought them promotion back to the top flight as Championship runners-up. Burnley, the title winners in that second-tier season, lost £27.9m over the same 12-month period.
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Food for thought, you’d imagine, when Ryan Reynolds and Rob McElhenney next meet up in Wrexham, following this week’s clinching of a second promotion in as many seasons, taking the north Wales club into League One — one division down from the Championship.
That rapid rise from the fifth to the third tier of the English league system is only part of the pair’s impact in Wrexham, as an expected balance sheet of £20million-plus for the current season will show when the club’s 2023-24 accounts are published some time next spring. They’ve also infused the town with a hope and sense of pride that had been eroded following the closure of traditional local industries such as the coal mines and steelworks.
What nobody truly knows, though, is just how far up the football pyramid their Hollywood-star owners can take a club whose highest-ever league finish in their 159-year history is a relatively modest 15th in the second tier in 1978-79.
The ambition is there.
Reynolds made that much clear before a televised FA Cup fourth-round tie against Sheffield United in January 2023. “In 10 years’ time, the plan has and always will be the Premier League,” said the 47-year-old Canadian, who plays the title character in the Deadpool comic-book movie franchise.
Fifteen months on, that dream is two steps closer to being realised than it was at the time, thanks to back-to-back promotions under manager Phil Parkinson. A year from now, it might be one step away — UK bookmaker SkyBet having already made Wrexham 5-2 favourites to secure a third promotion in a row, despite nobody yet knowing which 23 clubs will be with them in League One next season.
But, as those eye-watering financial losses suffered by the clubs who won automatic promotion from the Championship last season underline, if the top flight is to be the club’s destiny, then it is more than likely going to cost a lot of money. And by “a lot”, we mean a lot more than surely Reynolds and McElhenney initially envisaged committing to a project that was always tied to the making of a documentary series about it, Welcome To Wrexham.
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The pair paid £2million to buy the club from the supporters’ trust in February 2021. Significant further investment has followed, both in the playing squad to help return Wrexham to the EFL, a level they had last played at in 2005, and on bigger expenses, such as purchasing the freehold to the club’s Racecourse Ground stadium from Wrexham Glyndwr University.
Much of this has come in the form of loans. The latest available accounts, also for 2022-23, show Wrexham owe £8.977million to RR McReynolds Company LLC (up from £3.714m the previous year). An interest rate of three per cent over the Bank of England base rate (currently 5.25 per cent) is charged on these loans, meaning Wrexham paid £413,789 in interest during that last financial year (around £8,000 per week).
Just what happens to these loans in the future remains to be seen. But their presence on the balance sheet shows that as brilliantly transformative as this period has been for a previously struggling provincial football club and its surrounding area, this is still a business.
Which is why what is happening in the Championship right now is so interesting when viewed through a Wrexham prism.
Such is the arms race behind the push for the vast riches of the Premier League that it wasn’t just Sheffield United and Burnley who incurred huge losses in 2022-23.
Hull City, for instance, lost £21million when finishing only 15th out of the division’s 24 clubs, while Queens Park Rangers (£20.3m), West Bromwich Albion (£11m) and Millwall (£13.7m) all posted substantial deficits despite also finishing outside the play-offs.
The previous year brought a similarly grim tale with finance experts Deloitte putting the combined losses for the Championship’s clubs at £361million. Or, to break that down, an average of £15m each.
Reynolds and McElhenney, writer and star of sitcom It’s Always Sunny In Philadelphia, have developed an emotional bond with Wrexham. They are also committed to sticking around to push the club further and further. But how best to do that without opening themselves up to the sort of financial losses that litter the Championship?
The answer, it seems, lies in selling off minority shareholdings to individuals or groups willing to take a chance on this current upward trajectory being maintained. All the while ensuring the two actors remain the public face(s) of the club.
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Reynolds, in particular, has done very well financially out of adopting a similar approach in the business world.
Having launched the Aviation Gin brand through his company Maximum Effort, he sold out to the Diageo empire in a $610million deal in 2020. Despite that, he remains very closely linked to the drinks company in the eyes of the public via various commercials and social media content.
Similarly, in March 2023, Mint Mobile, the budget wireless group part-owned by Reynolds, was sold to industry giant T-Mobile for a cash and stocks deal valued at up to $1.35billion. He remained in an ambassador’s role.
Neither Reynolds nor McElhenney has any intention of selling up completely at Wrexham. But by releasing minority shareholdings the pair could well be on to a winner, especially at a club facing further expensive infrastructure projects, such as a new training ground and continued stadium redevelopment including a new Kop stand.
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And when it comes to Wrexham, finding willing investors shouldn’t be too difficult.
The Emmy-award winning documentary series about the club has brought such a global spotlight that Google recently proclaimed Wrexham to be more popular in the United States than every team in its domestic top-flight Major League Soccer (MLS), except for footballing megastar Lionel Messi’s Inter Miami.
Then there’s the cachet of joining two genuine Hollywood A-listers in a project that, according to those working on the inside, such as Wrexham’s executive director Humphrey Ker, is “fun” as well as fulfilling.
This process is already underway, according to a line in the strategic report to accompany the club’s accounts for the year ended June 30, 2023. It reads: “The shareholders will continue to consider offering minority equity positions to strategic partners who have unique capabilities to drive progress, having brought in the first minority shareholder since the year end.”
No details are given as to the identity of that mystery individual or group. Nor do we know how much was paid for the five per cent shareholding (RR McReynolds Company LLC is now listed as having a 95 per cent share in Wrexham Holdings LLC, whereas previously it was 100 per cent).
But Reynolds and McElhenney seem to have a strategy in place to ensure Wrexham keep progressing under their ownership, even when costs inevitably increase the closer the Premier League becomes.
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Wrexham are a good story, yes, but they are no footballing fairytale
(Top photo: Alberto E. Rodriguez/Getty Images)