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The Story Of Wrexham AFC: From Administration To A Hollywood takeover

welcome to hollywood stampWrexham AFC is a football club with a rich history. One that has many stories to tell. As third oldest professional football club, Wrexham plays at the Racecourse Ground, the oldest international stadium still in use.

The club has survived going into administration, point deduction, owners who were only in it to maximise gain from the club’s assets and the loss of stadium ownership. Fans were there every step of the way and rallied to keep their club alive.

The latest chapter in Wrexham AFC’s history is the unexpected takeover of the club by Hollywood stars Ryan Reynolds and Rob McElhenney in 2021. Two people with little previous football knowledge or experience, who took a calculated gamble. Time will tell whether the club fares better under their leadership than under previous ones.

So far, the signs are optimistic and have given fans hope. The pair went all in, with a solid business plan and the appointment of knowledgeable people. They have created a buzz around the club, not least with their documentary Welcome to Wrexham, that could ignite the club’s progress and maybe propel them to the ultimate destination: the Premier League.

We look at the ups and downs, financially and business, of Wrexham AFC over the last two decades. Especially the Racecourse Ground has been at the centre of many of the battles the club, fans and (previous) owners have faced. How did the club lose the ownership of the ground and what is the situation now? And how are Reynolds and McElhenney faring after taking over?

First Signs Of Off-Field Trouble For Wrexham AFC

wrexham performance history chart by season

After a reasonably steady tenure of over two decades under Pryce Griffiths, Wrexham got acquired by Alex Hamilton and Mark Guterman in 2002. Hamilton paid a reported £50,000 for 78 percent of the club to Griffiths. Fans were left in the dark about Hamilton’s involvement, as Guterman fronted the takeover. It would be the start of mixed results on the field after relegation in 2002. Wrexham won immediate promotion back to the third tier the following season but got relegated again two seasons later.

Off the field the situation was not mixed, but only problematic. As it would later be revealed in an uncovered written statement, Hamilton and Guterman’s only objective of buying Wrexham was to profit from the club’s property assets. First by gaining control of the Racecourse Ground and then by using the area for property development.

To accomplish this, Hamilton and Guterman approached Marston’s Brewery, owner of the Racecourse Ground freehold at the time, to buy it off them for £300,000. In June of 2002 they did, with the ownership of the ground immediately transferred to Hamilton’s company Crucialmove. A year later, Hamilton paid a reported £300,000 to cancel a 125-year lease the club had on the ground. Paving the way for their original plan.

Going Into Administration

administrationBy 2004, Guterman had withdrawn from involvement, and Hamilton was the sole decision maker. The property developer wanted the club booted from the Racecourse Ground in his bid to make a profit from the property. With the club several millions in debt, Hamilton no longer wanted to put money into it. Yet, when fans proposed a buy-out, he rejected the offer.

By December 2004, the financial position of the club had become so dire, with debts of around £4.5 million and late salary payments, that Wrexham AFC went into administration. A business consequence that likely saved the club in the long run. It did mean that the English Football League (EFL) imposed a ten-point deduction. Marking the first time the EFL took such measures, but not the last.

With Derby County the latest EFL club affected during the 2021/2022 season. They received a 21-point deduction – first 12 and later a further nine – for going into administration as well. Demonstrating that Wrexham’s financial troubles are not unique, and that it is not easy to run a financially healthy club in the lower English leagues.

After going into administration, administrators disputed that the transfer of the Racecourse Ground to Hamilton’s company had been unlawful. As the transfer was only completed for the owners to eventually obtain maximum gain from the assets, it was not in the best interest of the club. In 2005, a judge agreed and ruled for immediate return of ownership to Wrexham. Further appeals by Hamilton had no effect.

New Ownership, New Name

relegation battleIn 2005, North Wales car dealer Neville Dickens and business partner Geoff Moss emerged as buyers. With Hamilton still holding a 78 percent stake in the club and the club being in administration, it was not an easy deal to pull off. But in June of 2006, Dickens and Moss took over the reins with the backing of fans.

At the time, Wrexham was £3.8 million in debt. After 18 months, the club was able to exit administration.

Since the club had gone into administration, Wrexham AFC officially no longer existed when Dickens and Moss took over. Wrexham Football Club (2006) Ltd became in charge. A phoenix company taking control over the assets of the club and so the club was officially called Wrexham FC, instead of Wrexham AFC.

In July 2008, Moss acquired Dickens’ 50 percent share in Wrexham, giving him the controlling interest. Moss’ idea was to turn the car park into student flats and to reinvest the profits into the club. However, on-field success did not materialise. The club even got relegated from the Football League to the National League in 2008.

In a bid to tackle mounting debts, the ownership of the Racecourse Ground was transferred to Wrexham Village Ltd, a firm owned by Moss.

Wrexham Becomes Supporter-Owned

timeline of wrexham afc

By 2010, Moss put the club up for sale. With no buyer on hand, the club faced new problems when a bond of £250,000 was needed to play in the 2011/2012 National League. It was the fans who rallied and raised over £100,000 to safe their club.

It would be the start of more fan involvement as the club announced in November 2011 that the Wrexham Supporters Trust (WST) had struck a deal with Moss to take over. With the WST paying £433,990 for goodwill when taking over. The business of Wrexham Football Club was transferred to Wrexham AFC Limited, a subsidiary of the WST. Thereby officially rebranding the club to its original name.

With half a million pounds in debt and operating losses of £750,000 per season, it was a difficult task for the WST. Yet, they were able to turn the tide and become debt free. The club even posted a surplus of £11,587 during the 2014/2015 season.

Hollywood Stars Reynolds & McElhenney Buy Wrexham

ryan reynoldsIn the years that followed, Wrexham did not regress, but made little progress as well. A status quo that was changed when Hollywood stars Ryan Reynolds and Rob McElhenney started their search to buy a football club and set their sights on Wrexham AFC.

Inner Circle Sports, previously involved in deals to buy Liverpool, Crystal Palace, and Portsmouth, played a part in brokering the deal. For the deal to go through, a majority of the WST’s members needed to approve the sale. An extraordinary ballot saw over 91 percent of the members vote, with more than 1,800 members in favour.

In February 2021, the sale was finalised. The 1,247,484 outstanding Wrexham AFC Limited ordinary shares at £1 each were transferred to the R.R. McReynolds Company, LLC. A company equally owned by Reynolds and McElhenney. The pair paid nothing up front for the shares but agreed to invest £2 million into the club and its infrastructure. The total number of shares allocated to Reynolds and McElhenney after takeover was therefore 3,247,484 at £1 each.

Business Plan Aiming For Sustainable Growth

football player outline made from trees against barren backgroundFrom the outside it seems like Reynolds and McElhenney are truly in it for the long run and for the right reasons. The Hollywood pair’s strategic decisions so far underline a slow and steady approach that must lead to sustainable growth. They appointed Phil Parkinson as manager. A man with experience in all three EFL-tiers and who has led his teams to promotion three times.

They hired a new CEO and strategic advisor and introduced ex-Southampton vice-chair and FA technical advisor Les Reed to the board. Organisational changes that should create the basis for long term success.

The goal of the new Wrexham owners, as stated in the club’s mission statement, is

“to grow the team, return it to the EFL in front of increased attendances at an improved stadium while making a positive difference to the wider community in Wrexham”.

And so far, the owners have implemented changes and policies to achieve this.

Invest In Players, Staff, And Facilities

return on investment roi illustrationReturning the club to the EFL is no easy feat though, given that the team has been playing in the National League since the 2008/2009 season. To realise this, Reynolds and McElhenney want to provide full financial backing to the coaching staff.

In addition, they aim to implement a sustainable model that will attract the best players and staff. With plans of investing in a permanent, EFL quality training facility, they also look at the long term.

Apart from appointing knowledgeable people in technical and business positions, the club has also been able to attract value-adding players on longer contracts. It is common in the lower tiers of English football that players are contracted on short-term (often one year) contracts. They are often brought in on a free transfer.

However, in January 2022 the club spent a record £300,000 on Ollie Palmer. The attacker transferred from Wimbledon and signed a three-and-a-half-year deal.

In the summer of 2021, the club already surprised by landing another attacker, Paul Mullin. Mullin won promotion to League One (the third tier) with Cambridge United in 2020/2021 and won the golden boot by scoring 32 goals. As a top scorer he could have played in League Two or maybe even League One, but instead Mullin chose to play in the National League with Wrexham.

A sure catch for the club, as Mullin scored 26 times during the 2021/2022 league season. It made him win the golden boot and player of the season, but it was not enough to earn promotion to the EFL.

Longer Contracts, But More Expensive?

man holding contract and clock

Investing in the right players is difficult, whether it concerns free transfers in the National League or the millions Premier League clubs pay. Wrexham’s incoming attackers have provided an on-field return. By agreeing longer running contracts, the club has created a form of stability and continuity. It is now less likely that these players are gone after one season, especially when doing well. And if they do, the club will get financial compensation that can be reinvested.

It is just one way to implement a structure that is sustainable in the long run.

However, with a reported salary of £4,000 per week for Mullin and £3,000 per week for central defenders Aaron Hayden and Ben Tozer the club is paying heavily for National League-standards. With the average weekly wage in the league estimated to be between £1,000 and £1,500. This strategy may result in faster on-field success by attracting better players but could undermine the sustainable approach if promotion is not achieved.

EFL Quality Training Facility

efl logoHaving an EFL quality training facility is another facet that can contribute to success in the long run. However, this also requires an investment and one that could go into the millions.

Wrexham AFC trained at Colliers Park training ground since it opened in 1997. With the facility costing a reported £750,000 to build. In 2011, the grounds were sold to Wrexham Glyndwr University with the club leasing it. However, by 2016 the club could no longer afford the annual cost and returned to its former location Stansty Park. In the meantime, the university collaborated with the Football Association of Wales (FAW) to develop a £4 million state-of-the-art facility that opened in 2019.

Reynolds and McElhenney now want to establish “a permanent training facility that is worthy of an EFL club”. Indicating that they want their own location.

In case they do not want to take over existing facilities, they will have to make a substantial investment. Championship club Burnley, for example, invested £10.6 million in their Barnfield Training Centre in 2017. Although the club yo-yoes between the Premier League and Championship, it is an indication of the amounts spent by clubs at the top of the EFL. A place Wrexham ultimately wants to find themselves as well.

Increased Retail Sales, But Not Enough To Offset Losses

wrexham profit and loss chart

Wrexham has a long way to go before reaching those heights and to be able to make those kinds of investments. The latest Annual Report and Financial Statements for the year ending 30 June 2021, reported a loss of £1.177 million during the fiscal year. A £437,000 increase compared to the previous year (£740,327).

A stark contrast to the 2019 fiscal year, when the club posted a profit of £755,587 after tax. A healthy number that was boosted by transfer income with the total amount of transfer fees and prize money being £1,671,826.

The 2021 account covers five months under the ownership of Reynolds and McElhenney. Turnover during that period was £1.478 million. A £279,000 reduction compared to the £1.757 million Wrexham made the previous 12 months. A major factor being that the club had to play behind closed doors, due to COVID-19. Missing out on gate receipts and matchday commercial income would have reduced turnover by around £1.1 to £1.3 million.

In 2019, gate receipts amounted to £1,122,799, while matchday commercial income was £167,075. During the 2018 fiscal year, the club made £942,617 in gate receipts and £186,965 in matchday commercial income.

wrexham turnover chart

Positive was that the club saw an increase in retail sales of £252,000. Probably due to the new owners’ marketing efforts leading to more exposure. It offset the losses somewhat.

The Directors’ Report for the year ending 30 June 2021, notes that they expect turnover in fiscal year 2022 to be a “more accurate reflection of the financial potential of the Club, in the National League”.

In addition, the accounts will then also reflect the owners’ enhanced commercial activities. As during the 2021 fiscal year, WST’ commercial agreements were still in place.

Wrexham AFC Owns The Racecourse Ground Again

The vital part the Racecourse Ground plays in the club’s history and income potential is not overlooked by the new owners. In their mission statement, Reynolds and McElhenney guarantee that the club “cannot be relocated, renamed, or rebranded”.

However, the Racecourse Ground did not belong to the club when they first became owners. The freehold was still owned by Wrexham Glyndwr University after they bought it (and training ground Colliers Park) in 2011, to safeguard the property for the club and (sports) community at large. The WST could not buy it back, but was able to secure a 99-year lease in 2016 as a next-best option with a reported rent of £100,000 per year.

In June 2022, the club was finally able to buy back the Racecourse Ground after agreeing terms with Glyndwr University in February. It is the first time the club owns the Racecourse Ground since August 2011. A club survey prior to purchase showed that 94 percent of respondents were happy to see the freehold owned by the club.

The purchase does include a covenant to ensure the club remains at the ground until at least 2115. Unless a move away is needed as the club outgrows the ground.

Ground to Become UEFA’s Category 4 Compliant

UEFAThe owners are adamant that they do not want to move the club to a different location, but to grow and prepare the club for the next decades they believe aspects of the ground need to be improved. In addition, they want to bring international football back to the stadium.

In line with their brand message that it is the oldest international stadium still in use. To do so, the club needs to comply with UEFA’s Category 4 stadium rules.

A first step to do so, is to bring the Kop back in use, and thus returning the ground to a four-sided stadium. In August of 2022, the club submitted the planning application for the new Kop stand. The development will add 5,500 seats to the Racecourse Ground, including 5,000 general admission seats and 500 hospitality seats.

There will also be an exhibition space for up to 600 attendees and other hospitality lounges that can be used on both match and non-matchdays. This will ensure that the club does not only comply with UEFA’s Category 4 criteria but can also obtain revenue from non-football related activities.

The current capacity of the Racecourse Ground is around 10,500. The adjustments will increase total capacity by around 50 percent to 15,500 (500 existing seats are expected to be lost due to UEFA facilities).

The WST already secured an investment commitment from the Welsh government for developments to the Racecourse Ground during their ownership period.

Further Investments Needed To Cover Expenditure

football increasing piles of moneyIn July 2022, Wrexham announced that The RR McReynolds Company LLC had provided a further £1.2 million of equity by means of a new share issue. This brought the total number of ordinary shares, owned by Reynolds and McElhenney to 4,447,484 at £1 each.

In addition, the pair provided loans amounting to £3.67 million to cover expenditures related to the purchase of the freehold of the Racecourse Ground and stadium improvements.

During the fiscal year 2021, the club already spent over £182,000 on property improvements.

Number Of Shares Outstanding

When Number of shares Change
Before February 9, 2021 1,247,484 at £1 per share Shares owned by Wrexham Supporters Trust
From February 9,2021 until June 30, 2022 3,247,484 at £1 per share + 2 million shares

Reynolds and McElhenney take over Wrexham AFC for £2 million. Amount is directly invested into the club.

After June 30, 2022 4,447,484 at £1 per share + 1.2 million shares

Reynolds and McElhenney provide a further £1.2 million of equity through issuing new shares.

The Club’s Role In The Community

wrexham shown on map

The importance of the football club and the Racecourse Ground to the wider community is also highlighted by the pair. The way the WST and fans have rallied for the club in the past makes this a cornerstone of the club and its strategy. One way this is acknowledged is by including fans and representatives of the WST in an honorary board.

In addition, Reynolds and McElhenney want to recognise and reinforce Wrexham AFC’s leading role for community good. To show the work undertaken by the club, they rebranded the Racecourse Community Foundation to the Wrexham AFC Community Trust in May 2022.

While keeping the community spirit intact, the pair does want to use their resources and influence to grow the club’s exposure and generate global appeal. With the documentary Welcome to Wrexham, they have set the first steps in achieving this.

Documentary Welcome To Wrexham

welcome to wrexhamIn the documentary, Reynolds and McElhenney are followed during their first moments at the club. Other people around the club, fans, players, and staff, are also featured.

By increasing global exposure with the two-season documentary, the expectation was that this would also lead to more interest in merchandise. Which was indeed the case. The first numbers upon release of Welcome to Wrexham even outperformed “the most optimistic projections”.

In the four weeks following the release of the documentary, Wrexham saw a 19.2 percent increase across its social media channels. They expect the number of followers to reach over one million by the conclusion of the first season.

During that time 185,289 new visitors ordered for £290,170 across 3,543 orders. Together with the sales from the club’s shop, there was a total of £360,000 in sales. Almost five times the £59,674 the club made during the same period the year before. Whether this positive impact on merchandise sales is lasting will have to be seen of course.

Welcome to Wrexham Documentary Influence On Retail Sales

Four weeks post release Same period previous year
Retail sales £360,000 £59,674

First Obstacles: Application To Stream Matches Declined

streaming football on a mobileTo profit from the increased visibility the documentary would generate for both the club and the league, Wrexham raised the question of streaming the National League games for all clubs. As it would be financially beneficial to clubs and would provide the league with the platform to market the competition and thereby increasing revenue.

However, in September the National League declined the application of Wrexham to stream games to domestic and international fans. The same month they announced their ambition to deliver a centralised streaming solution for the second half of the season.

The club hoped they could at least stream the matches in the first half of the season. They even offered to donate any profit for the League to distribute. As the club is not after (immediate) financial gain but wants to grow their fanbase on the back of the documentary. The other clubs and league would benefit from this as well, according to the club. However, the National League together with BT, who owns the rights, rejected this.

Obviously, the league would like to keep control of the streaming rights, but according to Wrexham the decision limits the potential of growing the league and the clubs, while they should be promoting it.

It is just one of many obstacles Reynolds and McElhenney will likely face in the years to come, especially if the club secures promotion. The two seem determined to make their Hollywood story a success.

On the back of the documentary, it would not be surprising if many football fans will root for Wrexham AFC in the coming years. At least Reynolds and McElhenney have promised fans that when they leave the club, it will be in a better position than when they started their adventure.

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