Transfer deadline day was only a few hours old when the inevitable hashtag started doing the rounds on Twitter.
West Bromwich Albion fans, frustrated by their club’s struggles to add to last season’s promotion-winning squad but unable to say as much during matches at The Hawthorns thanks to the ongoing pandemic restrictions, instead turned to #LaiOut as their means of protest.
Advertisement
Sadly for all concerned with a club locked in a state of semi-paralysis under the ownership of absentee landlord Guochuan Lai, that hashtag is the online equivalent of howling at the moon.
Supporters have grown weary of an owner whose personality, motivation and overall strategy remain as much a mystery now as it did four years ago, when he bought a majority stake in Albion from Jeremy Peace.
Staff at The Hawthorns and the training ground see and hear little from the 46-year-old billionaire businessman and the former eco-town developer is as much an enigma to most of them as he is to the public.
Lai — who said he was attracted by the club’s “rich history, community focus and dedicated fanbase” — seems to have little reason to retain his stake in West Brom, apart from the very real issues concerned with finding a buyer.
For a while now, football finance specialists have indicated the club are on the lookout for fresh investment. With the flood of Far East cash that brought Lai to Albion, Fosun to Wolves and the disastrous Tony Xia to Aston Villa giving way to a new wave of investors from America and elsewhere, brokers have been offering to make the necessary introductions between Lai and interested parties.
However, The Athletic understands Albion and Lai have not actively pursued new investment. Yet, with his initial business plan going in the shredder long ago and no sign of the Chinese government reigniting its interest in the Premier League, it is also clear the owner would be delighted to enter talks with a new potential partner or even a possible successor.
The trouble is, nobody at The Hawthorns believes that is likely to happen.
Lai is thought to have paid Peace between £190 million and £200 million for West Bromwich Albion Holdings, the company which owns 88 per cent of Albion’s stock. By common consent in football circles, Peace did well to get what he did. Certainly, the company is worth considerably less now and was worth less for most of the years before Lai moved in. In simple terms, Peace cashed in near the very peak of their financial value and, even then, Lai might have overpaid.
Advertisement
Now, as detailed by The Athletic last summer, Lai is stuck with an asset worth significantly less than he paid for it and is unlikely to offer sale terms that would make new investment attractive.
Then there is the wider football landscape to consider.
Dozens of football clubs across England are nominally “for sale”, but precious few are changing hands. This year, only Wigan Athletic and Macclesfield Town have been sold and they share the unwanted stigma of having gone bust first, a process that shed huge amounts of debt and placed them in the hands of willing sellers — court-appointed insolvency practitioners.
The Athletic has been told by football deal-makers the lack of movement in the market is due in part to the uncertainty caused by COVID-19 but also by unrealistic expectations from existing owners about valuations.
Plenty of owners want to offload their clubs. Almost none are willing to lower their asking price to realistic levels. This is especially true of owners from the Far East, for whom selling at a significant loss brings with it a badge of dishonour in a regional business culture that places great store in the idea of saving or losing face.
Just in the Premier League, both Burnley and Southampton — another Chinese-owned club — are in talks with potential buyers who are struggling to raise the required funds, while The Athletic understands both Crystal Palace and West Ham United would also be open to offers, however much the two clubs might play down the suggestion.
Chelsea and Manchester United have at least held conversations with potential investors in the last 18 months. Leeds United owner Andrea Radrizzani would also listen to a proposition, Mike Ashley at Newcastle United has made little secret of his desire to get out of football while offers at Tottenham Hotspur have always been tacitly encouraged.
So, with around half the Premier League on the market to a lesser or greater extent, the problem facing West Brom and Lai is clear. Their increasingly fraught union shows no sign of ending any time soon.
What that means at The Hawthorns is ‘more of the same’, which, while largely uninspiring, is far from calamitous.
Albion fans need only look a few miles across the West Midlands to see a club, Villa, who were taken to the brink of oblivion by the overreaching of Xia before a further takeover two years ago brought them a brighter future. Elsewhere locally, the outlook at Birmingham City has been far more chaotic, while Wolves appear to have landed the best of the region’s many Chinese takeovers.
Advertisement
The Lai reign has been, for the most part, somewhat underwhelming. Club staff close to the takeover talks in 2016 speak of a prospective buyer with honourable intentions and a business plan — eco-towns in China with Albion and Premier League branding — that made some sense, but none of Lai’s ambitious proposals have come to fruition.
Lai made clear he had no intention of ploughing his personal wealth into West Brom. There were hopes, though, that his plans might help the club boost their revenue streams. None of it ever happened.
When Mark Jenkins was brought back by Lai for a second spell as chief executive in 2018, he criticised the need to arrange a bank overdraft due to what he saw as overspending in his two years away. The fact, though, that the overdraft went unused thanks to Jenkins righting the ship in a matter of months shows Albion’s financial worries were trifling compared to those of some rivals.
Still, though, this summer has shone a light on the limitations of an owner with neither the money to compete fully in the spiralling Premier League arms race nor the means or conditions to cut and run. Without a benefactor owner and with financial restrictions aplenty, the £97 million headline figure for the broadcast revenue of a year-one Premier League club was quickly whittled away.
The Athletic understand around £10 million went on players’ promotion bonuses and another £10 million in additional, promotion-related payments from last summer’s transfers. The Premier League withheld £10 million from the three promoted clubs due to COVID-19 budget cuts and around another £15 million has so far been allocated by Albion’s accountants to allow for the currently indefinite absence of turnstile and season-ticket revenue.
With a Premier League wage bill of roughly £55 million, precious little was left for squad strengthening.
Sporting director Luke Dowling and head coach Slaven Bilic are giving sporting alchemy their best shot with a budget for this window of around £30 million but, with most of the funds spent on buying former loanees Matheus Pereira and Grady Diangana, Albion will attack the Premier League over the coming months with a starting XI largely similar to the one that ended the Championship season triumphantly in July.
Advertisement
A £3.8million loan from the football club to Peace’s holding company remained on the books when Lai completed the takeover and now stands at approaching £4.5 million because of interest. There is little obvious prospect of the debt being repaid and, while the figure is small in the context of vast Premier League wealth, in this most unusual of summers that amount of money might have covered loan fees and wages for one or two useful players.
With cash at a premium, Dowling and Bilic have had their hands tied, sometimes with differing views but essentially both victims of the same frustrating circumstances. The next eight months seem destined to be long, testing and full of angst.
The hashtag is here to stay. But so, for better or worse, is Albion’s stranded owner.
(Top Photo: Matthew Ashton – AMA/West Bromwich Albion FC via Getty Images)