Imperative deals right for Swans to get transfer as club juggles the money; THE SWANS.
WHEN is the 26th richest club in the world not the 26th richest club in the world? When it's Swansea City.
As ever, there were many headlines to be made when accountancy experts Deloitte published their football money league earlier this month placing the Swans - the same club bought for PS1 in 2001 so close to sporting and financial ruin - ahead of Italian giants Napoli and close to the kind of earnings made by Inter Milan.
And it prompted a question for some fans. Namely, why a club whose income for the 2014-15 year broke the PS100m barrier for the first time seemed to be so reluctant to spend some of it to bring in the striker the side so desperately and obviously needed? Why, some have asked, are the club quibbling over spending big now when the rewards can be even bigger, given the new Premier League broadcast deal that kicks in next season is set to guarantee even the bottom club a PS100m pay-day? Why? Because it is not that simple. The release of the rich list was a case of bad timing for Swansea's board who had already been under pressure to sort out an uncharacteristic managerial mess and now were being asked questions of the frugalness seemingly on display.
But there are simply not the means nor the money for the club to start splashing cash in a way at odds with the way the club has been run - and been praised along the way - over the past decade.
In its most basic terms, Swansea City remain financially healthy but are not a wealthy club. It is all relative, of course, and the club's most recent accounts (for the year end July 2015) do indeed show a record PS103.9m income.
Yet when it is considered that wages alone are at PS72.9m (PS82.5m including social security and pension costs) it shows that the money isn't disappearing into thin air.
It is a huge number to most people, and yet the nature of the Premier League means it remains in the lower reaches in the top-flight's table of salaries. It is likely to see them between the fifth and seventh-lowest payers, although with not every club having published their accounts for the relevant season it is not possible to yet know for certain.
On top of that, it must be taken into consideration that some numbers are slightly misleading given Swansea have taken the figures over a 14-month period in order to bring their year-end into line with Premier League reporting.
In other words, it includes extra summer months of costs at a time where there is little income due to no fixtures.
Nevertheless, even on a pro-rata basis, the wages have jumped up by around 12 per cent - and therefore at a rate exceeding the increase in turnover which, in going from PS98.7m to PS103.9m, is at around five per cent.
In other words, there isn't a lot to play around with, especially when revenue is so wholly based on broadcasting income.
With a limited stadium capacity and commercial income of PS9.2m welcome but dwarfed by the giants of the elite, few other clubs rely on broadcast as much as Swansea at 81 per cent.
And it is why, in black and white, the accounts spell out the real dangers for even the most carefully-run clubs.
Under 'principal risks and uncertainties' in the report signed by chairman Huw Jenkins, it states: "These have not changed. The major risk continues to be relegation from the Premier League and the adverse effect it would have on liquidity, operational activity and ability to realise future plans."
Future plans very much include talk of expanding or even buying the Liberty Stadium. Again, the report spells out: "Our plans for the expansion of the Liberty Stadium must remain in abeyance until we are able to negotiate a fair deal with the City and County of Swansea which will be in the best interests of the football club and will not lead to an over-commitment of our resources."
With a potential stadium purchase price tag of more than PS20m and the club of the belief there is little point in expanding the stadium unless they own it, the current unclear future suggests there will be little movement on that front yet - and, in turn, no chance of upping match day revenue.
Bearing in mind Newcastle and Sunderland can bring in 30,000 paying more fans than Swansea twice a month, perhaps it's a little more understandable why they have been able to spend so big this month.
Furthermore, regardless of his popularity, Newcastle have a 'sugar daddy' owner that Swansea do not (and which many fans do not appear to want either).
If Mike Ashley wanted to give - or loan - his club money to fund a transfer, he can; without going to the bank and worryingly burdening themselves, Swansea cannot.
It is wrong, though, to suggest Swansea do not have debts. Like every club in the Premier League they owe money and it could alarm those who look at the creditors' column in the club's accounts and see PS65m at the bottom.
Indeed, the report accepts "the group has significant net current liabilities at the balance sheet date" yet it goes on to add, "The directors believe the going concern basis to be appropriate on the basis that... is currently generating suffi-cient profits to fund working capital requirements."
Indeed, they themselves are owed close to PS29m - all part of the flow of transfer funds.
All the costs show why that for the PS100m-plus headlines, putting hands on money to sign a striker is not as straightforward as some would suggest.
The nature of Swansea's cashflow and cash reserves means they have to get recruitment right.
If they fail to do so - as it can easily be argued they did this summer - they do not have the ability to make amends by simply signing new players. It is just too tight - even at the 26th-richest club in football.
Chairman Huw Jenkins has done an incredible job transforming the Swans' fortunes on, and off, the field
Expanding the capacity of the Liberty Stadium figures large in the Swans' planning for the future