At the Hawthorns, they chant to cheer on the team and they chant because the noise drowns out the sound of the Doomsday Clock ticking down.
On the pitch, all seems bright and fine: Carlos Corberan has replaced the hapless Steve Bruce and had won nine of his last ten league games before a late defeat at leaders Burnley. From the Championship’s relegation zone, Corberan has bumped West Brom up to the edge of the playoffs. That is the likely ceiling for any of the chasing pack – Burnley and Sheffield United are completing the marathon at the pace of sprinters.
The smell of desperation clogs up the Championship’s top half. They are split into two rough groups: those who are desperate to dine at the top table for the first time since they gold-plated the cutlery and those who are desperate to retake their seat and feast.
For West Brom, the urgency is palpable for good reason. It’s not that their parachute payments end this summer, although that’s true. It’s that this would be the first time in 20 years that the Baggies will neither enjoy that financial comfort blanket nor the cast riches of Premier League broadcasting revenues.
The equation is painfully clear. There will soon be a gap in West Brom’s annual accounts where money used to be. They signed eight players last summer, mostly on free transfers but still on contracts that extend beyond this season. Without the payments on which they have depended, they are reliant upon the investment of the owner to fill the gap. That’s where things get a little messy.
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'He's unified the club': How Michael Carrick has led a quiet revolution at Middlesbrough12 January, 2023“What is important for you all to know is that I have not indebted the Club and intend to keep it on a sustainable footing,” was Lai Guochuan’s promise when, in August 2016, he bought out majority shareholder Jeremy Peace. Lai explained that he had followed West Brom since their 1978 tour of China (citation perhaps needed, given Lai was a toddler at the time) and that the only thing that mattered was the club continuing to thrive. He paid £175m.
West Brom had just enjoyed their sixth straight season of Premier League football, so it’s reasonable to conclude that supporters have long been unconvinced of Lai’s ability to keep the club “thriving”. The model of self-sufficiency to which he publicly aspired is reasonable, but that self-sufficiency relied upon maintaining top-flight status. The squad that gained promotion in 2019-20 needed significant investment. Since that second relegation, the money has run dry.
The relationship between Lai and fans effectively broke down when, in March 2021, two months before West Brom were relegated, he took a £4.95m loan from the club to assist another of his companies, Wisdom Smart Corporation, which was struggling during the pandemic.
That loan was to be repaid by agreement, with an extra £50,000 as interest. The initial payment date, in September 2021, was missed. The second date, 31 December 2022, was missed too. Lai then promised that “the funds will be available to the club during the January 2023 transfer window”. West Brom have not made a signing yet.
By 17 January, Ron Gourlay, the club’s CEO, revealed that there was not a day that went by without him asking for that money to be repaid. He said that he “firmly believed” the money would come back but didn’t know if it would be the next day, week or month. West Brom supporters are angry, and you can see their point.
Instead, West Brom have secured their own loan – £20m from MSD Holdings, the company that Derby County borrowed a roughly similar amount from in August 2020. Xu Ke, the former chief executive who is now the sole director of WBA Group, announced that the loan is secured against all of the Group’s assets and is required to finance the continued business operations of the club.
Although players would presumably be used as saleable assets if the loan cannot be repaid, it places the future of the Hawthorns at some – even if slight – risk. The annual repayment of £5m (plus interest) is roughly 10 per cent of the annual revenue of a Championship club that receives parachute payments. A reminder: West Brom stand to lose theirs this summer.
With Derby going into administration owing money to MSD Holdings (£15m), there is understandable panic that West Brom could follow suit if, like Derby, they are unable to escape to the Premier League via the playoffs. Gourlay rejects that notion – “I don’t believe it will get to that stage” – but then in the same conversation he admitted that “at the end of the day it will be a decision for the owner”.
Lai reportedly rejected an offer to sell the club in 2020, but Gourlay says there have been no approaches in the last 12 months. Are we to assume that, if Lai is borrowing from the club and the club is borrowing to continue to operate, there will be no more investment? And if there’s no more investment, no offers to buy, loans to pay and revenue is about to decrease if they do not gain promotion, what else are supporters supposed to do other than worry?
West Brom, the yo-yo club of the Premier League era, now need promotion more than ever. These may be a defining four months in their history. Nobody wants to think about what happens otherwise. Nobody can stop thinking about it either.
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