Wrexham have been given a huge boost in their attempts to grow the club both on and off the pitch after plans for a new Kop Stand were approved by the Borough Council.
Wrexham fans are divided over the new Kop Stand plans but there is no denying that the approval from the council is a huge positive for the club and another milestone towards their growing ambition
Rob McElhenney’s ultimate goal of reaching the Premier League is going to need more than just results on the pitch going their way, something that Phil Parkinson’s side is doing at the moment sitting third in League One.
Michael Williamson plans to improve the club’s infrastructure in a bid to attract better quality players and as per The Mirror, Wrexham’s latest investment can only further add to the excitement around North Wales.
READ MORE: Humphrey Ker left baffled by what some Wrexham fans have been saying this season
Wrexham’s new investment a positive in terms of PSR according to finance expert
Wrexham Insider spoke to TBR’s Adam Williams, head of Football Finance and Governance Content, for some information regarding what the investment means for Wrexham moving forward.
The finance expert believes that the cash injection is from the Allyn family and will be used to front the cost of the new Kop Stand.
Williams explained: “When the new stand was announced, Wrexham’s owners said they still hadn’t secured funding. I suspect that the cash injection, which is almost certainly from the Allyn family, will be ringfenced for that as opposed to operating costs.
“Generally speaking, besides related-party sponsorship deals and debt write-offs, there are two ways an owner can put money into a football club: equity investment or loans. This investment is via equity, which means the club itself doesn’t have to pay anything in return for the money.
“That’s positive for Wrexham because it means they can realise the benefit of the new stand without paying interest costs. That’s quite rare with infrastructure costs. Investment in infrastructure is exempt from PSR in the construction phase but once a new facility is operational, any outstanding interest costs would be deducted from PSR.
“That’s a long-winded way of saying that this funding for the new stand via equity investment is all upside for Wrexham – there is no negative in terms of PSR.”
Wrexham could still need to borrow to fund new Kop Stand
The £14m recent investment may not be enough to cover the whole cost of the new stand and Williams believes the club may have to borrow given that their £25m government grant is to used around the infrastructure of the stand.
Williams explained: “That said, we don’t know how much the stand will cost. It could be that this will be just one source of funding, with debt taken on as well.
“Incidentally, the £25m in government grant they received will be earmarked for improving the infrastructure around the ground and not for the new stand itself.”
Wrexham fans have long bemoaned the facilities around the Racecourse Ground but the government funding will mean that the ambition shown on the pitch will soon be mirrored to the experience off it.
What financial benefits Wrexham can expect from the new Kop Stand
Of course the new stand will provide much more than a nicer aesthetic appeal to the historic stadium, it will expand the capacity by a further 3000 supporters than the current temporary stand.
Wages and transfer fees are going to increase as Wrexham progress up the football pyramid and Williams has explained the benefits of this new construction.
Williams states: “In terms of how beneficial the new stand will be financially, we can use a pro-rata calculation based on their existing capacity and matchday income as a starting point.
“They made £3.1m in 2022-23, which is the last financial year for which the accounts are available. That will have increased in 2023-24 and will do so again in 2025-26. Let’s say conservatively say matchday income is about £4m currently.
“The new stand will accommodate 5,500, which is about 3,000 more than the new temporary stand, so capacity after the development will be about 16,500. So revenue through the turnstiles would be about £5m when the project is complete on that basis.
“But in reality, the figure will be far higher. As well as being able to justify increased general admission prices.”
How Wrexham’s owners status can increase the club’s revenue
The interest in the club has gained huge momentum since the takeover by Ryan Reynolds and Rob McElhenney in 2021, expanded through the documentary series ‘Welcome to Wrexham’.
The hype and interest surrounding the famous owners could also be another factor in how the club plans to generate more revenue in order to ultimately attract better signings and win more football matches.
Williams explained: “There will be new hospitality facilities. That is where the real money will be made – from VIPs.
“Some of the bigger clubs are now making as much through hospitality as they do through general admission. That doesn’t apply to most EFL clubs, but I think the star-power of the owners and the international commercial appeal of Wrexham makes them an exception.
“They’re projecting that the stand will be complete in time for 2026-27. There will have been some general inflation by that time on top of inflation in ticket prices. If they are in the Championship in that season, I’d expect them to earn maybe £10m per season at the expanded ground. In the Premier League, the sky is the limit.”