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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 £1 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 £100m 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 £100m pay-day?

(Image: Action Images / Henry Browne)

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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 careful approach 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 £103.9m income.

Swansea City's income v wages Deloitte (year end July 2015)

Yet when it is considered that wages alone are at £72.9m (£82.5m 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% – and therefore at a rate exceeding the increase in turnover which, in going from £98.7m to £103.9m, is at around 5%.

Income growth v Wage bill increase Deloitte

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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 £9.2m welcome but dwarfed by the giants of the elite, few other clubs rely on broadcast as much as Swansea at 81%.

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.”

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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 £20m 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 fans more than Swansea twice a month, perhaps it’s a little more understandable why they have been able to spend so big this month.

Stadium capacities Liberty Stadium 20,050 St James' Park 52,405 Stadium of Light 49,000

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 £65m 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 sufficient profits to fund working capital requirements.”

(Image: Getty)

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Indeed, they themselves are owed close to £29m – all part of the flow of transfer funds.

Furthermore, the figure takes into account £30m of owed transfer fees, agent fees and signing on fees – promised payments over the course of contracts, all planned for and manageable, especially when signing-on fees can be negotiated down or even written off should a player leave. In other words they are payments that are already budgeted for against known future incomes.

There is a £15m overdraft that is essentially a way of easing cash flow in-between Premier League payments which come in three large chunks.

Indeed, it is understood that one month on from these accounts the same overdraft had all been cleared because of the new season payment. In other words, the £65m figure is a red herring. Debt does exist but it is there to allow manoeuvres rather than to maintain the club’s day-to-day existence.

There is also an £8m loan against the income of a chunk of Wilfried Bony’s transfer with his £25m-plus move made in staggered payments – proof that there is not a huge chunk of Manchester City money burning holes in pockets after the Ivorian’s sale.

Sales like Bony’s have been a huge factor in Swansea remaining profitable during their time in the Premier League. This year’s profit of £1.1m is the smallest made since promotion and perhaps that is no surprise in that a player was not sold last summer.

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To say that Swansea have moved beyond being a selling club is untrue, it is just they are not doing so to stave off troubles but to help fund further transfers (and the wages involved).

Even when transfer fees are not involved – as in the case with Bafetimbi Gomis and Andre Ayew – large wages and signing on fees are used, with a potential £19m owed (accounted for in the creditor figures mentioned), but only if the players remain with the club.

The profits made have seen directors recommend dividends – a controversial issue amongst fans – and £1m was again split between shareholders, although the accounts state no further payment for the period would follow.

However, those profits made during the club’s stay in the top-flight since 2011 have gone into spending, those wage bill increases and – most significantly – the two training grounds at Landore and Fairwood, the costs on which thought to have exceeded £15m.

The former, with a 3G indoor barn now able to be seen on the drive to the Liberty, is perhaps the most important given its potential legacy. The club are likely to receive Category One status which should help drive young, local talent.

(Image: D Legakis Photography/Athena)

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All the costs show why that for the £100m-plus headlines, putting hands on money to sign a striker is not as straightforward as some would suggest.

And while some could question is it not worth it to gamble, it is such notions that have crippled clubs in the past. Swansea are not relegation proof – perhaps no club are given that broadcast revenue would drop to around £38m, including the parachute payment.

All players’ contracts at the Liberty are believed to include relegation reduction clauses, meaning wages would drop, while the inevitable departure of star players would free up funds.

However, the club acknowledge a “major cost cutting exercise” would have to be performed should they drop – and that’s without gambling on transfers they can not afford. A drop down will be tough as it is, but doing it having blown money on unbudgeted transfers could have far more significant implications.

The nature of Swansea’s cash flow 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.