Swansea City's owners have warned it could take years for the club to return to the Premier League as they confront the "harsh reality" of relegation.
An austere summer has seen the Swans cut costs to cope with the financial implications of dropping down to the Championship, with several players leaving as the club pays for its costly and unsuccessful "bets" in the transfer market in recent years.
Steve Kaplan and Jason Levien, who bought a controlling stake of 68% in Swansea in 2016, admit they have made "mistakes" during their two years in charge - but they have ruled out selling the club.
The American businessmen have also revealed they are considering putting equity into the club - by buying more shares, possibly from the Supporters' Trust - in order to help absorb losses related to relegation.
Swansea's financial struggles have been compounded by a summer in which they have failed to recoup the transfer fees they had hoped to for players leaving.
Having budgeted for much more, the Swans received a combined total of only around £30m for the departures of defenders Alfie Mawson and Federico Fernandez, forward Jordan Ayew, centre-backs Jordi Amat and Kyle Bartley, midfielder Sam Clucas and goalkeeper Lukasz Fabianski.
That combined figure is around £15m less than the sum of the fees widely reported for those players.
As a result, that shortfall left Swansea with less money to spend than they expected this summer, and their lack of signings prompted strong criticism from pundits, the Trust and the fans at large.
In this rare and wide-ranging interview, Kaplan and Levien explain:
- Why Swansea have had to cut costs so severely this summer.
- Why the Swans are still paying transfer fees for players they bought last season and earlier, and why that is hampering their recruitment now.
- Why Swansea did not sign Ryan Woods from Brentford last month, a failed move which they admit "disappointed" manager Graham Potter.
- How failed "bets" in the transfer market have cost the club dearly, and how those failures affect issues such as Financial Fair Play.
- How they have put their own money into the club but are not taking any money out of the club, for themselves or other members of their American consortium.
- Why Swansea have had to take their "hard medicine now" and why further cuts may follow.
- Chairman Huw Jenkins' position and future, and why they have put plans to appoint a sporting director on hold.
THE FULL INTERVIEW
How long will it take for Swansea City to return to the Premier League?
Steve Kaplan (SK): "We view this as a project in a lot of ways and respects. This is a reboot, we are doing it with young players who really want to be there. We know there are no guarantees we will get promoted in the first year in the Championship. This is a multi-year plan to get back up and, when we get back up, be sustainable."
Can you explain why Swansea have cut costs so severely this summer?
Jason Levien (JL): "There is a harsh reality to relegation which is that the players you had the day before you were relegated, are worth less the day after you are relegated. Trying to figure out the market for those players, while trying to hold on to younger players who are growing into bigger roles was important for us.
"We are creating a new identity around those players and the key to May and early June was finding the right manager. Someone we could grow with over a multi-year period, someone who could be a good evaluator of talent and of who in the squad we wanted to keep and which players we were ready to let go of and that was a process that went on for several weeks.
"First, finding Graham and then working with Graham and Kyle [Macaulay, Swansea's new head of recruitment]. We held meetings in person and spoke over the phone many times over many days and hours. We decided on a strategy of bringing in young, aspiring talent they had identified. Trying to hold on to players on the current squad we felt could grow with that talent. One of those key players was Oli McBurnie who had not had regular minutes with Swansea in the Premier League.
"We felt there was a big opportunity for him to take the next step and we rejected offers from other clubs for him because we wanted to hold on to someone like Oli. That was a key decision. We looked at players who were later on in years and whether there was a chance to maximise their value. It was a difficult summer in that respect, but if you look at the players we lost and the players we gained, we feel we are moving in a very positive direction and there is a lot to be positive about.
"There is certainly a lot of work to do and there is more investment to be made, but the reality is there were players we bought along the way over the last two years that we are still paying transfer fees for and those are the realities of moving from the Premier League to the Championship. Steve and I are committed to building a sustainable squad, we are trying to learn from our mistakes and add players of value who can grow into their rules."
SK: "I give Graham Potter tremendous credit. He is playing young players who did not have the confidence to play. Oli McBurnie is an example. Everywhere he has played he has scored goals. I think Graham deserves credit for believing in him, and that is true of a lot of young players and what it says to players in the academy is that if they work hard there is a place for you in our squad. That's a tremendous message."
JL: "One thing I would add there is we also have some key older players like Martin Olsson and Kyle Naughton, we are looking forward to Wilfried Bony returning, Leroy Fer's return has been a big boost. I don't think we've seen Tom Carroll's best football yet. Those are players with Premier League experience and knowledge that other Championship clubs do not have."
How big an issue or consideration is Financial Fair Play (FFP)?
JL: "It is something we are monitoring, we are talking about it regularly with our chief financial officer and chief operating officer. We're a squad that's spent heavily on players and not necessarily got the return on those players when they're going on the market. We have to be very careful because it is important in terms of our ability in the transfer market."
The rules state that putting in equity would absorb some of the losses from relegation provides additional financial leeway on FFP. With that in mind, is that something you are planning to do?
SK: "We are going to be taking a look at that. We obviously have to have a conversation with the [Supporters'] Trust and we will be having those talks over the next weeks and months."
What is the status of the proposed share sale that fell through and what happened?
SK: "There has been a request for mediation. I hope that the Trust, the selling shareholders and ourselves can sit in a room without lawyers and figure out how to do something in the best interests in the club. That is all I can say on that."
JL: "We are keen to make the necessary investment in the club to keep the club in a stable financial position. We have ownership partners, and we are mindful of that and FFP rules. We are trying to do the right thing for the long and medium term. That is our position."
Have you put any of your own money into the club?
JL: "[Yes] Our own funds and put them into the club for advanced payments we would receive otherwise, but were waiting on. We have done that on multiple occasions and, where appropriate, we will continue to do that because we want the club on a more sound financial footing. So we stepped in and did that last season, and we have done it this season. We want to be thoughtful about it, but there are resources and planning behind that to make sure the club is financially secure."
In terms of that money you put in, does it return to you once those payments come in? Is there a requirement for that money to come back to you out of the football club?
JL: "If we did not have that money back then it would be equity. We would be putting equity in, we have not done that. If we put equity in then there would be no requirement for it to come back to us. Up to now, we have said that they are advances to the club that banks will not give us, and we are ready to step in and do that."
The American consortium you led in buying the club in 2016 included another 25 investors. Do they make any money out of the club?
SK: "We are not paying out dividends. All the money goes back into the club."
Can you explain why Ryan Woods was not signed from Brentford this summer? Many felt the failure to secure that transfer has become the defining moment of the transfer window.
JL: "We certainly thought Ryan Woods was a talented player. He is very effective in the role he plays, but ultimately when we did our diligence we thought it was not the ideal fit for us at this time. That was a decision that took many different conversations with Kyle Macaulay, with Graham Potter, with Huw Jenkins and our whole team. It was not an easy decision as he is a player who is attractive for a lot of reasons, but we came out and said it was not the right time to make that deal happen."
That deal was pursued for a long time, even up until deadline day there were people at the club attempting to get it done. If you had these reservations and the deal was not going to happen, why was it still being pursued? Doesn't that suggest there is a disconnect between you operating on this side of the Atlantic, and club staff working in Swansea?
JL: "I think the market at the end of the window is always hectic with a lot of comings and goings. When we assessed it on deadline day we felt it was not the right move. We certainly had a lot of appreciation for his talent level and were hopeful we could get something done.
"We sometimes have sold players on deadline day and taken a massive hit in terms of the reduction of what we receive. There was no appetite from Ryan Woods' club to do that, with even a small reduction. I think we let the window play out as best we could and wanted to be opportunistic because we had an appreciation of what Ryan Woods would bring."
Was Graham Potter disappointed Woods did not sign, given he clearly felt he would make a difference?
JL: "We would love to provide Graham with every single player that he wants and that is something our whole staff try to do. But the reality of the market and how players fit together means we cannot live in a world where we never disappoint the manager. We would never want to disappoint Graham, we don't want to disappoint him.
"As an example, Paul Clement was thrilled we got Renato Sanches and we got Wilfried Bony and Tammy Abraham. We made him happy, and each manager we have to balance making them happy with the long-term plan and where we are heading."
There has been speculation that the cost cutting is with a view to selling the club. Have you considered selling?
SK: "We're dug in. We're not selling the club. We're here to rebuild and we're determined. So if anybody's hoping we're selling the club, they're sorely mistaken."
Do you see yourselves staying for the long haul?
SK: "Yes we do. You're going to be stuck with us for a while."
What is the ultimate goal for you and the club? What's the dream scenario?
SK: "The dream scenario would be for us to shepherd the club back into the Premier League, put the club in a sustainable position, have some success in the Premier League. That would make me feel a real sense of accomplishment. I think, long-term, an expansion of the stadium while we're in the Premier League, a naming rights deal on the stadium to help us with sustainability, improving our commercial operations so if we were ever again relegated, we'd be in a better position to withstand relegation. If we can accomplish that, I'd feel we'd accomplished what we set out to do."
When you view your two years in charge, has being in charge of a football club surprised you in any way? How do you assess your two years?
SK: "You'll have to excuse the fact we're American so, by our nature, we can be overly optimistic. That's our nature. I tell my kids 'Don't be afraid to fail' because you never succeed if you don't take some chances. We've definitely made some mistakes along the way, we've learned a lot. But just like a footballer who gets knocked on their butt or makes a mistake or gets a red card in the first five minutes of a match, we're going to get back up, put our big boy pants on and take on the next challenge."
JL: "I think we underestimated the defensive position the club was in when we came in, in terms of staying in the league and getting away from its identity. I think the exciting part now is to recreate an identity and to build something. In many ways it's liberating to have the opportunity to do that and be out of the business of trying to just stay alive and stay afloat."
SK: "I'm also a fan and, as a fan, I'm enjoying the football right now so much more than I was in the last two years. It just feels like we're on our front foot, we're attacking, we're creating something, as opposed to just battling to survive. It feels better. That's how I feel as a fan and an owner."
What would you deem a successful season on the field this year?
SK: "Even as an optimistic American, I think a spectacular result this year would be to be in the top six and to have a shot in the play-offs of getting back in the Premier League. But as I've said before, if we're seventh and not sixth, it's not a failure. We're trying to build something. We want to be judged this year by how we develop as a football club, how we play on the pitch. Are we developing our young players? Are we creating the base on which we can build for the future? Yes, we want to make the top six, we want to get promoted, but as importantly, we're building for the long term."
In terms of balancing the books, if for argument's sake in a year's time Bersant Celina has a good season and needs to be sold, do you keep making those cuts or do you speculate to accumulate?
SK: "I don't want to speculate as to what we're going to do in the future because a lot can change. But what we're trying to do is take the hard medicine now so that we can build for the future. I know that's hard for supporters to accept. There will be more hard medicine to take, but we want to build around our young guys. If you look at what we've done, we've kept our young guys and that's where our focus is going to be."
Will there be money available to spend in January?
SK: "I think we'll assess what our needs are. We'll have to assess what players are going to be moved in January and, if there's a need, we'll take a very hard look at adding players."
In terms of the position of the chairman, Huw Jenkins, do you have any succession plan in terms of what happens if he leaves or steps down? Do you know what happens the day he is not there, or are you looking to bring someone in to work alongside him at executive level on the football side?
JL: "We have a very good working relationship with Huw, his track record over 15 years and more has more positives to it than he gets credit for. Collectively, some of the decision-making we have all been a part of and we all share responsibility for the transfer windows that have not been ideal.
"We work well with Huw, we know how much he loves the club. I think it is pretty clear Huw has changed his role this summer and we have brought someone like Kyle in to make our recruitment stronger and we have changed our strategy and personnel.
"We see that adjustment as an opportunity to move in a different direction as a club, but we still think there is a lot of value from the knowledge, the institutional knowledge he [Jenkins] has. But we are adjusting and we are learning and trying to figure out the right process for us to make decisions to be more effective in the future. That is what I can say."
SK: "Huw has been a great servant of the club. He has certainly made some mistakes, but we all have. But there has to be a recognition that the man loves the football club and he helped steer it from the lowest professional division into the Premier League and then sustained the club there. We all owe him a debt of gratitude."
You've alluded to mistakes you've made in the transfer market. What do you consider those mistakes to have been?
JL: "The club made some big bets on players in the £8m-plus scale and those bets did not pay off for us. They may not have fitted the squad right, and they might have been bets we would have been better off making in smaller doses and diversifying our opportunity for return on them."
SK: "Ultimately, when we bring a player from our academy, we know that player intimately. This is why I believe in the academy and developing players internally. We know what they are like, what their home life is like. We know what we are getting. There is a limit on the due diligence you can do on a player [outside the club], no matter how hard you try. You can only know so much, especially if you are coming from another league, and there is also an element of luck. There is a much higher likelihood of success if you can bring up young players and develop them yourself."