Birmingham City handed £3.9m boost by Knighthead ahead of January transfer window | OneFootball

Tom Wagner and his investment group haven't been afraid to open up the purse strings for the Blues.

Birmingham City's owners Knighthead Capital Management have injected a further £3.9 million into the club as their spending on the Blues continues to increase.

It's no secret that Blues' spending has been on an astronomical scale compared to that of a usual League One team. This is Knighthead boss Tom Wagner's second season in charge at the Midlands club, and the moves made over the summer have made it very clear that there is no intention to remain in the third tier of English football for any longer than one season.

Smashing League One transfer records multiple times earlier this year, Birmingham set out to return to the Championship in the quickest way possible. They bought the league's reigning top scorer, Alfie May, talent from across Europe and became the first team in League One history to spend an eight-figure transfer fee on a player when they bought Jay Stansfield for £15 million.

In total, £20-25 million was spent by the club in the summer, according to The Athletic. It was a truly unprecedented window, but the money used to improve Chris Davies' team was just a small part of the mass spending project that is going on at St Andrew's.

The eventual plan to move away from their current home to a new 'Sports Quarter' near the end of the decade, that is going to cost £2-3 billion, is in the works, although Wagner stated that the local transport network surrounding the 48-acre former Birmingham Wheels site will have to improve in order for the new project to go ahead.

In order for them to fund the team, the club's owners are having to continue to pump money into the club, and latest documents on Companies House show that another round of investments have been made.

Birmingham City receive cash injection from Knighthead

Shelby Companies - the entity which Knighthead uses to invest in Birmingham - have issued a further 3.9 million free shares, equating to £3.9 million, into the club.

The Blues are able to spend more than most of their other League One competitors, and not just because of the superior wealth of their owners. 60% of a team's income is allowed to be used on player wages, but, in order to soften the blow of the drop, those coming down from the Championship get a little more leeway.

The new £3.9 million that has just gone into the club won't count towards any spending regulations as owners are free to drive more money into the club via fresh equity if they want to.

Alongside their boost of investment, City's owners also set up a new company: Shelby Artificial Intelligence Limited. They did this in order to buy an existing supercomputer company, according to finance expert Kieran Maguire.

Latest Birmingham City financial update shows the generosity of Tom Wagner and co

Even if a club gets wealthy owners in through the door, there is no guarantee that it will lead to success for them.

That seemed to be the way with Birmingham last season. They made poor decisions which ultimately sunk them, despite the money they had invested.

Most custodians would have pulled back on their spending a little bit after such a disappointing season; Knighthead however decided to double down and bring in the best possible talent for Chris Davies to work with.

In doing so, they have created a juggernaut of a team that is almost certainly going to win promotion, and almost as likely is their chance of winning the league.

It was a risk, but one that looks like it's going to be worth it in the long-term for them.