Away from the greed and vanity of the absurdly hyped Premier League lies the EFL. It’s in the news because Championship club Wigan Athletic have gone into administration. EFL chairman Rick Parry, the former Liverpool and Premier League chief executive, says Wigan’s plight is “the “tremendous shock”. It is?
Wigan Athletic changed Hong Kong-based owners a month ago. The new owners, Next Leader Fund, have put the club into administration. The club have been duly handed a 12-point deduction, which could see them relegated. The owners say they injected “more than £40m” into Wigan’s coffers. After taking control, Au Yeung said he was “excited to join the Wigan Athletic family”.
So who is to blame? The Guardian notes:
The EFL’s test and takeover process involves determining that a new owner has the money to buy a club and support it financially for at least the remainder of the season and the whole of the following season. However less than a month later and a week since Au Yeung was announced as the majority owner, the club has appointed the administrators Gerald Krasner, Paul Stanley and Dean Watson of the insolvency practitioner Begbies Traynor.
Parry has been talking with the BBC:
Rick Parry: “It was a tremendous shock – a bolt from the blue.
“Normally if a club is facing administration you get warning signs. Generally they don’t pay HMRC, they don’t pay the players, there are problems with creditors and it happens gradually.
“It is really unprecedented for an owner [Au Yeung Wai Kay, the head of Next Leader Fund that took ownership] to put his own club into administration, literally overnight. It is completely unprecedented for an owner who has only just acquired the club for £40m to put his prized asset straight into administration and therefore destroy its value to him.
“It makes absolutely no sense to us – it’s a real mystery, I’ve never seen anything quite like it.”
Roan: Does the EFL need to take some responsibility?
Parry: “He passed the tests. You can criticise them and say they need to be beefed up, but he did pass the test. He wasn’t a complete newcomer because there had been a transition from the previous owner, who had been there two years.
“The previous owner had been putting something like £24m in, and had secured Wigan in the Championship. He introduced the new owner, there had been partnerships, it had evolved. This isn’t somebody who appeared from nowhere.
“Our test, bluntly, is limited, it’s an objective test, there are limited grounds to turn down an owner. It is a test that, by definition, the more foreign owners you have the more difficult it is to apply because of the amount of information that is available.”
Roan: Was the EFL lax in the application of the rules?
Parry: “No – he passed the test, albeit it self-certifications and he provided the assurances. What none of our rules can legislate for is an owner changing his mind.”
Roan: Does this all show that the ownership rules need to be tightened?
Parry: “It’s no use just talking about owners’ and directors’ tests as if that is going to solve all of the problems. You really need to go back to why did we end up with Chinese owners in the lower reaches of the Championship in the first place?
Can we follow the money?
“We need to make our clubs sustainable – we shouldn’t be relying on random foreign owners.”
Roan: Is coronavirus a plausible excuse?
Parry: “If he said it in February, then it would be plausible. What I don’t get is given we are coming out of the crisis and heading towards playing again, why would you buy a club in June and then put it in administration at the end of the crisis? That’s the bit that doesn’t quite stack up.”
It all stacks up. English football is a bubble pumped up by marketing guff that attempts to make gambling an essential part of the match day experience, and foreign investment by people for whom the sport is a property-based business. The Premier League is run on greed. When the bubble bursts, more clubs will go to the wall.
A few more bits:
In a Hong Kong stock exchange document setting out its reasons for selling, IEC [International Entertainment Corporation] cited the “unsatisfactory financial performance” of the club, due to the punishing economics of the Championship, and also mentioned the suspension of football because of the coronavirus pandemic and the impact of Brexit. It said Brexit “could have material long-term impact on the economy and the future growth of the UK which may damage investors’ confidence in the UK and also reduce local consumer spending, which could further deteriorate the performance of the [club]”.
Since buying the club the company said it sustained increases in players’ wages to £17.5m, from £10m in 2017-18, and sustained a £9m loss for the 13 months to 30 June last year.
Read it all: Wigan Athletic: EFL chairman Rick Parry says English football has been ‘disrespected’
Posted: 9th, July 2020 | In: News, Sports Comment | TrackBack | Permalink