Have issues relating to the DW Stadium been holding up the Garrido group takeover?

Lisa Nandy put the cat among the pigeons in her interviews with Jay Whittle and the PWU Podcast a couple of days ago. Her suggestion that the exclusivity rights for the Garrido group should not be extended was a bombshell. The prospect of other bidders coming into play at this stage of the proceedings was something that split opinion between fans on the message boards and social media.

“We are pleased to report that substantial progress has been made with the Council regarding the assignment of the lease.  In addition further discussions have taken place between the EFL, the bidder and ourselves and, in our opinion, all information requested of the bidders has been supplied including but not limited to proof of funds for the next two seasons.In the light of this progress, the exclusivity period, which expires today, has been extended.  We now await a final answer from the EFL, and no further comment will be made until that is received.”

The administrators’ communique yesterday put the ball back firmly into the hands of Jose Miguel Garrido and his associates.

But what was surprising was to learn that there had been issues involving the Council. Has the issue of the lease been a sticking point in the drawn-out takeover bid by the Spanish investors?

When Dave Whelan built the DW Stadium in 1999 he made a deal with Wigan Council over the lease of the land it was built upon. The agreement contained a requirement that “two sporting clubs be granted a licence for use of the stadium by the tenant.” Wigan Warriors were given a sub-lease for the use of the stadium until 2025. When Ian Lenagan bought the rugby club in 2007 the lease was extended for another 25 years.

Whelan’s ownership of Latics involved him setting up different companies to control the various operations of his purchase. The company that controls the stadium – Wigan Football Company Limited – is currently under administration. Wigan Council owns 15% of its shares.  If the Garrido group are to purchase the remaining 85% of the shares they need to come to an agreement with the Council over the lease. This necessitates the Spanish group coming to an agreement with Ian Lenagan over stadium rental.

Whelan’s agreement with Lenegan involved the Warriors paying rent according to their attendances. Reports have suggested that they contribute around 10% of their attendance money. Local journalist, Phil Wilkinson, estimates the figure to be around £300,000 per annum, although it can hover above or below that figure depending on attendances.

Mudhutter’s revealing tweet – click here to see his analysis on Twitter – reveals the extent to which the stadium is a white elephant to Wigan Athletic.

The figures Mudhutter has compiled show the stadium company losing some £1.5m for the 2018-19 season. With only £800,000 coming in rent from the Warriors and the separate company that runs the football club the stadium company was struggling to meet its expenses of over £4m.

There has been concern among Latics fans that Ian Lenegan might be intent on buying the stadium for the Warriors. However, the administrators have made it clear that the stadium was part of the overall package, although they did sell off the Euxton training facility separately. Moreover, why would Lenagan want to buy a stadium that cannot break even financially? Better to continue to pay rent, especially if it is pitched at such a modest level.

With spectators not able to attend games at the DW due to the Covid-19 crisis the stadium stands to make even greater losses this season. With no share of gate receipts and no income derived from food and drink sales on matchdays there is minimal income coming in. One wonders if the Warriors are getting off virtually rent-free during this period. Or is there a proviso in the agreement that covers such instances?

The administrators’ statement suggests that the bidders have now provided the EFL with the necessary information requested. In the meantime, the terms of stadium lease by the Warriors will need to be finalised between Garrido and Lenagan so that Wigan Council can give approval.

When Dave Whelan made the agreement with the council more than 20 years ago would he have envisaged that the stadium would become a veritable millstone around the club’s neck?

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