Why relegation to League 1 might not be such a bad thing for Wigan Athletic

Wigan Athletic’s wage bill in the 2018-19 season amounted to some £19.4m. The club’s revenue was £11.5m. The figures for the 2019-20 season recently completed are likely to be even more stark, given the impact of the Covid-19 pandemic on football revenues.

Were Ian Lenagan and his associates to take over Wigan Athletic we could expect a wage budget somewhere between 10-15% of what was paid last season. Lenegan would run the club within its means, in a stark contrast to what has happened over the recent years.

Stats courtesy of The Swiss Ramble

The Rugby Union’s Premiership has a salary cap of £7m per club whereas that of rugby league’s Super League is of £2.1m.

Clubs in the EFL are about to vote on salary caps for their three divisions. A cap of £2.5m is proposed for clubs in League 1, with £1.25m for League 2 clubs. The figure being quoted for the Championship is £18m.

The caps for the lower two divisions might well be accepted by the majority of the clubs involved, although a club like Sunderland, desperate to get out of League 1 and with a wage budget over £10m might not be happy about it.

Were Latics to continue with even a handful of players who regularly appeared last season and remain under contract there would be no way of staying within that £2.5m figure. We can therefore expect almost all of the current senior squad players to depart. Many of those players will already be considering their next move. It is typical to have relegation clauses in contracts which lower player salaries in the event. However, on the flip side players can have clauses inserted which give a maximum price for a transfer. Reports suggest that Antonee Robinson can leave for £1.5-£2m due to such a clause, whereas he was due to move to Milan in January for some £6m.

Existing players’ wages would be regarded as the divisional average as far as the salary cap is concerned. The average League 1 salary is around £1,800 per week. Latics could therefore keep some of their higher paid players without breaking the salary cap, although the big fall in revenues involved in dropping down a tier makes it unlikely that such luxuries be afforded. The last time Wigan were in League 1 they spent £11.7m on salaries in a bid to get out of the division. They made a loss of over £9m over that 2017-18 season as a result.

For the moment the administrators must bring in as much cash as possible through player sales. Transfer fees are typically paid in instalments, but Latics currently need cash upfront in order to pay salaries and repay their football debts of £6m. If salaries are not paid the club runs the risk of losing players without receiving transfer fees through not fulfilling contractual obligations. Given the situation we can expect players to be sold for fees well below market value or even released for free.

A period of austerity is coming for all clubs in the lower divisions. For Latics the situation is exacerbated by the extraordinary actions of the previous owners. In the long-term it is going to be of paramount importance that the academy is funded as it has been previously. The salary cap proposals exempt players under the age of 21 from the calculations.

The short-term picture for Wigan Athletic is grim as they struggle against the impact of the actions of the previous owners and the pandemic. The first step will be for new owners to take over and steer the club through a difficult 2020-21 season. Avoiding relegation to League 2 would be an achievement.

However, in the long-run the prospect of a club living within its means, producing home grown talent, is to be welcomed in terms of stability. Given the excellence of the academy it is to be hoped that new owners would not only continue to support it financially, but also employ a manager willing to give young players opportunities to a degree that we have rarely seen in recent years.

Building up a solid base in the lower levels of the EFL  over a period of years is essential to the survival of the club. It could well prove a blessing in disguise that the appeal against the 12 point penalty did not succeed. Another season in the financial lunacy of the Championship would not have been easy. But who knows – maybe in time even the Championship clubs will come to the agreement that things cannot continue as they have over these years.

 

 

 

Our thoughts, and those from social media, after another tough day for Wigan Athletic

Supporting Wigan Athletic has been such a rollercoaster ride. The highs have been marvellous: the lows have tested the resilience in us all.

Until the closing matches of the restarted season I had resigned myself to not worrying about what division Latics would be in next season. My main concern was for the survival of the club.

But I got hooked by the wonderful reaction of Paul Cook’s squad. Despite not having received their normal pay for months they played so well, making a wonderful effort to nullify that horrible 12-point penalty. Not having the fortune to get that second goal against Fulham was heart-breaking for players and fans alike.

Today’s decision by an appeal court regarding the 12-point deduction rubbed salt into the open wound.

Like many fans of “smaller” clubs I have become disillusioned with the way football in England has been going. Put simply, the rich are getting richer and the poor are getting poorer. There was always a “feeling” in the Premier League days that they really didn’t want a club like Wigan mingling with the elite and bloated. Since Latics have returned to the jurisdiction of the EFL that feeling has never gone away. Feelings are what they are: hard to substantiate, but one remains sceptical about the people in power in English, and indeed world, football.

Sometimes the heart can speak more loudly than the mind. The bottom line is that Latics still exist and long may that continue. It is heart-breaking to see staff laid off and players being sold for meagre prices, but other clubs have been through administration and come out of it stronger.

Paul Cook has gone and we can expect almost all of the senior squad to be on their way. The wage bill over summer must be drastically reduced so some players who would normally command a significant transfer fee will be freed from their contracts to get them off the wage bill.

Let’s take a brief look at how fans reacted to today’s news through the message boards and social media.

Our thanks go to the Cockney Latic Forum, the Vital Wigan – Latics Speyk Forum and Twitter for providing the media for the posts below to happen. Thanks go to all whose contributions are identified below.

Th10 on the Latics Speyk Forum commented:

It’s what we all expected, an absolute joke.

I really fear for the future of the club now. Only a few weeks till the start of the new season. We don’t have owners or a manager and won’t have many players left. What will the EFL do next when we’re not in a position to start the season? They’re going to destroy the club.

FrancosLoveChild on the Latics Speyk Forum said:

I wont stop loving Wigan, but I have fallen out with the sport, football was/is a big part of me, but as the years go on, you see how the sport is becoming more and more about keeping the big clubs happy for revenue than the integrity of the sport.

Cupwinners on the Cockney LaticForum said

I’m afraid this could be the final nail in the coffin for Wigan Athletic.

We need to find a new owner yesterday with mega deep bottomless pockets. We have no money, no crowd, no match day money, no manager, players leaving daily, TV funding slashed, players fire saled and clauses to allow them to leave cheap or free. Players been sold for nothing.

A new owner? J—s !! , as a business you would have to have your head seeing to take us on. I fear for our future truly fear. We need someone in asap or we will for sure be the new Bury.

Zeb2 on the Latics Speyk Forum said:

I don’t hate the DW/JJB but it will never feel the same to me as Springfield Park did.

All your childhood/teenage experiences are more intensely felt and burned into your memory than what comes afterwards.

The prospect of returning to L1 or L2 if we were at Springfield wouldn’t faze me one bit but is far more concern8ng rattling round a largely soulless stadium …..though to be absolutely fair we have had some cracking matches/atmospheres there as well, it’s just that you generally need 15k plus to generate that at the DW.

Of course we deserve a club, absolutely, it’s just profoundly more difficult for us as a 40 odd year ’League club’ to be located in this area which is a cauldron of English football.

It isn’t the Rugby that’s a problem for me it’s the born and bred Wiganers strutting around in their Utd/Liverpool/Everton/etc shirts (most of whom have never been)….I know Wiganers who are season ticket holders at Bolton, Burnley (fkn Burnley ?) and Blackpool , what’s that about ?

Clubs like Burnley, Stoke, Norwich, even Leicester enjoy the distinct advantage of being substantial towns/cities that are slap bang in the centre of “nowhereinparticularshire” ….draw a 20 mile radius round their grounds and who are they competing with ?….maybe one rival of a similar or bigger size or more likely none at all. Draw a 20 mile radius round Wigan and ….well !

Ideally we should be in a 12/15,000 stadium but we Can’t make that happen unfortunately.

Lets get past this current crisis and press on from there ….Onwards (but maybe not upwards for a bit just yet !)

 

Five talking points following a tired-looking performance at Charlton

Charlton Athletic 2 Wigan Athletic 2

The fight shown by Wigan Athletic’s players since the announcement that the club was going into administration has made the fans proud. They showed the same kind of fighting spirit yesterday at The Valley, but their legs were getting heavier and heavier as the second half wore on. It looked a matter of time before Charlton would eventually get the equaliser. It was to come in stoppage time.

After the game Paul Cook commented: “They’ve probably put more crosses into our box than any team we’ve played against for a long, long time, they kept asking the question. You can break down their equalising goal certainly, and we’re massively disappointed a striker can find himself in 10 yards of space in the penalty areas in the 92nd minute. We had three centre-halves on the pitch, they had two strikers, so that’s not right. But while we want to be self-critical, these players have been absolutely magnificent for our football club, that’s the brutal reality of the situation.”

Let’s look at some points arising:

It was another of those disappointing six pointer performances

Latics have been a revelation since February, moving from the relegation zone to what is a mid-table position until the 12 points are deducted. Much of the improvement has been down to relying less on the long-ball and building moves up from the back. Moreover, the whole team has played its role in developing a more solid defence, every player contributing to the improvement.

Since Paul Cook arrived Latics have not coped well with the “six pointer” games. Despite their dominance in League 1 they did not always impress against other teams in the promotion zone. Their record against clubs near the bottom of the Championship table has been mediocre. The win against Hull in midweek was welcome: it was a stunning performance and scoreline.  But the defeat at Luton and the insipid goalless draw with them at the DW together with two draws against a poor Barnsley side were certainly underwhelming.

What a pity the ghost of the 6 pointers could not have been laid to rest today at The Valley.

Would relegation to League 1 be so tragic?

Whether Latics stay in the Championship depends on results in the final games on Wednesday. It is by no means unlikely that Wigan Athletic will beat Fulham, but even if they did, they could still go down if other results do not go their way. But is it so crucial that Wigan stay in the second tier?

The bottom line for us too at Amigos is that we want the club to survive, whether it be in the second tier or the third next season. Despite the positive spin taken by much of the media regarding new owners coming in there remains a worrying possibility that the club will become defunct. There is validity in the comments made by several fans who ask who would want to take over a club with a wage bill that is more than 160% of its revenue and has made an operating loss in four of the last five years.

Should new owners be found could we expect them to pump in some £1m a month to keep the team competitive in the Championship? There clearly must be a rethink about matching expenditure with revenue.

Player salaries in League 1 are dwarfed by those in the Championship. To survive financially long-term, the club would be better placed in the third tier than the second. Granted, there is a difference of some £4m in broadcasting revenue for clubs in the Championship and League 1. Moreover, a potential owner would more likely be tempted to buy a club in the second tier rather than the third.

Were Latics to stay in the Championship for another season the outlook with a much-trimmed squad on a lower wage bill would be bleak. But the revenues for player sales would be higher.

What a blow for Rioch and the Academy

Perhaps the most welcoming sign for the future during the IEC reign was that they (through the chairman) had a plan to develop homegrown talent as a means for the club to be sustainable. Investments were made to improve academy facilities, leading to a welcome rise to Category 2 status.

For Latics to have young players making the youth teams of England, Scotland and Wales has been an indication of the progress made by Gregor Rioch and his staff. Reports of the 17-year-old Jude Bellingham about to be sold by Birmingham City for £40m are not far-fetched. But while Bellingham has made 31 starts and 9 substitute appearance in the Championship this season Wigan’s Joe Gelhardt has made just 2 starts and 15 as a substitute.

The impending departure of Jensen Weir to Brighton for £500,000 is a bitter pill to swallow. Weir was captain of the Scotland U16 team prior to switching to England at U17 and U18 levels. Although the funds to be received will be important in keeping the club afloat for the moment it is sad to see him go at such a low fee, although it is reported there will be add-ons involved. The transfer value was very much affected by the club’s financial situation, although the player had just one brief Championship appearance as a substitute.

It appears that 15-year-old prodigy Alfie Devine will be going to Tottenham, possibly Gelhardt too.

Given the wealth of young talent that has been coming through it is of paramount importance for the future of the club that Rioch and his key staff are retained despite the swingeing budget cuts that will be coming. The departure of likes of Weir, Gelhardt and Devine will hardly help their morale.

Is Paul Cook on his way out?

Reports of other Championship clubs’ interest in Paul Cook are certainly credible. Although his time at Wigan has been a rollercoaster ride his CV is looking impressive. On top of a wealth of experience in the lower divisions he kept Latics in the Championship on a relatively low budget. Only the 12-point deduction will prevent them from finishing in mid-table this season.

Should Cook stay next season he would almost certainly be facing an uphill task. Most of the players he has closely nurtured will most likely be gone over the summer. Put simply, Cook’s future career prospects would most likely be better served by a move to a bigger club, rather than stay and start a large rebuilding project.

Can Latics raise their game for Wednesday’s clash with Fulham?

Although history might suggest otherwise it is by no means unlikely that Wigan Athletic will beat Fulham on Wednesday. With victories over the top two teams in the table they have shown that they can raise their game against strong opposition.

Stats courtesy of WhoScored.com

 

Ready for Brentford? The challenge for Paul Cook and his squad

What a tempestuous week it has been.

A wonderful performance by the Latics team in blowing away Stoke City raised our hopes of at least a mid-table finish, with lots of optimism for the coming season. Then it was all turned upside down by that stunning announcement of the club going into administration. The Wigan Athletic community is still reeling from that news.

Brentford away is hardly the fixture that one would choose following the turbulence of the last three days. They outplayed Latics at the DW Stadium in November to the tune of a resounding 3-0 scoreline. They have won their last four games and still have a chance of automatic promotion.

Latics were on the crest of a wave following the Stoke game on Tuesday evening. Hopes were high that they could go to west London and give the Bees a run for their money. But now we learn that the players, who had deferred 30% of their salaries in the lockdown period, will only receive a fraction of their salaries today. Paul Cook must somehow lift his players to concentrate on the here and now, despite the uncertain futures at the club that they all now face.

Sam Morsy’s rallying call was admirable and we can only hope that captain, manager and coaches can maintain morale in this difficult hour.

The news and social media have been awash with stories about what has happened to the club.

The EFL’s prompt notification that there will be an automatic 12-point deduction did not go down well with Latics fans. Questions abound how their “Fit and Proper Persons” criteria allowed a shady change of ownership leading to administration within a month of Next Leader Fund taking ownership.

The reasons for NLF opting for administration remain unknown although there is no shortage of conspiracy theories being put forward.

Fans have been putting forward their views on the social media and message boards. Some fear for the very existence of the club. Others are concerned that the points deduction will lead the club back to League 1, although there are optimists who believe the team can gather some 13-14 points from the last 6 games to avoid that happening.

In the meantime, Latics must find the funding to help them complete the season, by no means an easy matter with no money coming into the club from the owners and minimal revenues available from playing behind closed doors.

Should the club manage its way to complete its fixtures and somehow gather enough points to avoid relegation it would be a big step forward. A Championship club is more attractive to a prospective buyer than one in League 1. Moreover, the broadcasting revenues and larger away supporter attendances make it financially more viable, even if the club were going to run on a shoestring budget for a period.

My concern is that the very survival of the club is at stake. After following them to places like Congleton, Winsford and Oswestry I can deal with the likes of Rochdale and Oldham should the club manage to get through this sticky period.

It is a stressful and difficult time for us all who care so much for our club. The game at Brentford tomorrow pales in comparison with the mountain the club must climb to stay in operation. However, a win could really lift our spirits and give us a little more hope for what lies ahead.

The social media reacts to the Wigan Athletic administration announcement

Yesterday’s news that Wigan Athletic have been put into administration and that the EFL will deduct 12 points was a stunner. What is going to happen to our club??

My love affair with Latics started at the age of 12 when I went to Springfield Park to watch Latics as a non-league club. That first visit was enough to make me hooked and I have spent practically a lifetime watching them, no matter what league or division they were in.

Sure, I would love to see Wigan Athletic back in the Premier League, but the parameters in football have changed so much since Paul Jewell’s team took us up there. The bottom line for me is to see the club survive. It is not so important what division they are in.

However, we and other Latics fan sites have regularly published our concerns about the debts the club has been accruing in recent years. On June 8 we published an article “An initially challenging time is coming for Wigan Athletic”, referring to the comments of new co-owner Au Yeung Wai Kay. We raised the prospect of EFL clubs being lost in the revenue crunch following on from the Covid-19 pandemic. We talked about the need for a fire-sale akin to that made by Dave Whelan in January 2015 and drastic reductions in the club’s wage bill. But little did we know that that the initially challenging time would come as far as administration.

Let’s take a look at how fans reacted to the shock news through the message boards and social media.

Our thanks go to the Cockney Latic Forum, the Vital Wigan – Latics Speyk Forum and Twitter for providing the media for the posts below to happen. Thanks go to all whose contributions are identified below.

Captain Kernow on the Latics Speyk Forum commented:

It just doesn’t make any sense, I don’t think I’ve ever seen a club just enter administration. There’s usually weeks and months of foretelling beforehand.

We were taken over three weeks ago where the owners would have had to prove finances to the EFL. They’ve not even got through the first payday.
We’ve invested in player contracts and development facilities this month.
I don’t understand why we would do these things if we were so skint?

I don’t think finishing 13 points clear of the bottom 3 is beyond us, especially on current form. But how many players are actually going to keep on playing?

Leylandlatic4ever on the Cockney LaticForum said:

The situation stinks and I felt physically sick when I read the news this afternoon, especially gutting after the way the lads have performed since the restart.

We have 4 very winnable games in the last six. All of us, no exceptions, must get behind the boys more than ever. The future of the club is quite literally at stake. Get the 12 points back on the pitch and tell the EFL where to stick their deduction.

We are Wigan…never give up, give in or surrender.

Scharnerama on the Latics Speyk Forum commented:

The EFL are disgusting, throwing us to the dogs like they did with Bury. Never mind that theres a global pandemic happening which has delayed our season and impacted every clubs finances, and that they deemed our new owners ‘fit and proper’ mere weeks ago, literally less than 1 hour after its announced we’re entering administration, they s…. all over us and say we’re getting hit with a deduction. It would have been some miracle if we got 13 points from the last 6 games anyway, but now we’ve GOT to get 13 points or we’re down, whats that going to do for team morale? Playing under that pressure? If we finish outside the relegation zone this year … -12 points and relegation. Go down anyway? Start lg1 with -12 points. Either way we’re smashed. Maybe it would have been better for this season to have been ended early afterall, although PPG would probably have sent us down anyway.

What an absolute crusher though. After last nights win and the form we’ve been showing, the last thing I expected today was to fear for the future of the club. Jokes about going for the play offs … But here we are. I’ve no idea what our future holds – or if we actually have one – but thats a fear for another day. All we can do for now is rally and cheer for the squad to go out there and fight for the 13 points we need. ‘Little’ Wigan the underdogs, taking on the EFL for survival. If any team can upset the odds its us, so i’ve not lost faith. But Ch–st, what an absolute mountain we’ve got to climb.

Th10 on the Latics Speyk Forum said:

I think the best thing is the 12 point deduction applying this season. Starting a championship season on -12 would give us no chance of surviving anyway. At least the players can fight for the rest of what could be our last season as a club. If the club does survive then at least next season is a fresh start. Look at Bolton this year, they were down before it even started.
If someone does want to buy the club then who does the money go to? Surely if the owners have run the club into the ground and put it into admin then they don’t get anything. I’m not sure how it works.

Pies’r’Us on the Latics Speyk Forum detailed his previous warnings:

I wrote to EFL in May and then the following to all TV and radio broadcaster, Wigan MP but was ignored..

“END OF THE PIER FOR WIGAN ATHLETIC?

Wigan Athletic have recently been sold and bought by the same person; Dr. Choi Chiu Fai Stanley. He is the chairman and majority shareholder of the last owner; IEC plc, and also majority shareholder of the new owning company ‘Next Leader Fund LP’. This has been approved by the EFL which renders their club ownership process to kiddies TV; ‘The Magic Roundabout’.

Dr. Stanley, has over 20 years experience in financial services and merger and acquisition projects. He also a renowned poker player in the far eastern gambling world through televised poker tournaments.

According to his letter sent to IEC plc shareholders on 8 May 2020 (link below), one of the principle reasons for selling the club and transferring ownership is that it will be financially advantageous to IEC in regard to a previous interest free loan of £24.36 million. IEC have provided a replacement loan via ‘the new owner’ and most importantly; it is interest bearing at 8%. This is now costing Wigan Athletic £37,846 A WEEK! The club have made an average loss over the last two years of circa £8.5 million which equates to £163,461 per week and therefore losses now total circa £200,000 per week.

For context; the present stock market capitalisation (value) of IEC plc is £36.48 million and is engaged in expensive court actions with tax authorities concerning 2 of it’s subsidiaries.

However, the terms require the capital sum to be repaid in 12 months and if the club defaults then the interest rate increases to 20% to which weekly payments on the £24.36 million loan amounts to £93,692 !”

Dr Stanley knows the company cannot pay these figures on their present income and so did the directors of the club and the EFL. So why was it allowed to happen?

Muttywhitedog on the Cockney Latic Forum said:

I’m very shocked to hear this news. Administration is not the end of the world – Leicester & Southampton came back stronger. You are not relegation fodder, and a couple of wins against Hull & Charlton should see you safe and back next season, hopefully stronger for the experience and with an owner who gives a shit.

It does beg questions about ownership though – particularly those without a pot to p–s in, and it seems as Wigan & Sunderland have something in common in that respect.

Good luck.

The Egg on the Cockney Latic Forum stated:

Having a club to support is the absolute priority as you say. Staying in the championship will help that.

We need 3 wins from 6 I reckon.

Dnr on the Cockney Latic Forum added:

Siege mentality, need to gain four or five more points than the bottom three between now and the end of the season to be more that 12 points clear and avoid relegation. Current form would suggest we can do it, but this must shatter the lads. Interesting to see the impact on contracts, players may be able to just walk away.