Category Archives: Financial

Maloney’s summer recruitment nears completion- but what can we expect?

Posted by JJ (Tony) in Financial, Other, Specials, Transfers and tagged with , , , , ,

I’m really happy with what people in the background have done, we’ve all worked extremely hard to get the squad to where it is now. I don’t see too many more coming in, maybe one or two.”

It has been a difficult summer recruitment exercise for Shaun Maloney and his staff. The previous recruitment team were shed in the upheavals over the previous months. Moreover, the Guardian newspaper reported that the EFL had decreed that the club would not be allowed to pay transfer fees until the summer of 2024.

Having rescued Latics from impending liquidation Mike Danson has kept faith in the manager, but has made it clear that he expects the club to be run in a more sustainable manner. That presents a considerable challenge to Maloney and will induce a major shift in expectations from the fan base.

Since Dave Whelan bought the club in 1995 it has never been run in a sustainable manner.

Whelan invested a large sum of money to help the club climb up to the Premier League in 2005. The first season was a great success, but Latics came so close to relegation in the second, an away win at Sheffield United on the last day of the season saving them. Steve Bruce took over from Paul Jewell in 2007 and stabilised things, albeit at a financial cost. Roberto Martinez was presented with a reduced budget when he took charge in 2009 and did incredibly well to keep the club in the division for four more years, winning the FA Cup in the relegation year of 2013.

Despite the huge increase in revenues Latics had continued to struggle financially in the top tier, with Whelan subsidising considerable losses. With large sums coming into the club from parachute payments and some £20m incoming transfer fees the return to the Championship could have been profitable. However, poor decisions were made in the hiring and firing of managers and recruitment of players. David Sharpe had replaced his grandfather as chairman in March 2015, but the net result was the frittering away of two years of parachute payments and relegation to League 1 The following season saw Latics winning League 1 but the heavy wage bill to do so largely wiped away the parachute payments coming in.

After more years of financial losses, the Whelan family sold the club to IEC in November 2018. The mysterious happenings under IEC saw the club go into administration in July 2020, before being bought by Phoenix 2021 in March 2021. Like IEC, the Bahraini ownership had poured funds into the club, but their overspending in the 2021-22 season was to become a millstone around their necks. Somewhere between £40-50m had been put into the club over those years by IEC and the Bahrainis.

Football clubs below the elite levels of the Premier League are rarely going to be good investments, as IEC and Phoenix 2021 discovered. Dave Whelan was a massive benefactor to Wigan Athletic, allowing the club to live beyond it means. He never required it to be run in a sustainable manner, constantly bankrolling it: some would say it was a series “gifts” from the local-born millionaire.

However, Mike Danson, another local-born owner, is not prepared to support the club in the Whelan way.

Most fans realise that without Danson the club could have ceased to exist. They are both relieved and appreciative, currently accepting his plans on running the club sustainably. However, with the billionaire due to take over full control of Wigan Warriors in November there are concerns of what will happen with the same person owning both the football club and the rugby league club. There are questions about whether the DW Stadium, currently under football club ownership, will be regarded as a separate entity, owned by neither club, but by Danson himself.

Given the number of players remaining at the club on bloated salaries given them by Phoenix 2021 it is unlikely that Latics will break-even financially this season. Reports suggested the budget will be set at around a third of that of least season, bringing to a figure around £6m, well over the average for the division.

Given the situation Maloney has been facing, with little wiggle room in the budget and a transfer embargo from the EFL, he has had to look for free agents add loan players. His main squad currently comprises:

Goalkeepers: Ben Amos (32), Sam Tickle (20).

Full backs/wing backs: Sean Clare (26), James McClean (34), Tom Pearce (25), Luke Robinson (21).

Central defenders: Charlie Hughes (19), Jason Kerr (26), Sean Morrison (20), Jack Whatmough (26).

Midfielders: Thelo Aasgaard (21), James Balagizi (19), Jamie McGrath (26), Liam Shaw (22), Matt Smith (22), Scott Smith (22),

Wide players: Jordan Jones (28), Callum Lang (24), Callum McManaman (32), Jonny Smith (25).

Strikers: Stephen Humphrys (25), Josh Magennis (32), Josh Stones (19), Charlie Wyke (30)

Several of those players can play in various positions in addition to the ascribed above. I have included Josh Stones in the senior squad because he appears there on the club website. The situation regarding Jamie McGrath remains uncertain, with him not having taken part in pre-season games. Reports suggest the return of central defender Kell Watts on loan, with rumours suggesting that Jack Whatmough will soon be leaving for a fee. With only one specialist right back/wing back in the squad, Sean Clare, Maloney will be looking for backup. Rumours link Latics with the experienced Josh Emmanuel (25) a free agent, ex-Grimsby Town.

Against Everton Latics played a fluid 4-4-2 system, with Callum Lang and Charlie Wyke up front and Stephen Humphrys and Callum McManaman playing wide. One expects that Maloney’s preferred formation will be 3-4-3 with Clare and McClean as wing backs and a mobile, interchanging front line of three. However, he will switch to the likes of 4-2-3-1 or 4-4-2 when a tactical change is needed.

Maloney’s squad is close to being complete. On paper it is not a strong as previous squads that have won the division. However, the manager will continue to work on a style of play that will help his players develop professionally. The latter is so important for the long-term survival of the club with Latics grooming young players to have significant sell-on value, unlike so many in last season’s squad.  

Morale among the fan base is fairly high at the moment, but we need to expect some hiccups along the way. The Whelan years spoilt us to a large degree, but now we are getting closer to what the economics of the club will be like without him. Some fans, weaned on that era, have particularly high expectations, but will need to temper those with the reality of the present.  

Talal sets the target of financial sustainability

Posted by JJ (Tony) in Financial and tagged with ,

“It’s important for us to be financially responsible going forward, and we’re fully committed to doing so. Beginning next season, we’ll operate within our means and we will prioritise maintaining a solid financial standing. Our strategies for the upcoming transfer window and beyond will take this into account and we’re determined to build a sustainable future for the Club in line with a modern data-backed approach.”

The past couple of weeks have been particularly unsettling for Wigan Athletic fans. For the fourth time this season players and staff were not paid on time, resulting in disciplinary action from the EFL. The three-point deduction imposed will almost certainly see the club relegated back into League 1. Moreover, there could be further punishment to come because the club’s owner failed to deposit an amount equal to 125% of the forecast monthly wage bills in a designated Club account as previously instructed by the EFL. Should there be a further points deduction it is likely to be imposed for the upcoming season.

Fans have been bewildered by these events and unsure of the direction in which the club is heading in the short term. Many took to the social media and message boards. Most sought an explanation from club management why this could have happened, seeking reassurance for the future. Sadly others were condemning in their tone, some sending totally unacceptable tweets to the chairman, Talal Al Hammad. They had perhaps overlooked that the owner had previously settled club debt to the value of at £14m through the purchase of shares, leaving the club debt free at the time.  

We had been therefore been waiting for Talal Al Hammad to give us a statement of the direction in which he intends to take the club. Al Hammad had tweeted that the first priority was to make sure the players were paid for the recent missed pay date. After that he would provide further information. His statement came on Friday, when the player payments had been processed.

Although we still do not know why the payments were not made on time – perhaps the true reasons will never be revealed – Al Hammad stated that “This issue has now been resolved and I can assure you that the late payment of wages will not happen again. It simply cannot happen again.” He also recognised the need to rebuild trust with players, staff and fans.

On March 8 the club announced a loss of £7.7m for the 2020-21 season, with staff costs of £13.4m and turnover of £8.3m. The announcement included a statement that “Phoenix 2021 Limited will continue to fund the future commitments as equity rather than debt”. A similar loss was made in Dave Whelan’s last season as chairman, 2017-18, with a similar staffing cost. Both Leam Richardson and Gary Caldwell were successful in winning League 1, buoyed by the club paying wages well above the norm for the division.

A financial loss for a season was commonplace in Dave Whelan’s time as Latics owner. Despite the lucrative TV money coming in during the eight years they were in the Premier League the club only made a profit once. Whelan was the local benefactor who wrote off debt and enabled the club to live beyond its means. 

When Whelan sold to IEC in November 2018 the club was already on the way making a significant loss for the season, as it sought to consolidate in the Championship. The £9.2m loss for the 2018-19 was largely down to a salary bill of £19.4 to achieve an 18th place position in the league table. Despite the loss IEC continued to loan funds to the club, with somewhere close to £10m spent on signing Jamal Lowe, Kieffer Moore, Antonee Robinson and Joe Williams in the summer of 2019. We will probably ever know the ins and outs of the takeover by Next Leader Fund in June 2020 and why the club was put into administration, but a loan of over £24m from IEC to the club was written off in the process.

Faced with a significant financial loss in their first full season of ownership Phoenix 2021 trod cautiously in the transfer market in the summer of 2022. Ryan Nyambe was acquired as a free agent and Anthony Scully was signed from Lincoln City for an undisclosed fee. With so many  players recruited on long term contracts the previous summer the squad was largely going to be that of the previous season. With the momentum of winning League 1 behind them, they started fairly well. However, the physical long-ball approach that had enabled them to do well in the third tier was not going to be successful against the more sophisticated opposition in the Championship. The alarm bells were already ringing when Leam Richardson was given a new three-year contract, only for him to be sacked weeks later, after winning only one of the last ten home games.

The appointment of Kolo Toure was at best ambitious, at worst naive. The team’s performances in Toure’s first two games – a draw at Charlton and a narrow home defeat by high-flying Sheffield United – showed some promise as the manager encouraged his players to be “brave on the ball”, veering away from the long ball strategy. However, major defensive lapses saw results take a major turn for the worse and the manager was sacked after 59 days with no wins in 9 games.

Shaun Maloney was appointed in late January. His record up to this point is W1D6L3. Maloney has impressed fans with his eloquence, openness and realistic approach. He has talked of improvement in both boxes and he has tightened up a defence that had leaked so many goals before his arrival. However, the attacking aspect is in need of considerable improvement. Al Hammad commented in his statement that:

 “Shaun and his staff have worked relentlessly since he was appointed and we have all seen in the last few weeks the improvement in both the team and individuals. The connection between the manager, players and fans is back and this progress is the first step in our long-term journey together. He has my and the Board’s full support.”

Mistakes have certainly been made that have proved very costly. Richardson and Toure and their associated staff will need to be paid off and the club now faces a return to League 1. Al Hammad has stated his view that the club needs to be financially responsible, operating within its means. This is a different approach to that of the Whelan/Sharpe/IEC eras.

The financial balance sheet for this season will show another considerable loss, but can Al Hammad get close to balancing the books next season? What steps will he have to take to do so?

The first step is to reduce costs by shedding players on relatively large salaries. There are 10 players whose contracts expire in June, along with 5 on loan from other clubs. That leaves 14 who remain under contract. They are:

Defenders: Charlie Hughes, Jason Kerr, Tom Pearce, Jack Whatmough

Central Midfield: Tom Naylor, Graeme Shinnie

Wingers/creative: Thelo Aasgaard, Jordan Jones, Callum Lang, Jamie McGrath, Anthony Scully

Centre forwards: Stephen Humphrys, Josh Magennis, Charlie Wyke

The board will set a budget for the coming season and Maloney will need to work within it. Some of the players whose contracts run out in June may yet be offered extensions, although on reduced terms. The highest earners of those still under contract may be urged to move on or sent on loan to reduce costs.

Talal Al Hammad’s statement has been welcomed by so many fans who were seeking clarity as to the stability and direction of the club. However, there are those who have come to expect the club to have a benevolent owner in the mould of Dave Whelan, enabling to punch above its financial weight. There are others who are angry at the board for the late payments of players, incurring a points penalty making the chances of avoiding relegation become smaller still.

Al Hammad will be visiting Wigan in the coming week in an attempt to rebuild trust with stakeholders and the wider community. It is an unenviable task that he has ahead of him.

With a period of austerity coming up at the club there will be fans who will not accept the situation and attendances will drop. However, most fans will accept that if the club continues to be run like it has in the past there is always a risk of amassing great debt and subsequent liquidation.

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

Posted by JJ (Tony) in Financial, Specials and tagged with , , ,

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?

Wigan Athletic: why is there still so much uncertainty?

Posted by JJ (Tony) in Financial, Specials and tagged with , , , ,

The uncertainty about the future of Wigan Athletic has posed a challenge for us all: both supporters and those within the club. The message boards and social media have been awash with concerns about the impending takeover with performances on the field of play getting progressively worse. The loss to Chorley was a bitter pill to swallow and the probability that John Sheridan will be taking over at Swindon this week adds to the uncertainty that prevails.

Last night I had watched an excellent first half performance at Tranmere by the youngest side in memory fielded by Wigan Athletic. They scored two cracking goals: a Will Keane header from a cross by Tom Pearce and a rasping drive from outside the box by the 18-year-old Charlie McHugh. The performance was slightly tainted by a schoolboy error that gifted the home team a goal, but the level of movement and accuracy of passing was way above what we have seen in recent weeks. During the half time interval I checked Twitter to see if anyone had posted an opinion on the game so far.

However, the tweets from Latics fans were almost exclusively related to a communique from the EFL regarding the takeover. They once again indicated the concerns of the fans over the stalling of the takeover process that the EFL need to ratify.

The conspiracy theories suggested that the Garrido group’s bid was contingent on Supporters Club (SC) funds helping them to meet the asking price for buying the club. Another train of thought was that the EFL was being careful to be seen that it is doing due diligence and did not want to exclude the possibility of supporter representation on a new board of directors. The cynical line was that the EFL will do whatever it can to make things difficult for Latics.

Discerning the truth of what is happening is very difficult. However, communications over the past couple of months provide some indicators.

On September 30 the SC indicated that:

“We are pleased to share the news that an unnamed bidder has now progressed to the next stage of exclusivity with the joint administrators. Although there remains a long way to go in this process, the Supporters Club has made contact with the bidder and we are currently in discussions regarding the future involvement of the supporters at Wigan Athletic, should their bid be successful.”

On the same day the administrators stated that:

“We are pleased to announce that we have reached agreement with a preferred bidder from Spain. The offer that has been accepted deals with not only the sale of the club but also allows the payment to non-football creditors to avoid the 15-point penalty this season. In addition, a substantial deposit has been received. We are now working with our lawyers and the bidder to produce all of the necessary paperwork to submit to the EFL so that successful transfer of the football share can be made at the earliest opportunity. The preferred bidder who has experience in football has made it plain that they do not wish for their details to be made public until such time as the sale is completed and we are respecting this anonymity. No further details will be released until EFL approval has been obtained.”

Over the next month the paperwork was being put together by the bidders and administrators, although no definitive statement arose regarding the use of the crowdfunder monies in the Spanish consortium’s bid.

The Garrido group representatives and the administrators were to meet with the EFL to clarify the takeover bid on November 3. However, on that same day the SC put out another communique indicating that the bidders had invited them to invest crowdfunder monies as part of the bidder’s purchase of the club but that they felt “unable to move forward with the proposed deal at this time.”

The SC had met with the EFL on October 29, being advised on November 2 that afinal decision was needed regarding the investment by no later than 12noon on Tuesday 3rd November. They added:” The timescales have been insufficient to enable us to investigate the outcomes of that meeting and to hold the proper discussions with our wider committee.”

The SC also stated that:

“We are keen to invest the funds in order to secure equity in Wigan Athletic and a voice for the supporters. However, we must be sure that the proposed bidders have the wherewithal to purchase and fund the operations of the club and stadium successfully independently of our funds based on acceptable financial forecasts. We have been assured by the bidders that this is the case, however we feel it is important that proof of sufficient funds is confirmed by the EFL prior to any supporters’ funding being committed.”

Given these statements it appears that the Garrido group and the administrators went to meet the EFL on November 3 knowing that they could not count on the crowdfunding monies could be used in the purchase of the club. They would have gone into the meeting knowing that they had to provide sufficient proof of funding in their own right for the takeover to be confirmed.

Prior to the EFL communications yesterday evening the administrators had issued an update on the club’s site:

“We have not as yet had a final decision from the EFL regarding the transfer of the Football Share. Both the bidders and ourselves together with our legal team have had regular and ongoing discussions with the EFL regarding their requirements.  Our exclusivity agreement with the bidders, which runs out on the 11th November, has been extended for a further period to try and ensure that we reach a satisfactory conclusion. At this stage we cannot say when that will be as matters rest with the EFL. Whilst we fully understand the fans frustration and the effect generally on the club we must adhere to the procedures set down if we are to be successful.”

The exclusivity agreement has been extended to allow further time for the bidders and administrators to iron out what the EFL describes as “outstanding issues” that need to be resolved.

Jose Miguel Garrido has made his intentions clear through the local press as to what to expect if the takeover is approved. Some fans brought up in the days of the Premier League and Dave Whelan’s patrimony might be less than enthusiastic about the takeover by the Spanish consortium. The club would not rack up the debts that were incurred in recent years in the reigns of David Sharpe and Darren Royle. Money would be invested but with caution, with some £4m-£5m invested into the academy over a period of years to bring it to category 1 status.

For those fans who are concerned about the long-term sustainability of the club Garrido’s plans have great credibility. Latics could remain in the lower divisions for some years. In order to get out of League 1 on the last two attempts the club put itself in financial difficulties through paying player salaries that were hugely disproportionate to the norm in the third tier. However, if the academy continues to grow and a manager is appointed who will nurture young players the club can more than make ends meet.

Let’s hope that this saga ends up in a more satisfactory end result than what happened at Prenton Park last night where we witnessed a penalty shootout in which both teams performed as poorly as I can remember. The final shootout in the takeover proceedings needs to go in Wigan Athletic’s favour!

The turnover continues: will Latics have a 20-goal striker this season?

Posted by JJ (Tony) in Financial, Reflections, Social Media and tagged with , , ,

It was not Alan Nixon this time, but another journalist putting the cat among the pigeons on Twitter. Wilson Whitefield’s tweets certainly caught the imaginations of both Wigan Athletic and Queens Park Rangers fans.

Twitter comments can certainly be controversial. Sometimes their statements never come to fruition, but sometimes they can prove to be accurate. We await confirmation from the club regarding the veracity of Whitefield’s comments.

A couple of years ago Gary Caldwell signed a 20 goal per season striker in Will Grigg. Grigg had done it at both Walsall and MK Dons and he was to do it again at Wigan in 2015-16, spearheading Latics’ League 1 title triumph. Omar Bogle exceeded the 20-goal mark last season. He scored 22 goals in 44 league appearances for Grimsby Town and Latics.

The more optimistic of Wigan Athletic fans have been relishing the prospect of both Bogle and Grigg being at the club this season, together with the hugely talented Nick Powell who can play either at centre forward or in midfield. The presence of the three would surely provide the momentum to push Latics back into the Championship

But economic factors cannot be ignored and the realists will say that at least two, or possibly all three of them, will be gone over the coming weeks. Put simply, despite the PR and propaganda that emanates from the club and local press, the huge drop in revenue due to relegation and loss of parachute payments will cause continued turnover at the club.

Both Grigg and Michael Jacobs are in the final years of their contracts. Latics could conceivably offer them contract extensions, but that could prove tricky not knowing which division the club will be in a year from now. An alternative is to cash in on their value in the transfer market this summer or in the January transfer window. Another option is to allow them to run their contracts down and decide on whether to offer them extensions later in the season. Being a proven goal scoring centre forward Grigg will continue to attract a considerable transfer fee, despite his disappointing season at Championship level. The likelihood is that he will be leaving in the coming weeks.

Powell is reputably the highest paid of the current squad and that added to his injury record would prove a very expensive luxury for a club looking to cut its budget by 60-70%. His inspiring cameo appearances at the end of last season certainly whetted our appetites, but his departure seems almost inevitable, providing he is fit.

So, given a scenario where Bogle, Grigg and Powell all leave, can we expect a centre forward of such qualities to come in and propel the promotion push?

The media rumours continue to link manager Cook to ex-players of his at Portsmouth. It seems that the signing of 34-year-old free agent Noel Hunt appears imminent. Hunt has scored 8 goals in 70 appearances over the past four years for Portsmouth, Ipswich and Leeds United. The names of Eion Doyle, Gary Roberts and Michael Smith have also been mentioned, together with Whitefield’s tweet about Chaplin.

In the meantime the turnover appears to be continuing with not only the speculation on Bogle, but the message below from Max Power that was tweeted in the last hour.

Despite the utterings of keeping the nucleus of the squad together on Paul Cook’s arrival it appears that this will hardly be the case.