A debt-free fresh start for Latics?

Why did Au Yeung Wai Kay waive his rights to the £25.3m “loan”?

We may never know the real reason but there is no shortage of opinions from Latics fans on the social media, with conspiracy theories abounding. But whatever the reason it is great news for the survival of the club.

There remains a £6m debt to be paid off to football creditors and another £4m to non-football creditors. To avoid a 15-point deduction for the coming season Latics need to pay the football creditors in full and pay 25% of the other £4m.

When the change of ownership is completed the administrators will need to be paid off and a figure around £2m could be needed.

There has been consternation among some fans regarding the fire sale that we have seen in recent weeks. Three outstanding youth players were sold off, ifollowed by regular first team starters Kieffer Moore, David Marshall, Antonee Robinson and Joe Williams. Sheffield Wednesday’s purchase of Joss Windass was no surprise, given that he had been on loan there. However, although those players have been released for sums well below their normal market values, the combined revenues will go a long way towards paying off the creditors.

The fire sale may well continue until the ownership issue is resolved. With the debt much reduced than it was a couple of weeks ago the club is now a more attractive package for purchase. However, although five major earners have departed there will need to be more shed if the wage bill is to be commensurate with the division Latics find themselves in.

There have been rumours of other clubs interested in Cedric Kipre and Jamal Lowe. However, it remains to be seen whether the administrators would sell them off in the current buyers’ market or if they would allow the future owners to make such a decision. If a new owner were to come in and continue to fund the wage bill in the short-term it would allow them more time to get better fees for assets yet to be sold off. The administrators have needed ready cash to pay off the club’s debts, rather than following the usual route of transfer fees being received in instalments. Selling any further player contracts by means of instalments would surely provide a higher return and money coming in during the future.

Once the ownership issue is dealt with Latics can expect revenue coming in from the EFL and instalment payments due to them from previous player sales.

It remains to be seen what Latics and other clubs will do about season tickets and televising of matches. Reports suggest that fans will be welcomed back in October but with stadium capacity reduced to 25%.  The capacity of the DW Stadium is listed at 25,138 meaning they would be allowed to accommodate just less than 6,300, a figure close to the number of season tickets they have sold in recent years. However, the new rules are unlikely to include away supporters who pay at a higher rate per game than season ticket owners. Revenues will be relatively small, but at least there will be some money coming into the club.

The UK economy is in recession and football clubs, like other businesses, will be under pressure. More football clubs will most likely go into liquidation over the coming months.

The Swiss Ramble figures for 2018-19 show Wigan Athletic with a lower gross debt – £21m – than most Championship clubs, being dwarfed by the £142m of Blackburn Rovers. Given the recent actions of the administrators that debt is being reduced.

Some clubs are under benevolent ownership, as were Wigan Athletic to a large degree under Dave Whelan. Other clubs have owners willing to allow a club to go into considerable debt in search of a potential Premier League pay off. It is a dangerous path that is being followed by so many clubs.

During the coming week we most likely learn that Wigan Athletic have new owners. Whoever it is they will be taking over a club that has lower debts than many. Following the rocky period that the club has been through in recent months there is a need for stability and a long-term plan sustainability. Let us hope the new owners will be able to provide those things.