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.

What did IEC achieve at Wigan Athletic?

The IEC announcement of the sale of Wigan Athletic to Next Leader Fund L.P. was certainly carefully worded. However, it provided a chilling overview of the task facing the new ownership.

The IEC purchase of the club from the Whelan family was finalised in November 2018, but a little over a year later they gave notice of their intention to sell-up.

IEC had provided a vision of Latics becoming a club which would make itself sustainable by the development of home-grown talent through the academy system. Although they were not going to throw huge amounts of money around in a frantic rush, they nevertheless hoped to get the club back into the Premier League over a period of years, providing prudent financial backing.

The investments made by IEC in improving the academy facilities signaled a rise to Category 2 status, providing the U18 and U23 teams a healthier environment against more challenging opposition. IEC supported a wage bill that was modest by Championship standards, but far outweighed the revenue coming in. Moreover, last summer they provided money for the transfer market for Latics to sign players whose combined market value would surely appreciate. Four were in their early to mid-twenties: Antonee Robinson (22), Tom Pearce (22), Joe Williams (23), Jamal Lowe (25). Kieffer Moore was 27. Robinson, Pearce and Williams had played at Championship level before. Lowe and Moore had not played above League 1 and would need time to adjust to playing in the higher division. IEC’s investments in those players appeared well-judged at the time.

In order to do the above IEC say they invested over £44m in total in Wigan Athletic.

A wealth of information on the process by which IEC dealt with the sale of the club, its assets and debts can be found in the Investor Relations section of the IEC website. However, the documents are by no means easy reading for the layman.

It appears that IEC sold their shares to Next Leader for £17.5m. According to the document entitled Completion of Major and Connected Transactions of May 29, 2020 a “loan” of £24.36m provided by IEC to the club was repaid to them:

“In accordance with the Sale and Purchase Agreement, upon Completion, the Company (as the lender) and the Club (as the borrower) entered into the Loan Agreement in an aggregate principal amount of GBP24.36 million (equivalent to approximately HK$232.08 million),and the Deed of Guarantee was also entered into by the Purchaser in favour of the Company along with the Loan Agreement. Details and background of the Loan Agreement and Deed of Guarantee are set out in the Circular. Immediately subsequent to the entering into of the Loan Agreement, the Pre-Existing Loan in the amount GBP24.36 million (equivalent to approximately HK$232.08 million) has been repaid to the Company, and as a result, the Club is no longer indebted to the Company.”

The period of ownership of Wigan Athletic by IEC was some 19 months, during which the club has been in the Championship division. In November 2018 when IEC took over Latics were struggling on the field of play. That continued until a 2-1 away win at Leeds in April 2019 sparked a revival that saw them escape the relegation zone. However, accounts published in June 2019 showed that the club had made a net loss of £9.2m, their eighth consecutive loss for the season.

Given the effect of Covid-19 on EFL clubs, lowered average attendances at the DW Stadium and an imbalance in transfer revenues we can expect the losses for the current season to be well above those incurred in 2018-19.

Having bought the club and its debts Next Leader will face a mountain of a task getting the finances of the club in good order.

Were IEC over-optimistic in expecting more on the field of play during their period of ownership? Given the budget that Paul Cook was presented compared with those of rival clubs last season’s placing of 18th in the Championship was by no means a failure. Perhaps IEC, like many fans, were more hopeful of an improved placing this season, given the net investments made in the transfer market last summer? This has been a disappointing season, although the rally in the last six games before the EFL suspended its fixtures provide a ray of hope.

The priority for the club now that the season is about to restart is to avoid relegation. If this were to happen the market values of “prized asset” players would plummet. An added complication is that with the financial hardships that clubs will be facing market transfer values can be expected to decrease over these coming months.

Next Leader must cash in on its main transfer assets to cut down the cumbersome debt that the club has accumulated. If the club plays in the Championship next season it must set its staffing budget at a sustainable level, well below the £19m mark it currently has. The injection of young players from the U23 squad would be a viable option. The likelihood would be that Latics would struggle to avoid relegation under such circumstances, but other clubs will also struggle in the impending financial crisis.

The very existence of the club will be under threat. We can only hope that Next Leader can stay the course and judiciously steer the club back on an even keel. Can that IEC dream of the club sustaining itself through the fruits of its academy and sound investments become a reality?

A critical time for Darren Royle and the IEC ownership

Will Darren Royle back Paul Cook? Photo courtesy of Wigan Athletic FC.

 

Another 3-0 home defeat and the social media and notice boards are laden with the comments of fans concerned that Wigan Athletic could suffer relegation once again unless something changes.  They have won only once in their last 13 league games and are now dangerously close to the drop zone.

 

 

Paul Cook’s post-match interview was a sad thing to witness. Some managers might shy away from a post match media conference after such a heavy defeat, but Cook once again stepped up to the plate. Things just have not been going well for the manager since mid-September.

Injuries have deprived him of his first-choice front four, the team subsequently lacking the cutting edge and creativity that we saw in the early weeks of the season. Michael Jacobs has been out since October 6, Nick Powell has not played since November 28 and in the weeks prior to that did not look to be one hundred percent fit. Will Grigg was unavailable for six weeks in October/November. Gavin Massey came back from a three-month absence on December 22, but suffered a serious recurrence of his hamstring injury on Saturday. Defensive lynchpin Chey Dunkley missed two months before returning to the team for the visit to West Bromwich on Boxing Day.

The takeover by IEC seemed to take for ever until it was eventually announced on November 7th. We hoped that, following the takeover, extended contracts would be finalised for key players whose current ones run out in June. But of those nine players in that situation only Sam Morsy’s case has been resolved.

Nick Powell is the most high-profile of those players:

The injuries and uncertainty surrounding the takeover surely have had an impact on the manager and his staff. Cook is not one to complain, but his situation over the past months has been less than satisfactory. What is happening at the club?

Whether the current situation is solely down to Cook is open to debate. But the standard of football has plummeted, and the manager has frustrated fans by rigidly sticking to certain players, sometimes playing them out of position, whilst snubbing others.  But despite these issues we at this site do not advocate sacking Paul Cook.

In mid-November 2014 Uwe Rosler was sacked with Latics in 22nd place in the Championship at the time with three wins from 17 games. Gary Caldwell suffered a similar fate in late October 2016 with Latics in 23rd place with two wins from 14 games. Their successors, Malky Mackay and Warren Joyce, were unable to stop the rot and relegation was the consequence. Although there are fans calling for Cook to be removed there are many who will cite the lessons of the past, fearing what might happen if that were to unfold.

Chairman Darren Royle is faced with a difficult decision regarding Cook’s position. It is compounded by the fact that the transfer window has reopened. If Royle backs Cook, giving him more time to turn things around, how will it affect player recruitment this coming month? If Cook were to be moved on some weeks from now any new manager would be saddled with his recruits.

Uwe Rosler’s downfall was largely brought about by his recruiting over the summer of 2014. So many of his new recruits just did not perform up to the standard expected. The German had done a wonderful job the previous season, after taking over from Owen Coyle in December 2013. He guided Latics to both the FA Cup semi-final and the Championship play-offs.

There are some parallels between Rosler and Cook. Cook too enjoyed considerable success in his first season, winning League 1 and going on an epic FA Cup run, with that stunning win over Manchester City. But his signings have met with mixed success.  Bringing in players who played under him at Portsmouth has not been particularly well received by fans.

Reports suggest that IEC made funds available to Latics for summer signings. Although the club does not usually disclose transfer fees the summer incomings probably amounted to around £6 m, whereas the fee received for Dan Burn’s transfer to Brighton was around £3 m. Cook spent most on Josh Windass (around £2m), Joe Garner (£1.2 m), Cedric Kipre (£1 m), Leonardo da Silva Lopes (£800,000) with Lee Evans being signed on January 1 (£800,000) after playing on a loan-to-buy agreement.  £6 m may be a small outgoing on transfers for most clubs in the Championship, but it is sizeable by Wigan standards. Critics say that Cook paid above market value for those players, some of whom have not impressed to date. It remains to be seen whether how much further cash will be speculated in January and if the Royles, Darren and Joe, will be the prime drivers in the recruitment process even if Cook stays.

Royle might well decide that he must sack Cook. If so, he will need a replacement to step in promptly before further recruitment is effected. A new manager would not only need to look at bringing in new players, but also at moving on others within the club to make space for the newcomers.

If Cook is given the backing of Royle and IEC we can only hope that he will select lineups with more positive intent, giving his players the chance to show their skills, not resorting to the hoofball that we have seen on too many occasions. It is the manager’s first season in charge of a Championship side and he is finding it tough. With adjustments due to be made to the squad during January he will have different options. In the meantime we have to assume that Cook has been reflecting on what he could have done better over these past months, despite the unavailability of players through injury and the uncertainties involved in a long and drawn-out takeover.

 

Thanks to all whose tweets are included above.

The importance of a Category 2 Academy for Royle and IEC

Last Saturday Wigan Athletic’s under-18 team strengthened their leadership of the EFL Youth Alliance Group B with a 2-0 win over Rochdale.

The first goal was scored by Scotland under-18 left back Luke Robinson with a beautifully struck free kick from well outside the penalty box. Another Scotland under-18 player, Kyle Joseph, got Wigan’s second with an opportunist tap-in. Wigan’s England under-17 striking sensation, Joe Gelhardt, did not play and his teammate at national level, Jensen Weir, came on after 88 minutes. Click here to see the highlights.

The Youth Alliance is effectively the third tier of U18 football. The Alliance consists of 49 teams divided into four groups on a geographical basis. The vast majority come from clubs in League 1 and League 2.

Although Gelhardt, Joseph, Robinson and Weir represent their countries at international level they are confined to the third tier of English youth football. They cannot play in the top tier Premier U18 League or in the second tier Professional Development League.

Over 23 years the Whelan family pumped in some £100m to keep Wigan afloat in the higher levels of English football. Like so many football clubs in the country, Wigan Athletic have rarely been able to accumulate enough revenue to exceed their outgoings. Put simply, the Whelans have had to constantly subsidise the club for it to punch above its weight.

Despite eight years in the Premier League and an FA Cup win, Latics still have a small fan base compared with most clubs in the Championship division. In order to keep the fan base that they have it has been necessary to keep ticket costs that a level that has been economically unfavourable for the club. Moreover, commercial revenues have been low compared with other clubs in the upper tiers.

The IEC, through the guidance of executive chairman, Darren Royle, will surely look at increasing commercial revenues. Royle will review season ticket prices in due course, but even a 20% increase in prices would not bring the club anywhere near to breaking even, let alone risk reducing the fan base. The club is basically a loss maker, as are the majority in the Championship with wages exceeding revenues. Barring significant sums coming in over the January transfer window Latics will lose in excess of £10m in the current season, in an attempt to consolidate in the division.

Royle has set his sights on a return to the Premier League for the club, although he has not given any kind of timeline for it. His strategy is based on building a strong academy which can provide a constant stream of players for the first team. The first step is investing in the kinds of facilities and programmes that can elevate the Wigan Athletic academy to Category 2 status rather than the current Category 3.

There are 7 Championship clubs that have their youth teams in the Premier U18 League, that which consists of clubs with Category 1 academies.  Another 12 of them participate in the Professional Development League from clubs with Category 2 academies.

Should Latics gain Category 2 status they would be largely joining clubs whose senior sides are in the Premier League or the Championship. But it is to be noted that League 1 clubs Barnsley, Charlton Athletic, Coventry City, together with League 2 Colchester United and Crewe Alexandra also compete at that level.

There can be no doubt that Wigan’s talented youngsters would benefit from playing at a higher level that of the Youth Alliance. The move towards Category 2 status is to be commended. However, so often in recent years the club has had exciting young players whose development has been limited by lack of opportunity within the club. So many have fallen by the wayside.

Critics will say that the club has so often nurtured young players on loan from upper tier clubs at the expense of its homegrown talent. It is something that Royle will need to look at in terms of not only developing homegrown youth, but as a part of overall recruitment policy.

Jensen Weir (left) and Joe Gelhardt.
Photo courtesy of skysports.com

 

Where will the likes of Gelhardt and Weir be some five years from now?

Let’s hope they too don’t fall by the wayside.

 

 

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