These have been dark and gloomy Covid-19 months for EFL clubs, especially those in the lower tiers who are so much more reliant on gate money. Some financial support is coming in via the EFL and Premier League, but rumour suggests that several clubs are already close to folding.
For Wigan Athletic it has been particularly tough. Going under administration is difficult enough in normal times, but the pandemic has made it so much harder. Why would anyone want to buy a football club with no certainty of when gate receipts will once again underpin the finances of clubs like Latics?
But within the last couple of weeks there has been light showing at the end of the tunnel.
During that time the team has gained two consecutive victories over clubs not far from the top of the League 1 table. The wins have lifted Latics off the bottom, giving hope for what comes next. Moreover, the ownership issues are moving ahead, with Jose Miguel Garrido dropping out of the picture and Felipe Moreno seemingly the potential future owner. Given Moreno’s excellent record as an owner of a club in Spain and that his bid is being supported by the administrators, it is surely a matter of time until the takeover is ratified by the EFL.
The social media and noticeboards have been awash with debate over the Spanish bid and why the administrators have not taken away exclusivity, allowing other parties to bid. Tony Frampton’s interviews with the PWU Podcast and Jay Whittle were certainly seductive in terms of him being a Wiganer who is a director in a multinational company that has a large financial base. Some conspiracy theorists suggested that Frampton was an ally of Ian Lenagan, trying to get control of the football club to hep the rugby. Others thought that some of Frampton’s ideas were pie in the sky.
In the meantime, fans have started to warm to the idea of a Moreno takeover. Simple internet searches reveal the degree of success he has had since taking over Leganes, a relatively small club in the south western suburbs of Madrid.
Miller’s tweet was certainly uplifting. It was soon followed by a quality interview on “The Full Time Whittle” with Madrid-based journalist Sam Leveridge, detailing the achievements of Moreno and his wife, Maria Victoria Pavon, at Leganes:
Administrator Paul Stanley has said that he hopes the EFL stamp of approval will be given before Christmas. The sooner the better for Wigan Athletic with the January transfer window approaching.
The loans of Tom James, Darnell Johnson, Matty Palmer and Curtis Tilt are due to expire as are the short-term contracts of Dan Gardner, Will Keane and Viv Solomon-Otabor. Moreover, there are four players from last season’s senior squad whose contracts expire in June. Reports suggest that Kal Naismith is already interesting a couple of Championship clubs.
The sooner the takeover is ratified the better opportunity the club has of making the right decisions regarding contracts. The aim will be to put together a squad which has a backbone of experienced professionals, with continued opportunities for the under-23 squad players who have made so much progress over these months after being thrown in at the deep end.
Although Latics are still in the relegation zone they are not so far away from safety. So much will depend on what happens in that January window. But after such a gloomy period there is certainly light showing at the end of the tunnel.
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?
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!