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The sad story of Wigan

Wigan Athletic faced fundamental financial problems which have simply been accelerated by the pandemic.  

In November 2018 long-term funder of the club Dave Whelan sold the club to International Entertainment Corporation (IEC), a Hong Kong-based, Cayman Islands-registered company whose majority shareholder was Dr Choi Chiu Fui Stanley.   The sale price was £15.9m.

Last month the club was sold on to Next Leader Fund (NLF), another Hong Kong-based consortium of which Dr Choi was also the majority owner.  The price was £17.5m plus repayments of £24.36m that the company had invested in the club.

On June 24th Wai Kay Au Yeung, previously a minority shareholder in NLF, replaced Dr Choi as majority shareholder, since when funding of the Lactics appears to have been withdrawn.  The Hong Kong stock exchange was notified that the reason for the club's sale was its failure to reach the Premiership; Brexit uncertainty; and the suspension of football.

Wigan recorded a loss of £9.2m in 2018/19 despite a £7m profit from player sales.  By normal commercial standards, it was not a viable business.

Nevertheless, the timing was strange given that Wigan looked like to stay up and all clubs will receive a £2.3m advance solidarity payment from the Premier League.

Wigan's recent takeover passed the source and sufficiency test which measures the eligibility of owners rather than their capability.

Football finance guru Kieran Maguire has tweeted about 'Very strange loan agreement between IEC and Wigan Athletic for nearly £29m at 8% interest that rises to 20%.'

Former Charlton chief executive Peter Varney has called for a thorough review of the rules relating to the sale of football clubs: https://www.integralsportsmanagement.co.uk/fit-for-purpose/
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