Wednesday's woes on hold for now
Companies Court at the is a gloomy place at the best of times and really depressing the day it deals with the winding-up list.
Hundreds of businesses are consigned to the dustbin in a matter of hours and behind each failure is a story of bad luck, broken promises and dodgy decision-making.
In that regard, are no different to the fading firms, ill-fated enterprises and assorted Del Boys they shared a trench with on Wednesday.
But a club with 143 years of history, one of football's most famous grounds and a loyal fan base in England's fourth largest city should never darken these doors.
So how did it get this bad?
This isn't the blog to provide a full analysis of how an institution that spent came to find itself on the brink of doom but I can shed some light on the most recent chapter.
I'm not going to start with . My story starts last week when club officials were presented with the first serious offer to rescue Wednesday from their current crisis.
"Serious" is the key word here because unlike the numerous would-be saviours who had linked themselves with the Owls in recent months, had actual cash in a real bank account.
The 72-year-old might not be everybody's cup of tea - Wednesday chairman Howard Wilkinson also chairs the League Managers Association, - but his plan had its backers.
Foremost among them was the , Wednesday's largest creditor. Owed £23.5m and counting, the firm cannot extricate itself from football fast enough and was willing to take just £7m from Mandaric to walk away.
The former Portsmouth owner and had also agreed deals with four of the six men, all current or former directors at Hillsborough, holding loan notes against the club. Unfortunately for Mandaric, the two not onboard were the most important: Dave Allen and Mick Wright.
In order to see this content you need to have both Javascript enabled and Flash installed. Visit µþµþ°äÌý°Â±ð²ú·É¾±²õ±ð for full instructions. If you're reading via RSS, you'll need to visit the blog to access this content.
Allen, the majority shareholder at Chesterfield, is owed £2.4m by the club he served as chairman for . Like the Co-op, he is willing to take a haircut but doesn't want a scalping. That is what he claims he was offered - a one-off payment of £300,000, not the three instalments of £500,000 he thinks is fair.
To the outsider, this looked like a case of high stakes poker between two old card sharps. To the insiders at the Co-op, watching through their fingers, this looked like recklessness.
Wright's reaction to Mandaric's overtures was harder to gauge. Some suggested he was willing to take the same discount on his £800,000 debt as the rest of the creditors, bar Allen. But more canny observers realised he was playing a different game.
The boss of a quintessentially Sheffield firm, steel company, Wright and partners were formulating their own plan to buy Wednesday.
Good, you might think, two bids are better than one. And in Wednesday's case it was better than that. There appeared to be as many as five options on the table last week.
Former Owls goalkeeper and manager Chris Turner was still talking up the Middle East-based group he had been , club sources were claiming there was a different consortium from that region in the running, while there was also a second group of local businessmen trying to resurrect their .
By Tuesday, the five had become four - Turner's group melting away - with the two local groups, Wright's and Wednesday Forward, leading the way. But any chance of a deal to head off the date with HM Revenue & Customs, the club's most dangerous creditor, had long passed.
With the Co-op adamant it would not bale them out again, Wednesday had only two real options: persuade the court to give them more time or opt for the bankruptcy protection that administration provides.
Which brings us to events in Court 55.
The taxman's battles with football have been a bountiful source of material for this blog so I will keep it short: HMRC does not like being messed about by "companies" which appear to be running expensive operations whilst failing to pay taxes.
This week's winding-up petition was the third the taxman has issued to Wednesday in five months. The first was rolled over and with a "this really is it" cheque of £1.1m. But the problem with tax is that it keeps coming.
In order to see this content you need to have both Javascript enabled and Flash installed. Visit µþµþ°äÌý°Â±ð²ú·É¾±²õ±ð for full instructions. If you're reading via RSS, you'll need to visit the blog to access this content.
So two months later, Wednesday are back in court owing £600,000, although by this stage it isn't even that amount. It is actually £1.4m because of interest, late-payment penalties and VAT.
So it was on a sticky wicket that the club's barrister opened proceedings with a request for a 28-day adjournment to enable the club to pursue talks with a group of local businessmen. Suddenly, the two leading bids had become one.
HMRC's barrister ignored this revelation, ploughed straight on with Wednesday's history of tax avoidance and asked the judge to give the club a choice of administration or liquidation. The Co-op barrister then popped up to say that if the judge was leaning towards the latter then an administrator had already been lined up.
The club's lawyer interrupted this worrying narrative with her second surprise. She suggested her HMRC counterpart wasn't fully apprised of the facts, otherwise she would know the club had spoken to a higher-up at the tax office who had sanctioned their adjournment request. At this point, the judge said "erm, this sounds complicated, let's continue after lunch" or words to that effect.
What happened next was, in the context of Companies Court, dramatic. The Co-op lawyer was double-booked after lunch (I'm not making this up) so Mr Registrar Jacques agreed to press on.
This interlude gave the club's barrister enough time to kick the shins of the Co-op barrister, who now changed her tune to say the bank was supporting the request for an adjournment. HMRC's barrister, meanwhile, had checked with the office and discovered there was no late change to her brief - she should continue to say "no".
The Co-op's support, however, was the clincher for Jacques. but only under the "exceptional circumstances" of the takeover talks and main creditor's patience.
He underlined this point with a statement as chilling as anything I heard during the Portsmouth debacle: "You are clearly trading insolvently and you are very probably doing so using HMRC money." HMRC's money is our money. Once this perception of your behaviour takes root, you do not need a judge to say this is your last stay of execution.
Wednesday's chief executive Nick Parker was a shaken man when he spoke to the press outside the court. He said he was angry with the charlatans and time wasters who had brought the club to this precipice and urged those angling for a better pay-out to put aside their selfish agenda and work for the greater good. Most of all, he just said he never, ever wanted to be put through that experience again.
around the world will know how he feels.
Hi, I'm Matt Slater and I try to shed light on what's happening behind the scenes in sport - so everything from football finance to Olympic squabbles. You can also follow me on . 
Comment number 1.
At 18th Nov 2010, MILAN THE MANDARIC AND HIS MEGA GINGER WIG wrote:Great article Mat.
What has happened to a club the size of Wednesday is unbelivable. Also, the way it has been run over the last 15 years or so by these people is an embarrasment to football, and the selfish, money mad dinosaurs, esp Dave Allen are simply preventing this wonderful club the chance to move on and prosper under the likes of Mandaric and our supporters the chance to support a healthy run club and challenge for the top flight again and bring back the days of the early to mid ninties, abeit not making the same mistakes again financially!!
Complain about this comment (Comment number 1)
Comment number 2.
At 18th Nov 2010, Toby wrote:Since when has has Sheffield been the EIGHTH largest city in England - get your facts straight it's clearly the fourth!
Complain about this comment (Comment number 2)
Comment number 3.
At 18th Nov 2010, yoshik wrote:There is no difference between this situation and that of Pompey. Unless there is an immediate buy out or substantial injection then administration must follow, and then the FL repercussions can kick in.
Would be interesting to compare the attitude adopted by football to The Owls in comparison to that displayed by the PL to Pompey. Consistency? I doubt it.
Complain about this comment (Comment number 3)
Comment number 4.
At 18th Nov 2010, Rich_Owl wrote:Yoshik - the Pompey problems were a little more complicated. Firstly the league can do very little to us at the moment as we haven't entered administration - we have a transfer embargo in place but that's pretty much all they can do. I believe that Pompeys situation was also complicated over a discrepancy over how much they owed HMRC as that made a difference as to whether the tax man could block an exit from administration.
If (when) we do go into I'm sure the league will hammer us....
Matt - thanks for the succinct if rather deperessing summing up. Any indication whether the Spencer Fearn or Mick Wright bids are anywhere near gaining the support of the Co-op bank? Rumour has it that these are cash injection, rather than agreements to 'pay off' the debt.
Complain about this comment (Comment number 4)
Comment number 5.
At 18th Nov 2010, JoC wrote:Matt, what actually caused Weds to be in such trouble - clubs have always suffered relegations through the years - why weren't they paying their tax bills? Was money still being paid out to directors, management and players?
It's incredible to think how the Sheikh Mansour's of this World spend a fortune on individual and often 'average' players when for a fraction of the price they can acquire an historic club (in England's 4th major city) for a fraction of just one of the fees.
Are the problems due to the lack of transfers of players from lower division clubs to the Premier League? Have Weds no Theo Walcotts on their books?
Complain about this comment (Comment number 5)
Comment number 6.
At 18th Nov 2010, Hasthagotanycheese wrote:Great Blog Matt and thanks for the Twitter feeds yesterday.
As a small shareholder and fan, my take on it is that we will be back here again on 1st December probably going into administration. Another few days is not going to change anything amongst the loan note holders who have had Wednesday in a death grip for many years now. What we are seeing here is a game of high stakes poker between large net worth individuals whose ego's will not let them take a hit on their investments and have been prepared to allow Wednesdays previous good reputation to be dragged through the mud by their belief that they are in a position to dictate terms over the level of their losses.
In terms of the bidding parties, I think that any success by Mick Wright's group would be met with fury by the majority of Owls fans who know that this man is an ex director who has been allowed to sit in on board meetings over the last few years yet done nothing to prevent this sad situation. He is also tainted by his association with the current board. The Fearn bid while probably well intentioned, just does not appear to have the financial clout to really move the club forward in the coming years and I believe that we would be back to square one in a couple of years time with him. To me, the man holding all the aces is Mandaric for the following reasons: He has just banked £40 million from the sale of Leicester so funds wont be a problem, he has satisfied our major creditor the Coop Bank with his offer, he has no previous association to the shambles that is Wednesdays Board. The majority of Wednesday fans would love to see him shaft Mr Allen (financially) after the former Chairman referred to some fans as cretinous and tried to take some of them through the courts over comments on message boards.
While MM is not everybody's cup of tea he is an extremely sharp operator who knows how to run a football club and I hope that the board & loan holders have met their match in him, only time will tell. The Coop need to work closely with MM to really bring pressure to bear on the stubborn loan note holders to accept something that is for the good of the club, not themselves.
Wednesday fans have had a belly full of this badly written soap opera over the last 10-15 years and just want their club back so that they can start to think about football again and not boardroom and ownership issues. After all this is over, it will be interesting to see if any formal proceedings are taken against the directors for the criminal offence of operating an insolvent company (as stated by the judge), that is one court case that I am sure that lots of Wednesdayites would just love to attend.
Complain about this comment (Comment number 6)
Comment number 7.
At 18th Nov 2010, carlosthemagician wrote:Hang on, who's telling the truth here? Either the Wednesday barrister or the HMRC are hiding something. Either someone high up in HMRC sanctioned an adjournment or they didn't. If they didn't then this should not have been used in court to buy time by the Wednesday barrister, allowing her to "collude" with the Co-Op barrister during the interlude.
Sounds like a continuation of the unprofessional way the club has been run, which is why it's in this mess.
As a Blade I really hope Wednesday survive, Sheffield needs two clubs - and besides "Sheffield's Only One" doesn't have the same ring as "Sheffield's Number One". However, it's time football started to be brought back into the real world, it's a shame a Sheffield club has to be the one to do it... I hope for their sake they've realised that you can't play games with the HMRC.
Complain about this comment (Comment number 7)
Comment number 8.
At 18th Nov 2010, Owl111 wrote:@ no.5-
The debt built up when we spent beyond our means in the late 90's to try and sustain the success of the early 90's. Unfortunately most of our signings were complete flops. Coupled with a succession of poor managers, this lead to relegation in 2000. We were then paying loads of shocking players premier league wages in thesecond division.
Our recent tax problems probably come due to our former chairman Lee strafford spending money at the start of last season. Unfortunately, our directors hadn't told him about a £1.5m shortfall in te finances. This, coupled with the revenue loss from relegation has led jus to the problems at the moment.
Complain about this comment (Comment number 8)
Comment number 9.
At 18th Nov 2010, John Thompson wrote:There is a very easy way to get rid of the dross who are running our club.
Legal rules state that where directors of a company continue to let it trade whilst knowing it is insolvent - then they will be personally liable for the debts incurred during that period.
OK so let HMRC take the Directors to court and get the money out of them!
Im sure they would all jump ship as soon as they could.
Complain about this comment (Comment number 9)
Comment number 10.
At 18th Nov 2010, oxonowl wrote:Good article (except the glaring "England's eighth largest city" error ). Very interesting.
I just hope "those who know who they are" stop messing about, doa deal and move our club forward and back to where we should be.
Complain about this comment (Comment number 10)
Comment number 11.
At 18th Nov 2010, timawells wrote:Comment 2
Totally agree with you. Only London, Birmingham and one other city is bigger than Sheffield. That is why it is so embarassing, that no Sheffield club has won the Premier division since 1929/1930 and football is in such a state in the City. Didn't we also invent the modern day rules for football.
Complain about this comment (Comment number 11)
Comment number 12.
At 18th Nov 2010, Rich_Owl wrote:#s 5 and 8. An additional on the reign of Lee Strafford. He did many good things for the club in the short time he was in change, but he was spending on a business plan which relied on average gates of 24,000 which we haven't got for years (whether this was in the knowledge of or the cause of the fabled mystery £1.5m shortfall is contested between Strafford and finance director Bob Grierson) and in the hope and expectation of finding investment. We were breaking even and paying our taxes before LS. Under his stewardship our outgoings went up as Lee tried to improve the club structure (purchase of Prozone, web-based ticket office, donation of shirt sponsorship to the Childrens Hospital) and increase cash flow by selling season tickets in the middle of the season (it's usualy the money from ST sales over the summer that keeps a club cash flow going) while the quality of football and attendances remained static and no investment was sought. That was enough for us to go from breaking even to making a small loss. Relegation to League 1 financially finished the job off.
Complain about this comment (Comment number 12)
Comment number 13.
At 18th Nov 2010, SalisburyOwl wrote:Matt
That's a great summing up and thanks for the Twitter feed yesterday. I don't think I've ever been so nervous. The sooner this gets sorted out the better, either stop messing about and take the haircut on loan notes or stop messing about and get the 10 point deduction over with. I'd rather lose 10 points now when we can get them back on the pitch than in March when we can't.
Complain about this comment (Comment number 13)
Comment number 14.
At 18th Nov 2010, Owl111 wrote:@ no. 12
On the shirt sponsorship issue- due to the sponsorship, we sold way more shirts than we would have done. I don't the exact figures, but i wouldn't be suprised if the extra shirt sales brought in just as much money as we would have got from a coventional sponsorship deal.
Complain about this comment (Comment number 14)
Comment number 15.
At 18th Nov 2010, uncle_adolph wrote:It's been bl**y awful being a Wednesday fan over the last few days....mind you the last few years haven't been much good!
It's interesting to me that whilst Mandaric has come up with an offer acceptable to both the bank and all but two loan note holders the club do not seem to be involved in talks with him. The guy has the cash, which is more than can be said for most of these groups, a deal with him would obviously avoid administration and clear the debt and let Wednesday get back to football but the club seem happy to let him drop out. Why? You would have thought in the circumstances that Wednesday would be biting his hand off. Obviously there's more to this than meets the eye and I would be interested in your views.
Also....Allen has a £1.5 million loan (the £2.4 million quoted includes interest) and about 10% of the shares though I suppose these are pretty worthless. Nonetheless he clearly still wields considerable influence in whatever happens to Wednesday. How does this sit with his chairmanship of Chesterfield?
Complain about this comment (Comment number 15)
Comment number 16.
At 18th Nov 2010, EarlsfieldOwl wrote:Unfortunately I don't think Mandaric is going to come through now. IMO it will be one of the Consortia which will win through, neither of who I want. I don't want Wright any where near the place, far to closely liked to the club and the current Board. They will probably cut a deal with him as it will keep them in control which reallty worries me, plus it is unknown as to how much money he really has.
I don't think the other Consortia has the financial muscle to make a difference which will creat a whole new set of problems. Cash injections are no good at this point - only a full takeover is the solution.
Mandaric is the only person who can solve this, clear out the dross and give us the clean slte we so badly need. I just pray he has the patience and the desire to see this through, however dealing with Allen etc has probably put him off.
its very worrying and sadly I don't see much changing before the next deadline. If it not sorted by then, Admin is nailed on.
Complain about this comment (Comment number 16)
Comment number 17.
At 18th Nov 2010, FirthParkOwlsS5 wrote:Matt, thanks for a great blog. Straight to the point, & gives us the facts of yesterday in simple terms (at times listening to different news stories it didn't make sense what had happened when the co-op said they had 2 administrators ready)!!
There is a lot of different opinions on Dave Allen as a person & as a chairman. I can't judge him as a person because I don't know him. However, trying to sue his own supporters while chairman has to be a low point in not just Wednesdays history, but also English footballs. It is worth noting that one fan was seriously ill in hospital at this time (& Allen was fully aware of this). Which brings me to my point; If Wednesday go into Administration, I am right that he will receive nothing? Why did he not take the £300k & put it all behind him? I believe it is personal with Allen & Wednesday now. He was on radio this week saying that it was almost a forgone conclusion that we would enter administration. In my eyes, the only reason he wouldn't take an offer from someone who could save us, is that he doesn't want us saved! I would be very interested to see what would happen if someone did offer him the money he SAYS he will accept.
For the record, I don't think he did a particularly bad job while chairman on the footballing side. With him in charge we nearly made the Championship play offs. We can only dream of being there now!!
I would never, ever think that a club is too big to go into administration. The fact that Le*ds who played in The Champions League only 9-10 years ago went into administration means that no one is, or can be safe.
Sheffield Wednesday Football Club is an institution, & Sheffield is a fantastic footballing city that deserves to great clubs. 90% are either red or blue, the other 10% are indifferent or confused.
I come from a family of Wednesdayites. My Dad is a Wednesdayite, his Dad was a Wednesdayite, My Uncles, cousins & their kids are Wednesdayites. Even our lass & her family are Wednesdayites (I couldn't marry into a Blunt clan). We deserve far better. We sell out away at Plymouth, Yeovil, Hartlepool et all. I would like to think that supporters of clubs look forward to our visit, as we tend to create a carnival atmosphere & get the best out of the home crowds.
If Dave, Milan or anyone else is reading this, PLEASE get your heads together & work out a deal that will save one of the oldest, & one of the best clubs in the country.
If not, we will have to create an FC Wednesday of Sheffield. Because Sheffield Wednesday 'will never die'.
Complain about this comment (Comment number 17)
Comment number 18.
At 18th Nov 2010, martin3647 wrote:Good article but unfortunately one glaring ommission being the role played by Dave Richards in the decline of SWFC. The current position can only be seen in the context of the history of the club and not merely at this point in time.
Complain about this comment (Comment number 18)
Comment number 19.
At 18th Nov 2010, Jason Shutt wrote:Thank you martin3647. I can't believe the deafening silence coming from the Dave Richards camp in all this. He screwed us and then disappeared off to his nice little job with the FA and where have we been since then?? Right in the s**t.
Complain about this comment (Comment number 19)
Comment number 20.
At 18th Nov 2010, SwindonLad wrote:The problems at wednesday are the clubs own making. As a business they should fold now, the taxpayers should not be financially supporting football clubs, the whole of football should have a business plan to sort this mess out, real regulations need to be put in place.
Wednesday are NOT a big club, the last time they had a season averaged over 30,000 was 1968!!
That may be the problem, they are trying to be bigger than they actually are.
Sheffield has two clubs, they should merge and pool their resources, then they may become a real force in the English game.
Complain about this comment (Comment number 20)
Comment number 21.
At 18th Nov 2010, Jason Shutt wrote:SwindonLad - I suggest you don't post anything unless you have something productive to say. Why don't Swindon merge with Bristol...
Complain about this comment (Comment number 21)
Comment number 22.
At 18th Nov 2010, uncle_adolph wrote:SwindonLad.....perhaps you could remind us of Swindon Town's financial history over the last twenty years or so....
FPOwl.....I think you are absolutely right about Allen. He dealt with the business side at SW very well whilst he was chairman but so far as PR is concerned he was an absolute disaster, a total embarrassment and a bully. He is being totally unrealistic in expecting to get his loan back in full; you have to appreciate that this is a failed business and he has to accept a haircut like everyone else. He doesn't need the money however so clearly he has ulterior motives in this.
As for Dave Richards, well, what a day to show his smiling face on TV!
Complain about this comment (Comment number 22)
Comment number 23.
At 18th Nov 2010, RichYork wrote:I hate to say this but I think that a fair few fans would probably accept administration in order to get rid of the controlling interests who seem more interested in making their point than helping our club.
Yes, it would mean that we will spend at least another year or two in the wilderness but in the long run it just may give us the chance to get back to where we belong. There are tens of thousands of loyal Wednesdayites waiting for the day when they can be proud of their club again.
Complain about this comment (Comment number 23)
Comment number 24.
At 18th Nov 2010, BJ wrote:Ilkeston Town FC was dissolved earlier this year for owing the taxman £47K. Sheffield Wednesday owes HMRC £1.4 million but are given chance after chance. Why is there one rule for one lot of football clubs and another for the rest?
Complain about this comment (Comment number 24)
Comment number 25.
At 18th Nov 2010, uncle_adolph wrote:RichYork, the problem is that it is extremely unlikely that HMRC would accept Wednesday getting out of administration through a CVA and this would bring a further 15 point deduction (possibly more) on top of the ten for going into admin. That would almost certainly relegate the club to League 2.
Then there is no certainty that Wednesday would get out of League 2....don't forget Bradford City were a PL club more recently than Wednesday.
A takeover deal with a fresh and vibrant Board in place has to be the way forward but I fear it is not going to happen.
Complain about this comment (Comment number 25)
Comment number 26.
At 18th Nov 2010, TomorrowsDream wrote:#24 > because noone wanted to buy Ilkeston for 47K? Wednesday have an average attendance of 18000 so are always going to be more interesting for investors.
Regarding Mandaric, I suspect he is waiting for the club to go into administration now so that he doesn't have to deal with the egos - just the number-crunchers at the adminstrators. He probably thinks he can still achieve all he wants to with a 10 point penalty.
Mandaric would be an excellent choice but let's be clear that he's in it for his own interests only. He made a profit on Pompey & Leicester and would do the same with Wednesday. Fans can only hope he sorts out the mess in the process of increasing the club's value and flogs it to someone more reliable than Sacha Gaydamark.
Complain about this comment (Comment number 26)
Comment number 27.
At 18th Nov 2010, Joe wrote:I hope one day football, especially Wednesday, will be treated as a sporting club rather than a business!
Complain about this comment (Comment number 27)
Comment number 28.
At 18th Nov 2010, FirthParkOwlsS5 wrote:SwindonLad, your posts are always just ridiculous & ill-informed. Which leads me to believe that you are just sat at home without a job, annoying everyone as much as you possible for a response. And my taxes are paying for you to do so!!!
As a Swindon fan & supporting a club that has never averaged over 20,000 supporters in any season since 1890, you are not in a position to judge who is & who isn't a big club. Please stick to making comments on Yeovil, Bournemouth & other clubs with the stature of Swindon.
Complain about this comment (Comment number 28)
Comment number 29.
At 18th Nov 2010, Joe wrote:@ SwindonLad
where is Swindon anyway? is it even a city?
hahaha
Complain about this comment (Comment number 29)
Comment number 30.
At 18th Nov 2010, Rich_Owl wrote:SwindonLad - HMRC are not financially supporting Wednesday. If there were they wouldn't have brount three winding up orders against teh club in the last five months, woulg they?
Matt - I know that Wednesday are publicly playing down what's happened in the past to get us into the position we are in. Howard Wilkinson and Nick Parker have both said thsi in recent weeks and to an extect they are correct, 100% of everybodys energy needs to be directed towards getting the club back solvent and functional again. However I hope that once it's all sorted, one way or another, the Ö÷²¥´óÐã will take a look into what has happened. they missed a good opportunity a few weeks ago when we were featured on Football Focus and it's an interesting tale and one that a good journalist should be able to get a very interesting story out of. How does a man such as Sir Dave Richards, become chairman of a football club in the top flight and with assets of £5m and one of the best stadia in the country at the time, only to leave then 10 years later with £25m debt, and effectively on the brink of going out of existance, then get a job as Chairman of the Premier League and a senior FA board member. Even non-Wednesdayites must be interested to know who is running the game in this country.......
Complain about this comment (Comment number 30)
Comment number 31.
At 18th Nov 2010, thorpeyowl wrote:@ SwindonLad
I guess you're right....
Swindon Town Average Attendances: 8,964
Sheffield Wednesday Average Attendances: 18,802
Complain about this comment (Comment number 31)
Comment number 32.
At 18th Nov 2010, Matt Slater wrote:Afternoon all, thanks for commenting and apologies for the geography error. I thought Sheffield was the 4th largest city and actually wrote that at first. But I thought I better check it at the end and had a quick look at Sheffield's wikipedia entry. A day in court saps a man's brain power, though, and I misread the bit about Sheff being one of England's eight biggest cities. I'll let the sub-editors make their own mistakes.
Anyway, on to the comments (in reverse order):
uncle_adolph (25) - The CVA point is a good one and could get quite contentious. With the vast majority of your debt being secured against ground/training ground, there isn't that much unsecured debt there (compared to Pompey, for example). If you take out Co-op's secured debt you're looking at £4m+ and some of that is secured too with old mortgages against Hillsborough. Suddenly HMRC's £1.4m is incredibly significant. HMRC doesn't usually vote for a football CVA out of principle - it is furious 'football creditors' get paid first/in full while the taxman, individuals and trade creditors have to accept whatever is left. I wonder if this case will be different, though. Hard to say because there doesn't appear to be much overdue 'football debt' (unlike Pompey) so the only football creditors will be the current playing staff. I hope it doesn't come to this but it would be interesting to see if HMRC maintains its hard line in this case as CVAs usually return them more money than liquidations.
BJ (24) - You're right, it doesn't seem fair at all. I think King's Lynn were another one that went to the wall owing a relatively small amount to HMRC. But all debt is relative, to be honest. The richest people usually have the biggest mortgages. Look at Man Utd.
RichYork (23) - Interesting. I wonder if we're going to hear of that in the coming weeks. That certainly became a growing body of opinion during the Pompey saga and I think other clubs who would be honest enough to say they emerged far healthier from a period in the admin wilderness.
SwindonLad (20) - Hmmm, are you sure your club should be lecturing here? I know things were very political at the County Ground but I would have thought a Swindon fan would have a bit more empathy in these circumstances. I know it's not really the club's fault (not the new lot, anyway) but last I heard Swindon's CVA hadn't actually been signed off yet. Might be wrong but I think my mate Andrew Andronikou is still officially your 'supervisor'.
martin3647 & Jason Shutt (18 & 19) - You're right, I haven't mentioned Dave Richards. But that was on purpose. I wanted this to be about the last week, which is probably only bit of SWFC's I'm qualified to write about at this point. Yes, I know about the Richards era and I understand some of the anger. But I want to come back to the 'how Wednesday really got here' question again, perhaps when we get closer to a new start in the next four weeks. Funnily enough, I've got a mate who supports Wednesday and for some reason he always blames Mark Bright. Something about a missed sitter in a big game in the 90s. He reckons that's when the rot started. I can never tell if he's joking or not.
FirthParkOwlss5 (17) - Cracking stuff, mate. To answer your question about any potential pay-out for Allen in a CVA, well, that's the great imponderable. It would really depend on what the administrator thinks he/she could cobble together. I think the industry average for a CVA pay-out is something like 25p in the £ but many football ones have been far worse than that. Allen has said he'll give up his interest and his shares (which he claims are worth £500K but that's very dubious) and take £1.5m, approx 60% of what he's owed. Mandaric is believed to have offered £300K (others say £250K), so more like 12%. I think MM is being more realistic in terms of what a Sheff Wed CVA pay-out would look like......assuming you'd even get a CVA given HMRC's position.
EarlsfieldOwl (16) - I honestly don't know MM will do. He likes to keep all of us on our toes. In the last month I've been assured he was looking at Pompey (again), Hull, Norwich and Charlton. There's a bit of a pattern there: biggish clubs with recent top-flight experience and the potential to return. That's what he's after. A bit of a challenge but not a hiding to nothing. As for the local groups, I'm told it's the Spencer Fearn/John Roddison group that's closest. They've reached out to organised fans' groups, which was smart, and definitely represent a break from the past. The worry, however, is that they lack cash, and that's what HMRC need now and the Co-op want to see pretty sharpish. Somebody's got to make this debt go away. I wonder - and the club would not comment - if a deal can be done between the two local groups.
uncle_adolph (again!) - Good question re: Dave Allen and Chesterfield and one I know one or more of your fans' groups is considering exploring. I think it will be difficult to prove, though, as the FL rules don't say much about being a signifcant shareholder at one club and a creditor elsewhere. Is it right to say that he wields influence at SWFC as a loan-note holder? In usual circumstances probably not. These aren't usual circumstances, I know, but I think the FL would be wary about getting involved here.
Is that enough for now? I think so. More later.
If you take the total debt at £27m - and I think it's a bit more than that - and then remove Co-op's chunk, you're looking £3.5m+. Well that's almost what the club owes Allen and Wright. You can add the other four loan-note holders, council tax, HMRC and other bits and bobs to that too. Where things get complicated is working out if the loan-n
with the mortages those directors and ex-directors hve took out on Hillsborough
Complain about this comment (Comment number 32)
Comment number 33.
At 18th Nov 2010, martin3647 wrote:@30 Richowl
I doubt we'll ever find out, but it does show how rotten the football establishment is and how badly the game is run
Complain about this comment (Comment number 33)
Comment number 34.
At 18th Nov 2010, Phil wrote:In fairness, Wednesday should just go into administration, take the points hit, and start to rebuild from scratch. They have been in financial trouble for a decade at least and they have never managed to get back on an even keel.
Leeds took the hits, took the relegations and came back up fair and square.
Leeds have basically not had a transfer fee spent on a player in 4 or 5 years, they've all been freebies and this is with crowds topping 20K week in, week out.
Sometimes im frustrated that weve sold a lot of players for big money - ie Delph for 8mill and we never see this invested in transfer fees.
At the same time, im happy to know there is no chance of going back into administration, unless 'Uncle Ken' has fleeced us, which he may well have done, who knows.
Whilst i also understand the rivalry between Weds and Leeds, i always like to see Yorkshire clubs do well and would rather have Leeds, Weds, and Shef U in the Prem together, battling it out. Bradford can stay where they are though, as they really are tinpot! ;)
Complain about this comment (Comment number 34)
Comment number 35.
At 18th Nov 2010, NormalforNuneaton wrote:The correct grammar is different from, not different to (third paragraph of the blog, although a proper paragraph consists of more than one sentence unlike the first 10 supposed paragraphs of the blog, so it's actually the third sentence of the blog). I do expect Ö÷²¥´óÐã journalists to be able to write English correctly. Is that too much to ask?
Complain about this comment (Comment number 35)
Comment number 36.
At 18th Nov 2010, PEIowl wrote:SwindonLad really dug a hole for himself. Where is Swindon anyway? What do people do there? Swindle?
Anyhow, on to more serious stuff. My hope is that MM will come bk with a sweeter offer because he's the only one that has the resources to make a real difference to our club and move us forward.
Complain about this comment (Comment number 36)
Comment number 37.
At 18th Nov 2010, Verng wrote:Thanks Matt for detailing the current state of play at Hillsborough. Good to know that Ö÷²¥´óÐã sports correspondents realise that there is life outside the Premiership. I read another good piece about SWFC today at wordofsport.blogspot.com It seems the Owls have been in trouble for some years now. Hiring and firing managers every 18 months did not help. And there has never been any rich person wanting to take over this club, even in the days when the club was doing well. Dave Richards ruined Sheffield Wednesday and has now done the same with the England international team. How on earth is this man in charge of the game in England?
Complain about this comment (Comment number 37)
Comment number 38.
At 18th Nov 2010, ed allen wrote:great article matt, first time reader.
it was not long ago that they mid table premier league team now its a shadow of its former self. i hope that someone serious about football comes in and buys the club
Complain about this comment (Comment number 38)
Comment number 39.
At 18th Nov 2010, JohnnySteeletruelegend wrote:I've no desire to see a football club go bust but they are a business and not a charity.
Why should they get away with tax evasion?
I'm most furious about the Co-op bank - the bank that I bank with and the ones who took a seriously tough line with my son who couldn't pay his bank loan when made redundant. If they'd agreed to let him off about 70% of his loan that would have been consistent.
Wednesday - sell some players, accept relegation, pay your debts and start again. That's the real world and that would be fair!!!
Complain about this comment (Comment number 39)
Comment number 40.
At 18th Nov 2010, FirthParkOwlsS5 wrote:Yes Red_Pete, what a good point. I would also compare my sons debt to that of a football club?!?!!?!!?
Complain about this comment (Comment number 40)
Comment number 41.
At 18th Nov 2010, Feel MaDullTie wrote:@35, you have missed out a comma in one of your sentences. I wouldn't have expected a so-called expert to make such a glaring error.
It's only a matter of time before a "big" club goes the way of Chester City or Ilkeston Town and gets wound up. Whether this club is Sheffield Wednesday or someone of a similar size remains to be seen, but I think it could happen very soon.
If the club does go into administration, perhaps looking at Bournemouth would be a good idea. They were in all sorts of trouble just two years ago, but are flying high now.
Complain about this comment (Comment number 41)
Comment number 42.
At 19th Nov 2010, In Off The Ghost wrote:Along with Derby, Leeds, Sheffield Utd and Nottingham Forest, Sheffield Wednesday are one of the clubs I feel should be in the Premier League if you were going by size and reputation. I would love to see them back in the big time, but it doesn't seem likely to happen any time soon does it?
Do you remember some of the players they had in the late 90's? Benny Carbone, Paulo Di Canio...Andy Sinton! Legends.
Reggie Blinker almost ruined my first ever football match with a first half brace at Villa Park. Luckily we turned it round and won 3-2!
Complain about this comment (Comment number 42)
Comment number 43.
At 19th Nov 2010, i_monster wrote:Bit of advice, Phil.
When you've had a skinful, don't turn the computer on!!
Complain about this comment (Comment number 43)
Comment number 44.
At 20th Nov 2010, Martin wrote:Who will buy a club for £10million now when they can buy the same club from the administrator in less than a month's time for a fraction of the price?
Mandaric clearly knows what he is doing in offering Dave Allen the "derisory" sum because they both know it's probably slightly more than the clawback that Allen would otherwise get from the administrator.
This is business, folks, and it won't be until football fans become customers that everyone will understand this.
Complain about this comment (Comment number 44)
Comment number 45.
At 20th Nov 2010, stowyowl wrote:Phil, Wednesday should not "just go into administration, take the points hit, and start to rebuild from scratch".
Our financial difficulties are entirely the doing of our club (or those who have been in charge or on the board at various points in the past) and I fully except that.
The problem with football nowadays is that administration is just seen as an easy option of getting out of financial trouble. It should only be the last option when there is no alternative left, i.e. its administration or liquidation. Howard Wilkinson and Nick Parker should be praised for all the work they have done to try and keep this club out of administration and to find investment instead. I consider my club to be a big part of the local community, I do not want to see local businesses fleeced out of any money they are owed just because its easier for us to go into administration then to work at finding a new investor.
Yes, it is not right we haven't paid our tax bill, I'm under no illusions about that, but neither is it right that any club should go into administration when there is any other possible resolution, no matter how remote.
Administration doesn't guarantee a rosy and bright future.
Complain about this comment (Comment number 45)
Comment number 46.
At 20th Nov 2010, NeilMoore wrote:I'd like to be sympathetic but that is hard. As recently as this summer SWFC were outbidding other League 1 clubs for players. Paul Heffs and Danny Jones were on loan at Bristol Rovers last season and were playing regularly but even though adored by fans here, both chose to go to SWFC in the summer as the wages were much higher (i don't blame the players, I would do the same and no doubt the history and 'size' of SWFC was also a factor).
My point is that even this summer when SWFC knew they were in big financial trouble having staved off 2 HMRC court hearings, they still outbid BRFC for players that now sit on the owls' bench. Yes your crowds are twice as big as ours but as the judge said, SWFC are trading insolvently which means you are still losing money on a week by week basis; the sums simply don't add up. How much faith should debtors and the judge show when SWFC are still spending recklessly by paying players more they can afford.
On the last day of last season I was supporting SWFC over Crystal Palace as Palace had been even more reckless with cash and ambition. No doubt there were lots of Owls fans who were rather miffed that they were relegated to league one instead of a club that had gone into administration as it couldnt pay its debts. If Bristol Rovers lose to SWFC in a few weeks time, I will also be miffed that clubs are allowed to continue to spend recklessly, defying the the laws of economics at the expense of other clubs and their equally loyal supporters. On one hand as a fellow football fan I have sympathy but all clubs should operate within their means.
Complain about this comment (Comment number 46)
Comment number 47.
At 21st Nov 2010, swman wrote:I agree that Sheffield Wednesday fans have been extremely long suffering. As have I, however I would'nt have it any other way. I have been a regular since the late nineties, so have pretty much experienced the entire decline of the Owls with none of the highs that came before!
Anyway, the longer the suffering, the greater the pleasure of the good times when they finally return.
Personally I was very anti Mandaric. I would much prefer someone who understands the club, and isn't purely looking for a cheap, quick money making scheme. (Mandaric is 70 years old, do you really think he's looking to have any real long term involovement??)
Complain about this comment (Comment number 47)
Comment number 48.
At 22nd Nov 2010, uncle_adolph wrote:Don't know what you make of today's revelations (not that any of us are really surprised) but it seems to me that admin is now virtually nailed on.
Complain about this comment (Comment number 48)