Wigan Into Administration

[Steve H]

So you could be bankrupt loads of times, as long as it is not current, then you are deemed to be a fit potential owner?

 

[Grumpy Old Man]

Shouldn't Wigan's previous owners be taking some responsibility for selling to the current owners?

What happened to their due diligence?

The two groups successively owning Wigan aren't strangers, to put it mildly. Common ownership. Wigan have a net balance sheet liabilities going back years, and were reliant on Dave Whelan not asking for loans to be repaid. But, up until 2017, there were being run more or less sustainably on a year to year basis. The killer for them seems to have been the impact of relegation to League 1 in 2016/17. It looks to me from the results since that they threw too much money on getting back to the Championship and then in staying there. Over the last two years, their losses have been the same as their turnover - ie they've been spending £2 for every £1 brought in. The reason for the sale looks pretty obvious; if CEO had pulled the plug, it would have negatively impacted on their stock market rating on the HK exchange. NLF pulling the plug avoids that; I wouldn't mind betting that CEO are indemnifying NLF for the loss.

 

[Mexico]

So you could be bankrupt loads of times, as long as it is not current, then you are deemed to be a fit potential owner?

Basically yes, Craig Whyte when he took over Rangers had similar form.

 

[Grumpy Old Man]

So you could be bankrupt loads of times, as long as it is not current, then you are deemed to be a fit potential owner?

On the letter of the regulations, yes.

 

[SpiritofBurnden]

Over the last two years, their losses have been the same as their turnover - ie they've been spending £2 for every £1 brought in.

So why are they appealing the 12 point deduction if they've been spending beyond their means?

Rick Parry's argument is that there was no indication that the owners couldn't continue to fund the club.

However whether they could have continued or not is irrelevant if they've decided that they don't want to or can't afford to.

 

[Grumpy Old Man]

So why are they appealing the 12 point deduction if they've been spending beyond their means?

Rick Parry's argument is that there was no indication that the owners couldn't continue to fund the club.

However whether they could have continued or not is irrelevant if they've decided that they don't want to or can't afford to.

I think they're trying to claim it's down to coronavirus, and thus exceptional circumstances. The administrators will try to appeal, because they'll get a better return by selling Wigan as a debt-free Championship club. If the deduction doesn't affect their league status when the season ends (ie they can stay up despite the deduction), I'll bet the appeal will be quietly dropped.

 

[SpiritofBurnden]

I think they're trying to claim it's down to coronavirus, and thus exceptional circumstances. The administrators will try to appeal, because they'll get a better return by selling Wigan as a debt-free Championship club. If the deduction doesn't affect their league status when the season ends (ie they can stay up despite the deduction), I'll bet the appeal will be quietly dropped.

The biggest puzzle is why the current owners bought the club in the first place.

They don't have much of a fanbase and the costs of getting into the Premier League can be astronomical.

Seems like they've given it a season, realised it's going to cost a small fortune and then promptly dumped it before they lose any more money.

 

[David M]

Just bumping this cos it's easier but I've read elsewhere that the Dell group, i.e. all 4 of them, are one of the interested parties. The administrators now have a preferred bidder and they have until 12 noon tomorrow to confirm their intent to continue.