There’s more than football to watch out for at Wigan Athletic

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It’s football Jim, but not as we know it.  Latics are back in action tomorrow, behind closed doors and with a great deal of uncertainty around how the rest of the season will pan out.  In these strange times, with no income, staff furloughed and players deferring wages a lot of clubs’ financial futures will be even more uncertain than their footballing ones.

That includes Latics who are taking on the impacts of the pandemic alongside a change of ownership.  As we look forward to our club taking to the pitch for the first time in three months, many fans of our club will have more complex questions on their mind than who’ll start at left back or whether Kieffer Moore will have another striker for company at Huddersfield.

We’ve been trying to find the right words to talk about the take over, but Latics fan Phil O’Brien has beaten us to it, with a well thought out but impassioned blog over on Medium that’s got the conversation going on Twitter.

Phil describes the current situation as follows…

Wigan Athletic have been sold for a profit of £1.6m to a Cayman Islands investment fund and saddled with a loan of £24.36m to cover their debts — with the partially furloughed club currently recovering from the impact of Covid-19.

International Entertainment Corporation (IEC), who bought the former FA Cup winners from Dave Whelan back in November 2018, handed over control to Next Leader for £17.5m.

Hong Kong venture capitalist and high-stakes poker player Stanley Choi is chairman and majority shareholder of IEC — he’s also the majority shareholder in the new owners.

The sale — approved by the Football League — represents a 10% return on IEC’s original £15.9m investment.

So, there you have it.  Our club has moved from being owned by one company owned by Stanley Choi to another of his companies.  Hardly a change then, eh?  But hang on, what’s that about a loan to cover our debts?  Didn’t Dave Whelan leave us debt free?  Phil continues…

The figure of £24.36m includes the estimated million-pound monthly running costs the Hong Kong company (which is also registered in the Cayman Islands) supplied to the Greater Manchester club over the past 18 months. This debt has been covered by a loan from IEC to Next Leader.

UWOTM8?  So, IEC bought us, paid to run the club for 18 months and then want that money back?  Did they not know that there aren’t many football clubs that run at a profit these days?  Still, ignoring the fact that it cost nearly £25m to run Latics over a year and a half, at least the new owners are paying for it, aren’t they?  Well…

It’s unclear how the loan itself — which has an initial interest rate of 8% over 6 months rising to 20% after 12 months — will be covered or what if anything has been used as security.

Did someone say Wonga?  I mean the club owed Dave Whelan much higher sums of money at different stages of his stewardship of the club, but there was always the feeling that was notional debt, that was never really going to get called in.  With the raise in interest rates on this deal, it hardly feels the same, does it?

Does it matter that the loan is reportedly being taken on by Next Leader?  Given that the fund was set up with the express purpose of purchasing Wigan Athletic, I’m not so sure it makes me feel any better.  It’s just another layer in the mix of holding companies and partnerships that often make football finances too complex for a lay person like me to understand properly.

Next Leader, established in January by 51-year-old Choi (who holds a 51% share) and his 44-year-old business partner Au Yeung Wai Kay (with 49%), will have to meet day-to-day running costs on top of loan repayments.

According to official documents, IEC used Newworth Ventures, an investment holding company registered in the British Virgin Islands, to buy Wigan. Newworth lay dormant for five years after being set up in December 2013 and before being used to purchase Latics.

New worth? Next Leader?  All very inspirational on the company name front, but with money moving through various companies and funds based in the Cayman and British Virgin Island, I’m feeling less inspired and more like I’m halfway through an episode of Panorama.  Certainly, we’re only halfway through a story and there could be a multitude of endings but that won’t stop Latics fans wondering why?  Well, wondering why about a few things, really.  Why would IEC sell us?  That’s probably the easy one…

In June 2019, Wigan recorded a loss of £9.2m in the first financial reports filed under IEC ownership, compared to a £7.7m loss in the previous year. The 2019 deficit includes a £7m profit made on the sales of striker Will Grigg to Sunderland and defender Dan Burn to Brighton which was re-invested to bolster the playing squad. IEC also invested money into improving facilities at the DW Stadium and the academy.

It’s not a great picture that Phil paints, but it’s one we’re all aware of.  Football clubs lose money hand over fist.  Ours, based on the figures above, costs about £17m a year to run and unless you’re getting something from it, it’s hard to justify that sort of spending.  Especially when…

In documents filed with the Hong Kong stock exchange, IEC cite Wigan’s failure to reach the Premier League, Brexit, Covid-19, and the potential for a healthy profit as reasons to sell.

Potential. For. A. Healthy. Profit. How do you make a profit on a loss-making company?

The profit is described as the company standing “to reap a return” of £1.6m while the interest on the loan repayments is “attractive and favourable” for IEC; it “will generate a stable interest income and offer a higher return”, the company notes, than depositing in a Hong Kong bank.

Ah, the loan again so they are definitely planning on it being paid back, by someone.  Or maybe not, maybe they’ll be happy leaving the debt where it is and reaping over £1m interest in the next six months and then upwards of £5m a year, assuming Choi and Kay don’t find £25m down the back of the couch before then.  An extra £5m that would mean the club could suddenly need £22m and rising a year to run and pushes last year’s losses to £14m.

Why the hell would anyone want to get involved in a company with that sort of profile?  I always understood Dave Whelan’s involvement with the club.  It fitted with an old-fashioned image of the kindly local benefactor looking to build his reputation and get a statue in the local park.  I doubt Stanley Choi has even heard of Mesnes, let alone has any desire to be commemorated there.

The obvious answer is to make money, the holy grail of all football club owners, not easy, but who knows, with the right investment, it might be possible and as Phil says…

There are other possible and additional explanations for handing over control now, albeit from one Stanley Choi company to another. As an offshore investment fund not part of a listed company, the new owners will no longer have to report to the Hong Kong stock exchange (such reports are publicly available). The move could mean more direct involvement by Choi and the new co-owner Au Yeung which may, in turn, suggest extra investment is on the way.

Who knows?  Are Choi and Kay rich enough to forge a path to the Premier League?  It could be good news for Latics if they are.  Internet speculation is rife that, failing that, there’s a safety net for their investment in the club’s assets.  No, not Samy Morsy and Kieffer Moore…

The structure at Wigan remains similar to what it was under Dave Whelan: the stadium, three properties, and the football club itself are parcelled up as five separate entities but within the same holdings. The properties (the stadium, an empty restaurant next door, and two training grounds) were valued at £31.45m when IEC bought Wigan. That valuation has dipped by close to £600,000 in 18 months; the stadium (15% of which is owned by the local council) is now at £29m and the vacant adjacent building has decreased in worth from £1m to £650,000. It was reported that Latics paid £2.2m in 2016 for Bolton’s training ground. Now used by Wigan’s first-team squad, it’s valued in both the 2018 and 2020 sales at £650,000, a drop of £1.55m. So Next Leader Fund paid £17.5m for property currently worth £30.86m — a £13.36m difference — along with a football club which is technically separate from its assets.

I’ve never trusted a football club’s valuation of anything.  Consider how two clubs doing a part-exchange deal will put different valuations on the players to make it look like they got the best deal, but with or without the changes these properties make the investment and loan look pretty safe, eh?

Well, personally, I don’t find the idea of a far eastern Millionaire, buying a football club as leverage to a property deal that would see a few semis and a light industrial estate thrown up in a small town in northern England very plausible.  I’m also fairly dubious about the real value of the land.

There’s an interesting debate to be had about why there aren’t already houses on Christopher Park or why Bolton cashed in with us rather than a developer on their Euxton site, but it’s a distraction.  They won’t pay the mortgage off.  The majority of our assets’ value is in the stadium.  Who would want to buy a football stadium in Wigan?  I can only think of one other organisation and they’ve even less of a pot to pee in than Latics.  The land itself is of low quality and worth much, much less.

So where does that leave us?  With more questions than answers, that’s for certain.  We’re certainly not in Kansas any more and even if you aren’t suspicious of the plans and intentions of the owners, you’d be right to be concerned about the debt that they’ve brought with them and how, in Phil’s words again…

The picture is further complicated by the disorientating complexities of global finance and twenty-first-century capitalism with many of the companies involved since the Whelan era being Hong Kong-based but registered in off-shore tax havens such as the Cayman Islands and the British Virgin Islands.

We’ll do well to keep our eyes open through the next chapter of the story of our football club.


We’d like to offer many thanks to Phil O’Brien for letting us use his words in our article.  You can read his full thoughts on the takeover over on Medium at

Keep the faith…



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