Many of you will have read comments attributed to Dave Whelan in recent weeks about his retirement from football and ultimate exit of Wigan Athletic. It has become clear to all but the most insistent in the last few years that Wigan Athletic will always struggle to financially survive in the Premier League over the long term without Whelan’s financial input as we do not have the fan base and commercial revenues to be sustainable.
The days of running with a wage bill at 90%+ of turnover and operating losses of £15m are now behind us and given the way that expenditure has spiralled out of control in the upper echelons of the game, it was always going to be the case.
The new Wigan Athletic will have to cut it’s cloth accordingly, maintain a break-even spend which means aligning the wage bill to the television money and adopting the same approach with regard to transfer funds. If Whelan steps away then overdrafts and external loans will have to remain manageable and we will only be able to borrow amounts that we can repay over the short to medium term period.
Whelan confirms in the piece a figure of £48m debt to equity conversion:
“I’ve got no chance of getting that money back so I may as well convert it to equity, which is what I did”
Whelan has effectively ruled out any chance of recovering any of that money upon a sale and anyone with a rudimentary understanding of football finance will be aware that for a club like Wigan Athletic, that is certainly the case.
Even despite this, the report states that the club still has £20m+ of other debts.
Whelan also again refers to his grandson: ‘What I would like to do is create a dynasty at Wigan Athletic. My Grandson is a bright boy and massively keen on Wigan Athletic. I’m inclined to let him have a go and I hope that happens”
With the continuing influence of lifelong Wigan Athletic fan Jonathan Jackson operating as CEO, it seems that unless a tempting offer comes in from abroad – and be careful what you wish for there – that may well be the route that Wigan Athletic may go down.
Whereas we all want and hope that Premier League football will be here for the long term despite our precarious position, without Whelan’s empire as security, we might all have to get used to lowering our expectations somewhat. From a personal perspective, above all else I want a football club to support for generations to come so – tough as this equation is to manage, financial stability always has to come before output on the pitch because if you don’t have a football club, you don’t have a football game to watch.
Here is the FC Business article in full: http://www.fcbusiness.co.uk/eversion/issue57/fcb57/index.html (in what is a good read in general for those of you with an interest in the commercial side of football)
And we can never fail to recommend the writings of Swiss Ramble on the subject of football finances: http://swissramble.blogspot.com/2011/06/wigan-athletics-unlikely-survival.html
FOOTNOTE: THE DW STADIUM
The one thing it is important to note after that love in and what struck me was that the piece was solely about the football club not the stadium company. Many of you will recall, Whelan has talked on several occasions about giving the stadium over to Wigan Athletic. There is no evidence of this actually happening yet. He would be lucky to get more than £50 for someone to take Wigan Athletic off his hands the stadium company is worth maybe £20-25m based on the assets held and rental income generated from it.
Whereas he’s definitely not raking it in off Latics, the Wigan Football Company (the stadium company) does turn over a small profit of £0.5m – £1m per annum. It’s still dwarved by Latics’ annual losses but it’s there.
Although the good (bad?) news from this is that in order to generate those profits, it needs the continued rental income of two sporting businesses. I’m sure both Latics and the Rugby would love to claim otherwise but we need each other, otherwise the rent may have to be doubled without each other sharing the cost.
Where the waters get even more muddied is that Whelan/the Whelan family own approximately 85% of the stadium company as well so by default, if Whelan has not transferred the stadium to Wigan Athletic, it will inevitably fall into the hands of his family, the chief heir of which appears to now be Dave Whelan’s grandson – which subsequently circles the square.
Not much is known of the Managing Director of Vizwear to date, apart from that all who knew his dad spoke very highly of Duncan Sharpe. If he’s a chip off the old block, then the future of Wigan Athletic could be very bright indeed.
Clearly, I’m talking the long term future here not the next result which appears to be all that matters these day to many of our supporters.
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