When wings start to melt – Wigan Athletic’s sad collapse

WIGAN Athletic tipping into administration is sending shock waves through lower league football at a time when more and more business casualties of the coronavirus are gradually emerging.

Wigan, the first domino to collapse due to the virus, may yet be bought and saved from extinction, but nobody in football should be complacent about the situation. The fall of a club that seven years ago was in the Premier League and had just won the FA Cup is a sad story with a very clear warning.

Wigan’s tenure in the Premier lasted an astonishing eight years and ended with that FA Cup triumph at Wembley that prompted chairman Dave Whelan to “Dad dance” in the Royal Box. It was a delight to see, but as Wigan celebrated one of the most unlikely FA Cup wins of all-time, against Manchester City, they were also grappling with relegation. The club’s decline can arguably be traced back to that moment.

In 2012-13, Wigan’s revenues totalled £ 56.4 million, three years later, they had dropped to £ 15.7 million and in 2018-19, they were just £ 11.5 million – the lowest in the Championship. Since 2013, they have suffered two relegations to League One and bounced back each time.

Wigan’s wage bill went from £ 43.7 million in 2013 to £ 19.4 million in 2019, a logical reduction but the wage-to-income ratio was at a very dangerous 168% in 2018-19, one of the highest in the Championship.

Wigan made a net loss of £ 9.2 million in 2018-19, making it five annual losses in six seasons since their Premier League membership ended. Whenever the club sailed close to a crisis, Dave Whelan would prop them up.

Whelan sold the club in November 2018 in a £ 22 million to Hong Kong-based International Entertainment Corporation (IEC), a casino consortium, which brought the curtain down on a 23-year association between Whelan’s family and Wigan Athletic. Under Whelan’s regime, Wigan were widely considered to be one of the better run clubs. In June, it was announced that IEC had sold the majority of shares to another Hong Kong-based entity, Next Leader Fund LP. IEC and NLF are controlled by the same person, a professional poker player named Dr. Choi Chiu Fai Stanley. Under the terms of the “new” ownership, Next Leader Fund loaned Wigan £ 29 million at a rate of 8% with a default rate of 20%. The club’s net debt is currently running at around £ 20 million.

Wigan, like all other championship clubs, had to endure a three month lockdown, and given their high wages and low level of revenues – even more restrictive after the termination of parachute payments – the club position clearly deteriorated, so much so the new owners declined to inject more money into the club, which triggered the decision to put the club into administration for its own protection. Critics have questioned just how much due diligence was carried out by the owners, and indeed the Football League, when the club was initially taken over and then “sold” to New Leader Fund. There are also strong rumours that a gambling ring in the Philippines was trying to exploit the club, placing a bet on Wigan being relegated.

Post-Premier careers can be precarious for smaller clubs that outperform and find themselves in the top flight. While the experience is great for the fans and players, once a club like Wigan, Barnsley, Bradford City and Swindon Town falls out of the Premier, the adjusted financial realities of life can become very troubling. Relegation from the Premier can often be followed by a second demotion and after parachutes dry-up, income can drop off a cliff to a certain extent.

Wigan’s crowds have fallen by 46% since relegation from the Premier League in 2013 – in 2019-20, their average was just over 10,500 which was a 9.2% drop on 2018-19 and a far cry from their Premier average of 18,600 over the eight years. Once renowned primarily a Rugby League town, Wigan Athletic Football Club were a successful non-league club until the late 1970s. The football club’s turnover is around double Wigan Warriors RLFC’s income.

The administrators, Begbies Trynor invited the fans to buy the club out of administration, but subsequently admitted it might prove too much for them. They commented: “It comes down to money, I’m afraid. We all love our football clubs, but at the end of the day, they are businesses now.” Sadly, this may be true, but not enough attention is paid to risk management and financial prudence in the football industry.

Begbies Traynor have said there are at least 10 parties interested in buying the club, but they must prove they have funds of at least £ 10 million to open negotiations. Although there is currently little, if any, cash going into the club at present, the administrators see a rosier outlook in the medium term. The club is the 85% owner of the DW Stadium and shares it with Wigan Warriors.

Whatever the outcome, Wigan look like they are facing a 12-point deduction if they finish outside the relegation places or a 12-point penalty in 2020-21 if they are relegated this season. This will, naturally, be contested, but it doesn’t look good at this stage.

To the credit of Wigan’s players, they have remained focused, even though relegation is now a likely scenario. They have won all three of their games since the Championship resumed and have yet to concede a goal.

The Wigan episode should act as a warning for clubs with Premier League aspirations. The Championship model is an unhealthy one and can be a recipe for disaster. That Wigan managed eight years at the top level is still hard to believe but once the bubble burst, a club with such low income streams became very vulnerable.

The rest of football should wish them well in these difficult times if only because the chair of the Department for Culture, Media & Sport, Julian Knight, said there may be 10 to 15 clubs who could find themselves in a similar situation to Wigan. Who will be next?

Wigan Athletic will, hopefully, survive, but in the current climate, they couldn’t have picked a worse time to be staring into the abyss and their most recent owners could have chosen a better moment to climb on board, but increasingly, people believe dirty deeds might be at play and that the truth will eventually reveal some very disturbing information.

@GameofthePeople

Photo: PA

Calling in on Wigan Athletic….In a week of own goals

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It had been a PR disaster week for Wigan Athletic and events off the field looked certain to keep the club in the headlines, for all the wrong reasons, for a few weeks to come. In 2013, when the Latics won the FA Cup, they were everyone’s darlings. Their manager, Roberto Martinez, was a sought-after commodity, and their Chairman, Dave Whelan, and his persona of “straight-talking good bloke”, was admired by everyone. Wigan were a great example of a small club that had “got it right”, we were told.

Whelan and Mackay

In the past week, they have hired Malky Mackay, whose controversial SMS texting has been the subject of investigation, and Whelan has made some ill-timed and inappropriate comments about Jewish people while also undermining Sino-British relations. It has created a mess that may end in tears in the Lancashire town.

Mackay’s case has been gathering momentum. It is certainly true that the former Cardiff City manager made comments that are unacceptable in the modern age. They make you cringe and the current TV series on how we lived in the 1970s underlines how society has moved on when it comes to race, homosexuality and sexual equality. There’s no point defending Mackay in any way because you would face a torrent of abuse from those that have been offended by his comments. But is his behaviour greatly different from many football people?. At Chelsea last season, Benteke took the field and people around me insisted on calling him a “BBB – Big Black Bastard” throughout the game. When I attended a Wingate & Finchley game, away supporters were calling the North Londoners “Jew Boys”, a reference to the heritage of that friendly, unassuming club. And only this season, I heard FC Romania referred to as “a bunch of benefit scrounging eastern Europeans.” It exists all over the game.

But Mackay is in the public eye and he should have been careful and aware of what is deemed to be acceptable and unacceptable. Should he be banned? Absolutely not. He should be disciplined, but he should pay his penalty and move on. Everyone makes mistakes and should have the opportunity to repair the damage they have caused.

Likewise, Dave Whelan. He has shown remarkable courage in employing Mackay, who had a good spell at Cardiff, far better than anyone could have expected. But he undermined his own support of Mackay by his comments. He becomes guilty by associating himself with the type of behaviour that Mackay is being accused of. Whelan, I am sure, is not a racist or anti-semite – he has used the time-honoured get-out clause of ‘some of my best friends’- but his comments were racist and anti-semitic. Ask the many black Wigan players down the years if Whelan has ever displayed racist gestures, I would wager they will not have a bad word to say about the man. Whelan is self-made, and he would surely set the narrative at the companies and organisations he has managed. Ask the people who have worked for Whelan what type of man they believe him to be.

He’s made a bad call and by doing so, he may, unwittingly, have made Mackay’s position far worse. Whelan has since said he will resign if anyone suggests he is a racist in the FA enquiry. That was also foolish, because that will severely punish Wigan Athletic.

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Northern Soul

It’s easy to associate Wigan with Rugby League. Those that recall BBC TV showing live second half action from a Rugby League game on Saturday afternoons will recall Eddie Waring talking of “up and unders” and teams like Wigan, Wakefield Trinity, Hull Kingston Rovers and Bradford Northern. They’ve all got marketing-driven names these days and Wigan, once the top sporting entity in town, are the Warriors. They share the DW stadium. Wigan is also one of the homes of Northern Soul, a music and dance movement that has attained cult status. The Wigan Casino was one of its most influential venues.

Wigan Athletic’s fans showed they have soul of a sort when Whelan took his seat in the West Stand. Call it human nature, or just the moral code of the game, but he was applauded by all and sundry. “They’re calling us a town of racists,” said one blue and white scarved fan. “Bloody top man, Dave.”

“You’re just a town full of racists”, was exactly the soundtrack coming from the 5,000-plus Middlesbrough fans who visited the DW Stadium on November 22, 2014. They had come en masse from the North East, creating havoc with Wigan’s ticketing arrangements.

We were told when we arrived at the box office that because we were not “on the database”, we had “no chance” of getting a ticket. Now Wigan is hardly Millwall circa 1970s or Leeds United, and crowds at the DW averaged 15,000 in 2013-14 and in 2014-15, they have dipped to less than 13,000. The fine Wigan stadium has a capacity of 25,000 so it’s been 50% full this season. The locals are not exactly clambering over themselves to get in, so supply certainly exceeds demand.

Explaining that we had come up from London to see the game had no effect. “We are turning people away from Scandinavia, New Zealand and all other the country,” the steward proudly said, which begs the question why a solution hasn’t been found. “It’s not us, it’s the police and the owner,” came the reply, hinting at some discontent with Mr Whelan. “This is a one-eyed town,” he added in what seemed like an accent honed on the Liverpool Kop.

We persuaded a tame local to buy tickets for us, good value at £ 20, but the aggravation was not welcomed. Surely Wigan need all the friends they can get – especially in the current climate?

Whelan’s ovation does typify the game of football, though. For example, bad boys always get a rousing reception when they return from prison or suspension. While other strands of society would express embarrassment in such adversity, football seems to revel in embracing those stepping out of line with a collective reaction of, “he’s one of us”. The sentiment around Mackay was generally positive, too.

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Game on

The reason Mackay has been installed at Wigan is to try and rekindle a club that has lost its way since relegation from the Premier in 2013. They finished fifth in 2013-14 under Uwe Rosler, but missed out in the play-offs. Rosler took over in December 2013 from Owen Coyle, who had replaced Everton-bound Martinez following the FA Cup triumph. Rosler didn’t last long as Wigan started the 2014-15 poorly.

On the day Mackay took over, Wigan were third from bottom in the Championship and had won three of their 17 games. They had won once in 13 games, a 2-1 success at Derby County. Middlesbrough, though, have genuine hopes of a promotion campaign. Sitting third in the table, they underlined their credentials with a 4-0 victory against Norwich recently. Their form has reawakened local passions and their travelling support was impressive at Wigan.

Despite the noise made by the Boro fans, Wigan went ahead in the 25th minute with a superbly- taken free kick by Shaun Maloney that gave Middlesbrough’s veteran Greek goalkeeper, Dimi Konstantopoulous, little chance. Middlesbrough enjoyed plenty of possession, with Adam Reach’s left foot causing problems for Wigan. The home side relied a lot on the virtuosity of Honduran winger Roger Espinoza, but although he had skill in abundance, he looked a frustrating individual to play alongside, his final ball often wayward or over-ambitious.

Just on the interval, Adam Forshaw almost added another goal for Wigan, but his volley went wide.

Middlesbrough equalised in the 58th minute, Patrick Bamford sliding the ball through the legs of Konstantonpoulous after exchanging passes with Spanish striker Kike. Bamford is on loan from Chelsea, one of many players sent out from Stamford Bridge to learn their trade. His loping style may not be to the taste of his boss at Chelsea, but he looked able to hold his own at Championship level.

Wigan almost regained the lead when Chris McCann struck a post and Bamford should have done better in the closing stages from a George Friend cross. If referee David Webb had been a shade more generous, Middlesbrough would have been awarded at least one penalty right at the death. Final score 1-1. Fair result.

And what’s next?

The Wigan saga will roll on. I wouldn’t bet on Mackay being in the job by the end of the season as the investigation unfolds. Wigan Athletic fans better hope that the outcome doesn’t result in Whelan leaving, because it really would mean the Road to Wigan Pier would be a very rocky one.