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Tranmere Rovers & Cheltenham Town Stare Into The Abyss
They escaped by the skin of their teeth last season, but for Wigan Athletic there has been little to get excited about this summer and there remains the distinct possibility of another long, hard winter ahead for a club that has, over the last few seasons, battled against all odds to keep hold of this most unexpected of Premier League places. This is a club that has become dependent upon Premier League television money and the continuing goodwill of its chief benefactor – in this case, Dave Whelan – to the extent that we might ask what, exactly, the plan is for a scenario in which the club were to get relegated from the Premier League.
It’s a question that is worth asking, of course. Wigan had looked dead and buried last season, until Roberto Martinez managed to rally his team to losing just two of their last nine matches, hauling themselves over the safety line with a win on the last day of the season at Stoke City, thanks to a goal twelve minutes from time from Hugo Rodallega. It was a narrow escape, of that there can be very little doubt, and the good news for Wigan supporters is that the club has at least managed to retain the services of Martinez for the start of the new season, in spite of rumours linking him with other, arguably higher profile, jobs.
This, though, is not far short of where the “good” news ends for Wigan Athletic this summer. The club’s financial position seems to be one that encapsulates the madness of Premier League finances. This is a club with considerable debt and a wages to turnover ratio running at ninety per cent. In January, Dave Whelan converted of £48m debt into equity – effectively an admission that this was money that he was never going to see again, and it must concern supporters of the club that whilst Whelan is still a wealthy man, he is not a young man either. This is, reportedly, something that Whelan has been concerned about, but the question of who is going to come in and eventually take over and run the club whilst either underwriting continuing losses or turning those losses around through cost-cutting is not a question that is easily answered.
Set against this sort of background, the sale of Charles N’Zogbia is not merely unsurprising, but a piece of business that the club actively needed. The £9.5m that the club is to receive for this particular sale is money that it could ill-afford to lose, and a few bills will be dependent upon this money coming into the club. N’Zogbia isn’t the only departure from the club, either. Tom Cleverly, who spent last season on loan at The DW Stadium from Manchester United, has been recalled by his club and, in a moment which tidily encapsulates the gap between the haves and have nots of the Premier League, has been called to to the England squad for their scheduled friendly match against the Netherlands. The signature of goalkeeper Ali al-Habsi for £4m from Bolton Wanderers, meanwhile, represents a reasonable signature for a goalkeeper that impressed the club during his loan spell at the club last season. Meanwhile, the signing of the former Wolverhampton Wanderers David Jones on a free transfer is a solid one, but not one to set the hairs on the the back of the neck on end.
Yet, if there is a man that is capable of turning Wigan Athletic around, it is probably the man currently in charge, Roberto Martinez. Martinez’s departure from Wigan from Swansea City in 2009 left a sour taste in the mouth among many at The Liberty Stadium, and the owners of the club made the right desicion in not replacing him whilst things were not going well last season, if the run that he managed to put together at the very end of the season was anything to go by. This sort of narrow escape, however, is not one that the club can afford to repeat in the future, though, because the fall in television revenue alone if the club were to be relegated could be ruinous for it.
Part of the problem for Wigan Athletic is its location and its ongoing struggle to raise revenue other that the patronage of Whelan and the television money that it receives from the Premier League. Wigan have made done what they can to get their home crowds up since getting into the Premier League, but crowds have fallen since the end of the 2005/06 season – their first in the Premier League – from an average of 20,610 then to 16,812 last season. Coupled with this, the club’s cheapest season ticket retails at £270, the third lowest in the Premier League after Blackburn Rovers and a club that can afford to lose a few pounds if it guarantees a full house every other Saturday, Manchester City.
Losing money, however, is not a luxury that Wigan Athletic can afford, and this is one of the more intractable of their problems. Wigan isn’t a particularly big town and, of course traditionally the football club has had to share its support with the local rugby league club. Of course, there are a proportion that will watch both and the fact that rugby league is now played during the summer facilitates those that wish to watch both, so this is not a clear black and white issue that can be answered by saying that “Wigan is a rugby league town”, but there is also a considerable amount of competition for support in Lancashire and the truth of the matter is that match-day and ticket revenue, which should make up part of the bread and butter of the revenue for a football club, are considerably lower than we might consider healthy.
So, Wigan Athletic are likely to find themselves in a financial tight spot for as long as they are in the Premier League. They have, however, managed to keep themselves at this level for five years so far and they may well point to this as evidence that they can continue to survive there. This survival, however, has come at a financial cost to the club and Dave Whelan and it is likely that a time will come when this will have to, for whatever reason, change. Should the club be relegated, this would be likely to be the straw that broke the camel’s back in this respect. Otherwise, push may come to shove should Whelan decide that he cannot sustain these losses any more, or should anything happen to him. The Whelan family are the owners of the club, and some other members of his family may be less than happy at the prospect of funding the lifestyles of footballers and their agents.
These are stark facts, but they are unlikely to become major issues over the next few months and should Wigan hang on to their Premier League status and rein in their dependency on Whelan’s money, there is no reason to expect oblivion to follow. Roberto Martinez is probably the best man to help ensure this for the club, so it is to be hoped that the club keeps a steady hand on the tiller and that it doesn’t get carried away and push him towards the gang-plank should they have a rocky start to the season. There are sufficient teams that will be starting the season in an even gloomier state of mind than Wigan to mean that surviving the drop remains a possibility, although they cannot afford to leave things as late as they did last season in order to retain their Premier League status. Should they fall at the end of this season, and there are probably five or six clubs that we can perm three from as those that will be relegated come next May, the Premier League parachute payments will cushion that fall, but it will still be an almighty bump for a club like Wigan Athletic. On the pitch, Martinez’s immediate aim will be seventeenth place. Behind the scenes, though Wigan’s main aim must be to move towards a more financially sustainable model. It’s a challenge that the club’s long-term viability may come to depend upon.
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Ian began writing Twohundredpercent in May 2006. He lives in Brighton. He has also written for, amongst others, Pitch Invasion, FC Business Magazine, The Score, When Saturday Comes, Stand Against Modern Football and The Football Supporter. Ian was the first winner of the Socrates Award For Not Being Dead Yet at the 2010 NOPA awards for football bloggers.
Usual reporting, let’s trash little Wigan and their supporters, who live in mud huts. What happens when the benefactors of the other big teams lose interest? Man U, Man City, Chelsea etc. Is this any different to “little Wigan”. We are punching above our weight, however we could well surprise some bigger teams this year, my team is well run and an improving team in the premiership on a budget. Lets see where we end up at the end of the season?
Dig a little deeper and you’d see Latics have been addressing their financial situation for a number of years. We are ahead of the curve, most other PL clubs still don’t acknowledge the financial reality. Our reward for such moves and developing a young squad is to be criticised in the press for our lack of transfer activity, plus numerous patronising comments from the likes of the Mail.
I don’t know where you get the idea that what I wrote is “trashing little Wigan and their supporters, who live in mud huts”, David. Your comments bear no resemblance to what I actually wrote.
AJ: I don’t think that the level of debt is the major problem at Wigan, which is why I only lightly touched upon the subject and pointed out that this level of debt will have been reduced by Whelan converting such a large amount of the debt owed to him into equity.
The big problem that Wigan has is that of ongoing cashflow. It is not a criticism of Wigan supporters to say that a 20% drop in home attendances in five years is a problem for the club, and neither is it a criticism to say that this problem is compounded by the cost of season tickets being so low.
It is an intractable problem brought about by the size of the town – Wigan had a population of a shade over 80,000 according to the 2001 census, and this will limit crowds. Other towns in the North-West (Blackburn springs immediately to mind) are in a similar position.
For the 2009/10 season, 88% of the club’s income was made up of television money and this level of dependence will be likely to become a major problem should the club be relegated. The way to reduce this dependency is to continue to depend upon sales such as that of N’Zogbia this summer and/or (I would say both) increase commercial and match-day revenues.
The 88% point is interesting, where do you get such information?
That particular figure was from the Swiss Ramble article on Wigan, based on the 2009/10 accounts, as far as I am aware. Even if it turned out to be wrong by ten per cent, it would still be… too high. I’ll dig out the link this morning.
[…] Premier Leauge Pre-views (Wigan) – TwoHundredPercent […]
Well Ian I feel you have taken generic facts of football clubs at the top level in this day and age, added a few specific facts about Wigan and tied it up with the inaccurate aims of martinez.
How can you write about the detail of wigan support without identifying that they have shot through the leagues and outgrew the fan base?
Generations of football fans in little wigan are fans of the bigger clubs granted but young support now grows planting the seed for future generations.
For future referrence latics have been in the premier league for longer than 5 years and martinez’s aim is a safe season.
With regards revenue the foundation for success is in place; no stupidly large wages or massive transfer fees, Rome wasn’t built in a day a concept understood by the wigan chairman and faithfulls.
The reason for this, Jack, is that if I did, I would probably be accused of patronising the club and its supporters. I would not try and argue that Wigan have “outgrown” anything. The final paragraph of the article states that, “On the pitch, Martinez’s immediate aim will be seventeenth place”. I, unfortunately can’t answer the question of how you feel that this differs radically from your assertion that, “martinez’s aim is a safe season”. Finally, my concerns over the club’s well-being are not based upon “stupidly large wages or massive transfer fees”, but on matters of cash-flow, commercial revenue and match-day income that is at best static on account of falling attendances.
My point being you can not mention finacial well being without analysing expenditure. Income will improve with fan base but for now the dependancy on television money and selling players is acceptable.
I feel you have missed key points in your season preview, no mention of V Moses the player expected to fill charles’ boots or even James Mccarthy with all the interest he has generated.
Seventeeth is not a safe season. Martinez has his aim on a top half finish.
Victor Moses is a decent player but, as you may have noticed, we haven’t been going through each team player-by-player in these previews. There is no section on him – or indeed James McCarthy – for the same reason that there is, say, no paragraph on Chris Smalling on the Manchester United preview and no lengthy description of Andy Carroll on the Liverpool preview. This site is really not *about* which players will be hits and which will be flops, or whatever. Each preview is, if you like, a “state of the nation” article on where that club is at this time.
I would, however, dispute your claim that “Income will improve with fan base” to a very significant degree. Season ticket sales are, I understand, up on last season, but they are amongst the least expensive of all 92 league clubs, never mind just the Premier League. As I said in the original article, this is not the fault of the football club. It is where it is, both geographically in terms of being in the Premier League.
Tell me, Jack, do you “expect” Wigan to manage a top half finish this season? Because I don’t, and I doubt if you’d find many that do. I’d also be surprised if Roberto Martinez, seeing how close his team came to relegation last season, does. This isn’t a slight upon Wigan Athletic, but if you’d prefer me to merely tell you what you wish to hear (and I have this same conversation all the time with supporters of various clubs), I might as well just tell you that Wigan will finish in the top six and win the FA Cup, and leave it there.
With a larger fan base the club can command a greater ticket price or at least sell more tickets, your comment is short sighted. I personally believe 14th is a realistic aim for the club. I’m by no means asking you to tell me what I want to hear. If you insist on writing articles including the manager’s aims do a little research not hard to find out the on pitch intent for the up and coming season. I believe there is an audio clip available on the bbc website, listen and be “suprised”
Skeptical views like yours make it even sweeter every season we stay up and I would like to thank you for that!
Off topic I know, but I heard Rochdale described as a “Lancashire” club on The Football league Show last Saturday, have heard Bolton described as similar, and this article suggests the same for Wigan.
Cards on the table, I have no time for the metropolitan counties such as Greater Manchester or Merseyside, so in reality have no problem with the above descriptions. However, I never hear Tranmere Rovers decribed as a “Cheshire” club these days, so why the double standard?
Metropolitan counties either exist or they don’t, but I just wish the media would show some semblance of consistency!
Anyway, carry on, & sorry for briefly hi-jacking the comments.
I don’t understand how far can Wigan improve its fan base, situated in a town with a population of 80000, midway between Liverpool and Manchester, can dramatically improve its match income.
They were actually going the right way in importing quality Caribbean players, both improving their squad and helps merchandising abroad. However, they should tap towards more affluent markets like East Asia.
Michael are you from wigan? 8/10 football fans support the bigger clubs ie united or liverpool however look at stats and you can see the fan base is majorly young people, kids. The longer wigan stay at a top level the more generations of football fans will support latics instead of “big clubs”. Where is this 80000 from the borough is much greater than that! Admitted attendance will never reach the heights of big city clubs but atleast
Michael are you from wigan? 8/10 football fans support the bigger clubs ie united or liverpool however look at stats and you can see the fan base is majorly young people, kids. The longer wigan stay at a top level the more generations of football fans will support latics instead of “big clubs”. Where is this 80000 from the borough is much greater than that!
I totally agree latics do well to not buy established names and chip into a wider market.
I dont see how you can just quote 88% from another article without having any proof in front of you, you should write for The Sun. Jack, you are dead right in all you say. Ian, do a bit of proper investigation before you write an article, don’t just read what other people write and then write it in your own words.
Here’s a link to the original article. The guy is a chartered accountant and, as far as I am aware, orders a copy of the club concerned’s accounts in order to write each article.
The guy that writes this site has been doing it for a couple of years and is very well-respected. He is a chartered accountant and, as far as I am aware, orders a copy of the club concerned’s accounts in order to write each article – the figures used are for 2010. This isn’t merely “copying” anything; it is using a well-respected source. I would refuse to accept that he merely made up this figure and I think that he would as well.
Unless, of course you are suggesting that, before even commenting on a company’s financial state, I should request a copy of their annual company accounts myself. If you wish to prove this figure wrong, feel to do so. I will be more than happy to accept that it is incorrect in that case.