Sheffield Wednesday Go To The Wire

By on Nov 16, 2010 in English League Football, Finance, Latest | 7 comments

Monday came and went, and nothing happened. Tuesday has now come and gone, and nothing has happened. The future of Sheffield Wednesday Football Club hangs by a knife-edge, with the club having apparently made the enormously high risk decision to not put the club into administration (which would protect them from the winding up order that HMRC have presented) and to attempt to buy themselves a little time at the High Court instead. They claim to have four parties interested in buying the club – although it is worth pointing out that the Certified Oil Rentals group, which was involved in talks that collapsed recently, is not amongst them – but this will be enough the persuade the registrar that they deserve another break?

It is worth quickly remembering what has happened to Sheffield Wednesday since the start of this season. In brief, they have already survived one winding up order after the Co-operative Bank, in a display of supreme co-operation, paid off the amount of money – £600,000 – owed to HMRC. That option is not there for the club this time. The bank was acting in its own interests in paying off this amount of money for the club, and it has evidently decided that this is not action that it can continue to take to prop the football club up. The proposed take-over bid by Certified Oil Rentals group fell through and HMRC, with further tax arrears having fallen due, has already booked another appointment at the court with Wednesday for next month over another £300,000.

Against this background, it was widely expected that Sheffield Wednesday would, this time, have but two options – either to pay the amount on the petition that they currently face in full or to enter into administration in order to gain protection from the legal proceedings that have been issued against them. They have, instead, chosen to go down a third route – to try to get the proceedings scheduled for tomorrow adjourned for fourteen days while they seek to tie up a deal that will secure the future of the club. Other clubs have successfully managed to get proceedings deferred before, but this can only realistically be regarded as a last ditch option. As things stand, Sheffield Wednesday supporters do not currently know whether their club will exist this time tomorrow.

To understand just how much of a high risk strategy this could be, we should take a moment to consider exactly what is going on here. HMRC have issued the petition for a winding up order against Sheffield Wednesday because they believe the club to be insolvent – that is to say unable to meet their financial obligations as and when they fall due. Wednesday have already survived one winding up order this season. Their counter-argument is that they should be granted more time in order to continue talks with new investors. HMRC may well argue that there is little point in this. That Wednesday have had plenty of time to sort their financial problems out. That time has run out.

The club, then, has to argue that this will be resolved within fourteen days. It is, at this stage, an extremely high-risk decision to rely on the court’s goodwill to grant this to them and all of this is not even taking into account the fact that there is another winding up order facing them next month, even if they manage to survive this one. It is difficult to state this point. It’s difficult to even put the words on the screen. But perhaps this is the tipping point. With nothing better to offer than, “Give us fourteen days and we will sort something out, we promise”, perhaps Sheffield Wednesday’s luck – perhaps football’s luck is about to run out. The fact of the matter is that over the last decade over half of the clubs in the Football League have entered into administration whilst being members of the Football League. That run has to end, one day.

For as long as it is smaller clubs that die, the rest of the football world will shrug its shoulders and carry on very much as normal. Sheffield Wednesday have been four times the English champions, four times FA Cup winners and once winners of the League Cup. They are the third oldest professional club in England. If Sheffield Wednesday fall, perhaps the required shock to the system to English football that is needed might finally be administered. This is, perhaps, speaking the unspeakable. But it is only the possibility that everyone, even when faced with the collapse of one of its better-known names, might simply turn the other way and carry on as usual that prevents us from going so far as to say that this is what English football needs.

Perhaps there is a concrete plan. Perhaps those currently invested with the responsibility of safe-guarding the one hundred and forty-three year long history of Sheffield Wednesday Football Club have got this worked out to precision. It has to be said, however, that there is not much in the recent history of the club which suggests that those concerned are sufficiently competent to have this all worked out. For the good of Sheffield Wednesday supporters (once again the supporters are the only truly blameless victims in this absolute travesty of a situation), we hope that the club manages to pull through and that the next few weeks are not a matter of applying further sticking plasters to a situation that requires serious surgery. Those in charge had better have a damn good argument tomorrow.

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    7 Comments

  1. Count again the number of times Wendy have won the FA cup please!!

    bladesman

    November 16, 2010

  2. @ bladesman you will always be in our shadow, always

    Owl2TheEnd

    November 16, 2010

  3. Thanks for the article and the sort of sound analysis lacking elsewhere in the media. Well done for seeing the bigger picture bladesman.

    Ken

    November 16, 2010

  4. And if Sheffield Wednesday’s collapse is not enough to produce the required shock… whose collapse is?

    That’s the terrifying thought. Even more terrifying than the one you made.

    David Howell

    November 16, 2010

  5. …again.

    Martin

    November 17, 2010

  6. “And if Sheffield Wednesday’s collapse is not enough to produce the required shock… whose collapse is?”

    It took the Green & Gold campaign for the mainstream media and the political leaders to make comment – so I think that’s your answer.

    Rob

    November 17, 2010

  7. The Owls are the 5th oldest club (formed 1867)behind:

    NOTTS COUNTY 1862
    STOKE CITY 1863
    NOTTINGHAM FOREST 1865
    CHESTERFIELD 1866

    Mark Barton

    November 18, 2010

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  2. Football clubs: stop chasing an unaffordable dream | Bradford University School of Management Blog, Business Blog - [...] Sheffield Wednesday is the latest club to hit financial problems, football money expert Brendan Guilfoyle of The [...]

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