Everything we know after Sheffield Wednesday released their accounts for 2017/18

At long last, Sheffield Wednesday have released their accounts for the 2017/18 season. The accounts come months overdue, with the club therefore restricted to the terms of a ‘soft transfer embargo’.

By Alex Miller
Thursday, 11 July, 2019, 15:25
Hillsborough Stadium has been sold.

Football finance is a complicated business – so what does it all mean? With the help of football finance expert Kieran Maguire, a lecturer at the University of Liverpool, we’ve sifted through the numbers to pick out some of the key points, from the sale of Hillsborough to how close the club came to breaching FFP guidelines.

Are Sheffield Wednesday still under a soft transfer embargo?

Yes. The accounts have been published and handed over to the EFL, but what follows is a period of scrutiny as their accountants comb over the finer details. The biggest contention is likely to be surrounding the sale of Hillsborough, Kieran said: “The EFL are clearly unhappy that they have been so badly delayed. I think the issue will be the stadium sale, there are potential problems there, but the good news is that the EFL appear to have signed off on the stadium sales at Aston Villa and Derby County. To be consistent they should approve the sale of Hillsborough.”

So who now owns the stadium?

That’s a little shrouded in mystery. The accounts insist that Hillsborough was sold for around £60m during 2017/18 – delivering a profit of £38m – but they do not indicate to whom, and according to the Land Registry, the club still own the stadium. What’s more, the accounts do not indicate that any cash was brought in after the sale. Keiran said: “When I’ve looked at the accounts of both Derby and Villa, I’ve seen that they’ve sold the stadium and then pretty much straight away received the cash. Sheffield Wednesday appear to have sold the stadium, we don’t know yet to whom, and they don’t appear to have been given the cash. Though it could be that that cash has now been received.”

Did the club make a profit in 2017/18?

Officially speaking, yes they have, to the tune of £2.6m – a rise of £23.4m on the previous year (2017 saw a loss of £20.8m). But without the sale of Hillsborough their losses would have been similarly concerning, and would have brought the club into huge problems with FFP.

So what of FFP?

If these accounts are to be accepted, then the club are in the clear. Although the club have booked a profit within the year, without the sale of Hillsborough it would have lost around £35.5m with VAT and if you add that to the losses from the two previous years, that would have taken the losses to £66m compared to an FFP allowance of £39m.

And what would that have meant?

In all likelihood, such a breach of FFP regulations would result in a deduction of 12 points. If enforced during the 2017/18 season, they would have finished in 19th place on 45 points. To be clear, though, the club appear to have sidestepped this issue with the sale of the stadium.

How much was being spent on wages in that time?

For every £100 the club made during 2017/18, the club spent £160 in wages, a figure Keiran described as “eye-watering”. Compared to other clubs in the division, Wolves (£192 per £100), Reading (£197 per £100) and Birmingham (£202 per £100) were all shelling out more, with Hull City (£55 per £100) the lowest wages-against-income spenders.

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Keiran said: “The wages spent put them within the top eight spenders in the division. The average wage bill in the Championship was £33m and Wednesday’s was £42m. It’s high, but it was no higher than any of the clubs that had parachute payments, for example. Villa spent £73m, Fulham spent £54m, but they got promotion benefits.”

Are these accounts a concern for Wednesday fans?

Over to Keiran: “I think these accounts are par for the course,” he said, “the good thing from a Sheffield Wednesday point of view is that Mr Chansiri continues to pump money into the club, he lent them a further £40m during the season as well as the sale of the ground.

“You can compare them to other clubs that have owners that are essentially asset-stripping and trying to get as much money out of the club as possible, Chansiri seems to have an awful lot of cash that he seems happy to continue putting into the club. In terms of the club’s existence, I don’t think there are any issues, providing Mr Chansiri continues to support the club in the way he is doing.

“There is no reason to suggest he will do otherwise and he is continuing to bankroll the club.”

Why are the club releasing these figures now?

The long wait for these accounts have seen the club placed under transfer embargo and they are months overdue, so why today? Keiran said: “It’s a good day to bury bad news. People in football aren’t necessarily that interested in numbers and accounts – on a day that a new player has been unveiled and there’s speculation over a club’s manager – I don’t think it is any coincidence that they’ve chosen to release the accounts today.”

So why are the club spending in this manner?

Put simply, Wednesday are spending this heavily because they want to play in the Premier League. Keiran said: “The accounts overall show just how difficult it is to compete in the top half of the Championship. You can take the approach of Rotherham and Millwall and Preston who have owners that put in a little bit of money with the aim of avoiding relegation.

“But if you really want to compete, unless you get really lucky on a couple of fantastic loan signings as Huddersfield did, realistically you’ve got very little chance. Whilst the numbers are eye-watering, it’s what you have to do if you want to finish in the top six.”

What happens next year?

FFP allow losses of no more than £39m every three years, meaning that taking into account the performances of 2016/17 and 2017/18, the club will have to post accounts with losses less than £20m to avoid breaching those regulations.