EFL and Premier League may have to revise insolvency rules – Wigan administrator
There are fears Wigan will not be the last EFL club to suffer extreme financial difficulties this year.
Football’s insolvency rules and its regulations on foreign ownership may need to be looked at to prevent a surge in clubs going to the wall during the coronavirus pandemic, the administrator of Wigan has said.
The Championship side were placed in administration on Wednesday and face a 12-point deduction either this season or next, depending on where they finish in the table.
Administrators from Begbies Traynor are now reviewing the club’s finances and initially trying to ensure the club can complete their remaining six fixtures this season.
They are also seeking credible new buyers and to investigate why the club has been put in administration less than a month after it was sold.
Gerald Krasner, one of the administrators at Wigan, agreed the Covid-19 outbreak was only “an element” of what had gone wrong at the club, but said the English Football League and Premier League may need to look again at their regulations because of the exceptional circumstances clubs are facing.
“It’s my personal view that there are a number of clubs in the lower divisions, Leagues One or Two, that may not survive by coming back, and there is possibly at least one more Championship club that may seriously be thinking about doing the same (as Wigan),” he warned.
“We’re living in such peculiar times that the EFL and the Premier League may in the short term have to revise their insolvency rules if a number of clubs start going over, and also start looking at foreign ownership a bit more.
“I think the foreign ownership comes (as a problem) if someone is sat 5,000 miles away. It’s much easier to do things than if you live in the town where you own the football club.”
Krasner said the EFL would need to decide quickly whether it would make allowances or stick to its guns on insolvency.
He asked: “If six clubs go into administration are they going to start really penalising all of the clubs because of this pandemic? There would be massive arguments if they did.
“But if they penalised Wigan and didn’t penalise someone else, that becomes a bit unfair doesn’t it?
“They ought to have a policy that says ‘no matter how many clubs go into administration, these rules will apply’ or ‘no, we’re going to have a think for a month and then come up with what we think should happen’.
“Because let’s be honest if next season starts behind closed doors, how are these clubs going to survive unless the owners put their hands in their pockets?”
The chair of the Digital, Culture, Media and Sport (DCMS) committee Julian Knight said he feared 10 to 15 clubs could be in danger, and on Wednesday called on the Premier League to provide “leadership” and assist clubs lower down the pyramid.
The league’s chief executive Richard Masters told the DCMS committee on Tuesday there had been no approach from the EFL regarding any additional funding beyond existing solidarity payments.
The Prime Minister’s official spokesman said: “We hope that a buyer can be found for Wigan Athletic. Our thoughts are with its staff, fans and the local community at what is a very difficult time.
“We recognise the impact of coronavirus on professional sport, including football, and we have been working closely with sporting bodies to get sport back up and running safely.”