Athletic article regarding the recent stadium charge and sale.

[Wor’Jackie]

Apologies if this has already been dissected and settled. Just noticed that this and out today, seems like a fairly easy explanation of what’s going on.

 

Article begins:

 

Sheffield Wednesday’s owner Dejphon Chansiri is in the process of securing a debt against the club’s Hillsborough stadium, with a search to protect a “pending charge” made at the Land Registry on September 30.

But what does it all mean, and what are the implications for the club? The Athletic explains…

What has actually happened?

Until June last year, Hillsborough was owned by Sheffield Wednesday. However, it was then bought by their owner Chansiri, via a company he owns called Sheffield 3 Ltd.

Now, Sheffield 3 Ltd has in effect taken out a loan against the stadium. It’s not quite the same as a mortgage but can be explained in similar terms, according to Dr Dan Plumley, a senior lecturer in sports finance at Sheffield Hallam University.

“There’s now a charge which relates to the stadium which is owned by Sheffield 3 and the company that is named as the link is New Avenue Projects Limited,” Dr Plumley says. “As a simple business transaction, it’s easily explained by comparing it to a mortgage on a house. If you were to do that, you would obtain your mortgage from a bank, you’d pay that back with interest. So it’s a case of the bank has the mortgage, you live in the house and keep up with the repayments. That’s the easiest way for people looking at it that don’t cover financial issues.”

Why has Chansiri taken this step?

At this stage it’s unclear, although it’s no secret that football clubs across the country are struggling while they are unable to allow fans in to watch matches. The EFL estimates its clubs, such as Championship side Wednesday, are losing £20 million a month. And even in usual circumstances, this type of loan is something that happens more than most fans might be aware.

“Lots of clubs are struggling because of cash flow in terms of what’s happening with the pandemic because there’s still no fans in grounds,” says Dr Plumley. “Everything will be affecting cash flow, things like staff coming off furlough schemes (in which the government covers a percentage of employees’ wages) and the club will have to pay them now when they can’t get access to support for that.

“I have seen the theory that this could potentially raise short-term funds for the club. That’s a little bit speculative but not beyond the realms of possibility. For example, if you want to buy a car, you might take out a loan to buy the car and then you pay that off rather than paying directly for the car.

“We don’t know what it looks like for Wednesday yet. Clubs have done it in the past, some clubs have done it recently and will continue to do so.

“The basic financial premise is that it’s not unusual for organisations to borrow against their assets. In this case, you would like a football club to own all of its assets but in terms of ways of generating finance and doing things differently under challenging circumstances, this happens. At the moment it’s not a cause for concern, providing the owner and whoever needs to meet payments can continue to do so.”

So is there a scenario where Wednesday could be forced out of Hillsborough?

In theory, yes. If future repayments are not met, the stadium would be at risk of being sold by the owners of the debt. But for the near future, financial experts stress there is no cause for concern.

“There’s nothing to panic about in the immediate term because debt in itself is not a bad thing, as long as you can service the payments on the debt,” says Dr Plumley. “Providing those payments are met, that’s just the way this will work. But we haven’t seen any of the figures yet to know about the instalments, the payments or anything like that. It’ll be a repayment structure, probably with interest attached and you need to meet the terms of that repayment.

“If you’re talking about the football club as a company, then this doesn’t affect them at the minute because the stadium is now owned by Sheffield 3 so, as things stand, if there are any repayments linked to the lender, that should be fulfilled by Sheffield 3. Obviously, we know that company has links to the owner of the club.”

Does this mean Chansiri’s on his way out?

No. There’s no suggestion that Chansiri is selling the club. Although he claimed he was putting Wednesday up for sale at a fans’ forum in December 2018, Chansiri insisted earlier this year that he is in this for the long haul and has no immediate plans to sell.

He has shown commitment to Wednesday by investing his personal wealth and has been praised during the pandemic for his support of club staff by topping up their wages from the 80 per cent government furlough to 100 per cent of their usual wage, saying, “Sheffield Wednesday is in my blood”.

Chansiri says he is in it for the long haul at Sheffield Wednesday (Photo: Nigel Roddis/Getty Images)

Who is the proposed financer for the charge against the stadium?

The pending charge has been registered by a company called New Avenue Projects Limited, which is owned and run by Nigel Weiss, a former finance lawyer. Weiss also owns a company called Good For Sport Limited, which provides finance services to football clubs and was previously involved in arranging loans for Laurence Bassini during his ownership of Watford in 2011-12. New Avenue Projects has been involved in matching clubs who need finance and lenders in the past and take a small commission for any deals.

Dr Plumley explains, “If you look at the company and the owner of that company, what they are is essentially an intermediary. They are a lender of finance and they operate in the sports industry.

“The potential reasons for that? If you look at what has happened in football over the last 10 or 15 years, banks are not forthcoming in lending to football clubs. They don’t tend to want to get involved because they are worried about clubs being able to make repayments. We know that a lot of clubs are not financially sound, so we’ve seen in sport, and in football, these third-party companies that are lenders of finance have become the norm because, historically, banks have been wary of lending to clubs.”

It’s worth noting that, at the moment, the charge is still pending, which means that the loan deal has not been completed, but it’s likely that it will proceed without any problems. Discussions between parties over the terms of an agreement of this kind usually take place in advance of anything being filed with Companies House or the Land Registry.

Weiss did not respond to a request for comment by TheAthletic.

Is this connected to Wednesday’s profit and sustainability charge?

Not exactly, according to Dr Plumley.

He explains: “Profit and sustainability affects the club, because that’s an EFL regulation. Where the stadium sits with Sheffield 3 is not really under the remit of P&S.”

The “pending charge” lodged with the Land Registry does, however, relate to Hillsborough and the timing of the stadium’s sale was, of course, at the centre of the P&S charge.

Sheffield 3 — the company Chansiri set up to buy the stadium — was incorporated on June 21, 2019, which is the same day the club’s accounts were filed. The sale went through a week later. However, this was a year after Wednesday accounted for it in their 2017-18 figures. Without the sale, they would have lost more than £57 million between 2016 and 2018 — £18 million over the £39 million profitability and sustainability limit for any three-year period.

Wednesday started this season on minus-12 points after losing their disciplinary hearing in June, where it was found that they should not have included the sale of Hillsborough in the 2017-18 accounts but in the following year’s instead. The club have appealed that charge.

Chansiri agreed to pay £60 million for the stadium, with a first instalment of £7.5 million due within a year, but it remains to be seen if that payment was made. Wednesday’s accounts for 2018-19, which were initially pushed back to July, have not yet been published owing to the coronavirus pandemic and the fact the club are still waiting for the hearing of their appeal against their points deduction. They will only face a nominal fine for filing them late and, should they lose their appeal, could well move the sale of Hillsborough to 2018-19 to ensure they meet P&S rules.

What have Wednesday fans made of the news?

There is widespread concern about what this may mean in the future, should Chansiri’s Sheffield 3 Ltd company fail to keep up with the repayments for the debt. The Sheffield Wednesday Supporters’ Trust has issued a statement asking the club for clarity on the situation and have put questions to the club regarding the ownership, liability and reasons for the loan.

In their statement, the Trust says: “Hillsborough has been our home for 121 years and means the world to us as a fanbase. It’s a place our members have shared joy, happiness and tears with family and friends. We’re open to hearing about the rationale for this decision, and would like to understand it with perspective and context — but without any explanation from the club, it appears to be a worrying direction of travel.

“We have, on the face of it, gone very quickly from owning our home and biggest asset, to selling it, and now in effect, having a mortgage.”

 

Article ends.

 

I understand why it’s being done, but it’s a another huge risk from Mr. Chansiri. I hope it pays off, but separating the club from it’s base doesn’t ring as a good thing to do.

[Guest mrbluesky]

Can I be the first...

 

The Pope is currently writing a follow up column to this.

[TodwickOwl]

59 minutes ago, mrbluesky said:

Can I be the first...

 

The Pope is currently writing a follow up column to this.

Love to know how long Popes dead has been knocking around on here for

 

Must be 15+ years now surely 

[areNOTwhatTHEYseem]

3 minutes ago, TodwickOwl said:

Love to know how long Popes dead has been knocking around on here for

 

Must be 15+ years now surely 

 

Probably since the pope died.

[DJMortimer]

3 minutes ago, areNOTwhatTHEYseem said:

 

Probably since the pope died.

 

67AD !?

 

[pazowl55]

15 minutes ago, TodwickOwl said:

Love to know how long Popes dead has been knocking around on here for

 

Must be 15+ years now surely 

No. Only been two weeks.

[areNOTwhatTHEYseem]

4 minutes ago, DJMortimer said:

67AD !?

 

 

It certainly feels that way every time it's rehashed on here, doesn't it?

 

File it alongside Terry Henfleet, cakeball, £350k etc. as jokes which have had their time.

[@owlstalk]

1 minute ago, areNOTwhatTHEYseem said:

 

It certainly feels that way every time it's rehashed on here, doesn't it?

 

File it alongside Terry Henfleet, cakeball, £350k etc. as jokes which have had their time.

 

To everyone else the joke gets funnier and funnier because it makes people angry about them 

 

 

[kirksandallowl]

Stopped reading after paragraph one where the first error is.

 

The ground is owned by Sheffield 3 Ltd, which is in turn fully owned by Sheffield 5 Ltd.  Sheffield 5 Ltd is owned fully owned by DC.

 

It may seem pedantic as ultimately it is owned by DC but when they claim to be explaining the facts and the information is fully in the public domain at companies house you would think they would get it correct being  "a senior lecturer in sports finance at Sheffield Hallam"

[areNOTwhatTHEYseem]

10 minutes ago, @owlstalk said:

To everyone else the joke gets funnier and funnier because it makes people angry about them 

 

 

 

I don't think anyone's angry about them, just bored by them.

 

It's like when that middle-aged, socially-awkward bloke at work finally says something which gets a laugh after he's had a few pints at the Christmas 'do', then spends the next ten years desperately trying to find ways to work references to it into conversations so they can relive the one time they didn't seem like a complete and utter vortex of charisma or personality.

[areNOTwhatTHEYseem]

15 minutes ago, pazowl55 said:

No. Only been two weeks.

 

 

Underrated post.

[slinger208b]

26 minutes ago, DJMortimer said:

 

67AD !?

 

The Pope lives!

 

Or is that Elvis?..

[Adem Poric]

3 minutes ago, areNOTwhatTHEYseem said:

 

I don't think anyone's angry about them, just bored by them.

 

It's like when that middle-aged, socially-awkward bloke at work finally says something which gets a laugh after he's had a few pints at the Christmas 'do', then spends the next ten years desperately trying to find ways to work references to it into conversations so they can relive the one time they didn't seem like a complete and utter vortex of charisma or personality.

 

What did you say at the Christmas do that was so funny?

 

 

 

 

 

 

 

 

Hahahahaha because jokes.

[dr. benway]

4 minutes ago, areNOTwhatTHEYseem said:

It's like when that middle-aged, socially-awkward bloke at work finally says something which gets a laugh after he's had a few pints at the Christmas 'do', then spends the next ten years desperately trying to find ways to work references to it into conversations so they can relive the one time they didn't seem like a complete and utter vortex of charisma or personality.

 

Didn't realise you worked with me

[@owlstalk]

7 minutes ago, areNOTwhatTHEYseem said:

 

I don't think anyone's angry about them, just bored by them.

 

It's like when that middle-aged, socially-awkward bloke at work finally says something which gets a laugh after he's had a few pints at the Christmas 'do', then spends the next ten years desperately trying to find ways to work references to it into conversations so they can relive the one time they didn't seem like a complete and utter vortex of charisma or personality.

 

 

To everyone else the joke gets funnier and funnier because it makes people angry about them 

[sonofbert2]

23 minutes ago, areNOTwhatTHEYseem said:

 

It certainly feels that way every time it's rehashed on here, doesn't it?

 

File it alongside Terry Henfleet, cakeball, £350k etc. as jokes which have had their time.

 

[areNOTwhatTHEYseem]

6 minutes ago, @owlstalk said:

To everyone else the joke gets funnier and funnier because it makes people angry about them 

 

You seem quite angry about the fact that nobody's angry about this.

 

[@owlstalk]

Just now, areNOTwhatTHEYseem said:

 

You seem quite angry about the fact that nobody's angry about this.

 

Cutting edge comedy there from the site's new self appointed comedy critic

[areNOTwhatTHEYseem]

Just now, @owlstalk said:

Cutting edge comedy there from the site's new self appointed comedy critic

 

 

So angry!

 

 

 

[Buddy Repperton]

 

2 hours ago, Wor’Jackie said:

Apologies if this has already been dissected and settled. Just noticed that this and out today, seems like a fairly easy explanation of what’s going on.

 

Article begins:

 

Sheffield Wednesday’s owner Dejphon Chansiri is in the process of securing a debt against the club’s Hillsborough stadium, with a search to protect a “pending charge” made at the Land Registry on September 30.

But what does it all mean, and what are the implications for the club? The Athletic explains…

What has actually happened?

Until June last year, Hillsborough was owned by Sheffield Wednesday. However, it was then bought by their owner Chansiri, via a company he owns called Sheffield 3 Ltd.

Now, Sheffield 3 Ltd has in effect taken out a loan against the stadium. It’s not quite the same as a mortgage but can be explained in similar terms, according to Dr Dan Plumley, a senior lecturer in sports finance at Sheffield Hallam University.

“There’s now a charge which relates to the stadium which is owned by Sheffield 3 and the company that is named as the link is New Avenue Projects Limited,” Dr Plumley says. “As a simple business transaction, it’s easily explained by comparing it to a mortgage on a house. If you were to do that, you would obtain your mortgage from a bank, you’d pay that back with interest. So it’s a case of the bank has the mortgage, you live in the house and keep up with the repayments. That’s the easiest way for people looking at it that don’t cover financial issues.”

Why has Chansiri taken this step?

At this stage it’s unclear, although it’s no secret that football clubs across the country are struggling while they are unable to allow fans in to watch matches. The EFL estimates its clubs, such as Championship side Wednesday, are losing £20 million a month. And even in usual circumstances, this type of loan is something that happens more than most fans might be aware.

“Lots of clubs are struggling because of cash flow in terms of what’s happening with the pandemic because there’s still no fans in grounds,” says Dr Plumley. “Everything will be affecting cash flow, things like staff coming off furlough schemes (in which the government covers a percentage of employees’ wages) and the club will have to pay them now when they can’t get access to support for that.

“I have seen the theory that this could potentially raise short-term funds for the club. That’s a little bit speculative but not beyond the realms of possibility. For example, if you want to buy a car, you might take out a loan to buy the car and then you pay that off rather than paying directly for the car.

“We don’t know what it looks like for Wednesday yet. Clubs have done it in the past, some clubs have done it recently and will continue to do so.

“The basic financial premise is that it’s not unusual for organisations to borrow against their assets. In this case, you would like a football club to own all of its assets but in terms of ways of generating finance and doing things differently under challenging circumstances, this happens. At the moment it’s not a cause for concern, providing the owner and whoever needs to meet payments can continue to do so.”

So is there a scenario where Wednesday could be forced out of Hillsborough?

In theory, yes. If future repayments are not met, the stadium would be at risk of being sold by the owners of the debt. But for the near future, financial experts stress there is no cause for concern.

“There’s nothing to panic about in the immediate term because debt in itself is not a bad thing, as long as you can service the payments on the debt,” says Dr Plumley. “Providing those payments are met, that’s just the way this will work. But we haven’t seen any of the figures yet to know about the instalments, the payments or anything like that. It’ll be a repayment structure, probably with interest attached and you need to meet the terms of that repayment.

“If you’re talking about the football club as a company, then this doesn’t affect them at the minute because the stadium is now owned by Sheffield 3 so, as things stand, if there are any repayments linked to the lender, that should be fulfilled by Sheffield 3. Obviously, we know that company has links to the owner of the club.”

Does this mean Chansiri’s on his way out?

No. There’s no suggestion that Chansiri is selling the club. Although he claimed he was putting Wednesday up for sale at a fans’ forum in December 2018, Chansiri insisted earlier this year that he is in this for the long haul and has no immediate plans to sell.

He has shown commitment to Wednesday by investing his personal wealth and has been praised during the pandemic for his support of club staff by topping up their wages from the 80 per cent government furlough to 100 per cent of their usual wage, saying, “Sheffield Wednesday is in my blood”.

Chansiri says he is in it for the long haul at Sheffield Wednesday (Photo: Nigel Roddis/Getty Images)

Who is the proposed financer for the charge against the stadium?

The pending charge has been registered by a company called New Avenue Projects Limited, which is owned and run by Nigel Weiss, a former finance lawyer. Weiss also owns a company called Good For Sport Limited, which provides finance services to football clubs and was previously involved in arranging loans for Laurence Bassini during his ownership of Watford in 2011-12. New Avenue Projects has been involved in matching clubs who need finance and lenders in the past and take a small commission for any deals.

Dr Plumley explains, “If you look at the company and the owner of that company, what they are is essentially an intermediary. They are a lender of finance and they operate in the sports industry.

“The potential reasons for that? If you look at what has happened in football over the last 10 or 15 years, banks are not forthcoming in lending to football clubs. They don’t tend to want to get involved because they are worried about clubs being able to make repayments. We know that a lot of clubs are not financially sound, so we’ve seen in sport, and in football, these third-party companies that are lenders of finance have become the norm because, historically, banks have been wary of lending to clubs.”

It’s worth noting that, at the moment, the charge is still pending, which means that the loan deal has not been completed, but it’s likely that it will proceed without any problems. Discussions between parties over the terms of an agreement of this kind usually take place in advance of anything being filed with Companies House or the Land Registry.

Weiss did not respond to a request for comment by TheAthletic.

Is this connected to Wednesday’s profit and sustainability charge?

Not exactly, according to Dr Plumley.

He explains: “Profit and sustainability affects the club, because that’s an EFL regulation. Where the stadium sits with Sheffield 3 is not really under the remit of P&S.”

The “pending charge” lodged with the Land Registry does, however, relate to Hillsborough and the timing of the stadium’s sale was, of course, at the centre of the P&S charge.

Sheffield 3 — the company Chansiri set up to buy the stadium — was incorporated on June 21, 2019, which is the same day the club’s accounts were filed. The sale went through a week later. However, this was a year after Wednesday accounted for it in their 2017-18 figures. Without the sale, they would have lost more than £57 million between 2016 and 2018 — £18 million over the £39 million profitability and sustainability limit for any three-year period.

Wednesday started this season on minus-12 points after losing their disciplinary hearing in June, where it was found that they should not have included the sale of Hillsborough in the 2017-18 accounts but in the following year’s instead. The club have appealed that charge.

Chansiri agreed to pay £60 million for the stadium, with a first instalment of £7.5 million due within a year, but it remains to be seen if that payment was made. Wednesday’s accounts for 2018-19, which were initially pushed back to July, have not yet been published owing to the coronavirus pandemic and the fact the club are still waiting for the hearing of their appeal against their points deduction. They will only face a nominal fine for filing them late and, should they lose their appeal, could well move the sale of Hillsborough to 2018-19 to ensure they meet P&S rules.

What have Wednesday fans made of the news?

There is widespread concern about what this may mean in the future, should Chansiri’s Sheffield 3 Ltd company fail to keep up with the repayments for the debt. The Sheffield Wednesday Supporters’ Trust has issued a statement asking the club for clarity on the situation and have put questions to the club regarding the ownership, liability and reasons for the loan.

In their statement, the Trust says: “Hillsborough has been our home for 121 years and means the world to us as a fanbase. It’s a place our members have shared joy, happiness and tears with family and friends. We’re open to hearing about the rationale for this decision, and would like to understand it with perspective and context — but without any explanation from the club, it appears to be a worrying direction of travel.

“We have, on the face of it, gone very quickly from owning our home and biggest asset, to selling it, and now in effect, having a mortgage.”

 

Article ends.

 

I understand why it’s being done, but it’s a another huge risk from Mr. Chansiri. I hope it pays off, but separating the club from it’s base doesn’t ring as a good thing to do.

Personally, I don't find this situation very "funny"!