Phantom Owner: The Demise of Wigan Athletic
2836 days ago, Wigan Athletic was on top of the world. They had just lifted the FA Cup, delivering one of the greatest upsets in the history of the competition, beating the then reigning Premier League Champions Manchester City thanks to a last-minute Ben Watson goal. Today, they are 3rd last in League One. Where did it all go so horribly wrong?
Once owned by local magnate Dave Whelan, who bought the club in 1995, it was he who bankrolled the club’s ascension from League 1 to the Premier League. Under his ownership, Wigan won League 1 with a record 100 points in 2001 and then finished in the final automatic promotion place in 2004 to clinch a spot in the top division of English football.
For the following 8 years, Wigan established themselves in the mid-table of the Premier League. Their highlights were a 10th place finish in their debut season and an 11th placed finish in 2009.
By 2010 the club had declined to become relegation candidates. After surviving relegation by the skin of their teeth in 2010 and 2011, Wigan finally fell through the trapdoor in 2013 with their FA Cup victory against Manchester City bringing a close to the most successful era in the club’s history. A sustained decline followed, and in 2015, after only two seasons in the Championship, the club was relegated to League One. In response to this, Whelan relinquished the day-to-day running of the club to his 23-year-old grandson David Sharpe, who became English football’s youngest chairman.
Immediate promotion to the Championship and relegation back to League 1 followed. By 2018, the Whelan family had ceded the ownership of the club, relinquishing ownership to the Hong Kong-based International Entertainment Corporation (IEC) in a £22,000,000 transaction. IEC brought the club for £15,000,000 outright and loaned the club £7,000,000 more.
Once the ‘casino and gambling arm’ of Hong Kong conglomerate Chow Tai Fook, the majority IEC shareholder was the Cayman Islands-based holding company Brighten Path Ltd. This company was in turn controlled by Head and Shoulders Direct Investment Limited, the holding company for a Hong-Kong based brokerage firm. This subsequent firm was wholly controlled by Dr Choi Chiu Fat Stanley, a professional high-stakes poker player and the new ‘invisible’ owner of Wigan Athletic.
“We are proud to be the new owners of Wigan Athletic Football Club and we feel excited and privileged to have the opportunity to write the next chapter in the club’s history.”
The footballing world was perplexed at IEC’s decision to invest in a club who was on the wane. Nevertheless, the concerns of Wigan’s fan base were soon allayed when IEC CEO Yang Min Zhang announced that ‘“We are proud to be the new owners of Wigan Athletic Football Club and we feel excited and privileged to have the opportunity to write the next chapter in the club’s history.” Regardless, the obfuscation of the true source of the money which funded the club was a far cry from the public and familial ownership enjoyed under Whelan’s tenure. Despite this, Wigan achieved promotion back to the Championship under veteran manager Paul Cook in 2018 and would remain there in 2020 after finishing 18th with 52 points.
Eventually, IEC grew tired of their new investment, which was originally brought to ‘expand IEC’s business interests’. After posting a HK$ 93,293,000 loss in the fiscal year 2019 (equivalent to £8,800,000), and with Wigan contributing to HK$ 11,000,000 (equivalent to £1,200,000) of these losses, IEC decided to cut Wigan loose.
Then, disaster struck. SARS-Cov-2 began spreading worldwide at an uncontrollable rate taking the lives of thousands of people. Many governments, including that of the United Kingdom, decided that organized sport was incompatible with containing the spread of the pandemic. On the 13th of March 2020, the juggernaut of English football was brought to a halt.
With no ticket money entering the stadium, an absence of TV money and the Championship’s notorious reputation for being a division harsh on finances all accentuated Wigan’s loss-making tendencies. In the fiscal year 2019, the club reported a £9,000,000 loss, with the losses for 2020 expected to be even greater once the records are released.
As a result of this, IEC put up the club for sale. For many months, no prospective suitors appeared but on the 4th of May 2020, IEC announced that the club was sold for £17.5 million. The new owners were the Next Leader Fund, an obscure Hong-Kong based investment vehicle whom little is known about. In addition to the £17.5 million paid for the purchase of the club, NLF also paid off IEC’s £24,000,000 loan, for a total investment of £41,000,000 in the football club, an astounding amount of money by any means. What was more astonishing was what happened next.
Initially, a joint venture between Dr Choi Chiu Fat Stanley and Au Yeung Wai Kay, a shadowy Hong-Kong businessman whom nothing is known about, Choi’s shares in NLF were brought out by Kay mere days after the ownership of the club were transferred to NLF. Rather than providing the vital funding necessary for the club to survive the challenging period brought about by Covid-19, Kay completely withheld any promised funding, even reportedly contacting insolvency firm Begbies Traynor the day prior to his completion of the takeover of the club to enquire whether the club could be put into administration.
With the club declared insolvent a week after NLF’s purchase and formally put into administration on the 30th of June 2020, Wigan automatically incurred a 12 point penalty. This penalty relegated them into League 1, despite finishing 14th and recording a club record 8-0 win against Hull City.
Almost 6 months later, the club still remains without an owner.
A fire sale of the club’s best players, including Antonee Robinson to Fulham and Sam Morsy to Middlesborough, combined with £700,000 generated by Wigan’s Supporters’ Trust has kept the club alive but on life support. Several prospective bids for the club have fallen through, most notably by Spanish businessman Felipe Moreno, owner of second division Spanish side Leganes. In the final twist of a depressing tale, Kay has waived almost £36,000,000 of loans made by NLF to the club, with the businessman recouping only £5,000,000 dollars from his ill-fated investment.
The sad tale of Wigan is one of incompetence and gross neglect on the part of the owners, but it also serves as a cautionary tale that in the current challenging sporting environment, no club is entirely safe from financial ruin.
