The EFL is expected to review its insolvency policies following the takeover at Sheffield Wednesday amid anger from some clubs that the Owls avoided a 15-point penalty, despite breaching the league’s agreed policy when exiting administration.
Wednesday’s former owner, Dejphon Chansiri, is owed a quarter of the £64m (£16m) he’d given to the club in loans during his tenure but new owner David Storch refused to pay him, feeling that the Thai businessman had left the club in a parlous state. If Storch had paid Chansiri what he was due, that would have more than doubled his purchase price.
However, Sky Sports News can exclusively reveal that an offer remains on the table for Chansiri, which is worth several million pounds, and would be paid if Wednesday were to achieve promotion back to the Championship at the first attempt.
The deal is similar to the one that Chansiri himself agreed with his predecessor, Milan Mandaric, when he bought the club in 2015.
Sky Sports News understands Storch’s offer has a short shelf-life and that Chansiri will need to accept the terms quickly before the deal expires later this month. But it was a crucial part of the EFL board’s decision not to impose a points deduction that the offer was credible and still available to Chansiri.
Amidst a party atmosphere at Hillsborough on Saturday for the final game of the season, the club put a countdown on the big screen where the 15-point penalty was reduced point-by-point, accompanied by repeated loud cheers from the Owls supporters.
However, in reality, the punishment had never been decided or applied by the EFL, so there was no penalty to remove.
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Sheffield Wednesday fans celebrate as the club announce the completion of David Storch’s takeover, a deal that secures the club’s future following their relegation to League One with the EFL also waiving the club’s additional 15-point deduction.
Instead, the EFL guidelines state that new buyers have to make every reasonable attempt to clear their debts, with football creditors and the HMRC needing to be paid in full, and other creditors being paid at 25p to the pound.
What convinced the EFL to waive the points penalty in Wednesday’s case was Storch’s attempts to negotiate with Chansiri, and evidence he provided that proved the former owner was inflexible and was not prepared to talk.
In fact, Sky Sports News has been told that, when shown Storch’s offer, Chansiri contacted the administrators to demand that they put the club back on the market and seek a new buyer for a higher price, even though it was clear that such a move would seriously risk the club going into liquidation.
If Storch’s deal hadn’t gone through when it did, with revenue streams about to collapse at the end of the season, there were real doubts about Wednesday’s existence.
A general view of Hillsborough, home of Sheffield Wednesday
A number of other Championship clubs are unhappy that Wednesday have avoided a points deduction for the start of next season in League One. Those clubs have chosen to remain anonymous.
That is why the EFL is expected to hold new talks with clubs before the start of next season, where the issue of the insolvency policy will be discussed.
The current format was the choice of the clubs when it was last debated in 2023, following Derby County’s exit from administration 10 months before, when David Clowes bought the club.
In that instance, former owner Mel Morris had agreed to waive much of the money he was owed as a creditor, having put over £200m of his own money into the club, before ultimately placing it in administration.
Some current Championship clubs are unhappy that clubs like Derby had to reach an agreement with the outgoing owner to avoid a points penalty, whilst Wednesday have failed to do so with Chansiri, and have not yet been punished.
The EFL board was satisfied that Storch had made every possible attempt to negotiate with Chansiri, and that the club should not be punished for the inflexibility of its predecessor.
However, several clubs feel there is a problem with the current insolvency policy, because it is the only area of the EFL guidance where the board can use its discretion to decide whether a points penalty is introduced or not.
For all other matters, such as PSR breaches, the ultimate decision is taken by the Club Financial Reporting Unit (CFRU), which is, crucially, independent of the league organisers.
