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The former Newcastle owner Mike Ashley is preparing a bid of about £10m for Sheffield Wednesday in the hope of securing a quick deal. The sale of the Championship club is being managed by the administrator Begbies Traynor, which was appointed last month to run Wednesday by the owner, Dejphon Chansiri, as an alternative to liquidation after he failed to pay players and staff on time in five of the past seven months.
In documentation circulated to potential buyers last week, Begbies Traynor demanded they demonstrate access to £50m in proof of funds in order to be considered, but the sale itself is an open auction with the ultimate price determined by the level of the bids. Ashley is understood to have provided sufficient proof of funding to enter the process, enabling him to begin conducting due diligence and giving him access to Wednesday’s accounts and data room.
The 61-year-old has the advantage of being known to the English Football League meaning, if a sale price is agreed by Begbies Traynor, it would likely approve the transaction quickly as there are no questions over the source and sufficiency of his funding.
Ashley has not been directly involved in football since selling Newcastle to Saudi Arabia’s Public Investment Fund four years ago, although he did buy Coventry’s CBS Arena the following year, which he subsequently sold back to the club for £40m this summer, more than double the purchase price.
Ashley has made no secret of his strategy of targeting distressed sporting assets, with Wednesday undoubtedly fitting this profile. The Frasers Group director previously held talks with Derby and Reading when they were facing financial difficulties in recent years before their sales to Nigel Clowes and Rob Couhig respectively.
Ashley will face competition for Wednesday, which is likely to drive up the price, with Kris Wigfield of Begbies Traynor saying this week: “There are already four or five interested parties that look like the real deal.” One of them is believed to be the American billionaire John McEvoy, who holds minority stakes in the National Hockey League team Nashville Predators and Major League Baseball’s Colorado Rockies, while there is also interest from at least one British and one other American group.
Begbies Traynor, which has previously sold Bolton, Wiganand the rugby union club Worcester Warriors, is targeting a quick sale, but under EFL rules Wednesday have to remain on the market for at least 28 days after entering administration, which took place on 24 October. “By the end of November, if things go well, we might know who’s going to buy the football club,” Wigfield said.
Wednesday appear doomed to relegation to League One after being docked 12 points by the EFL for entering administration, which left them on minus-six points at the foot of the table, with further sporting sanctions expected to follow for Chansiri’s financial misdemeanours.
An independent commission has been appointed to hear charges relating to the late payment of player wages last March and May, while after an EFL regulation change in the summer, an independent club financial review panel will determine the outcome of charges regarding the late payment of wages in June, July and September. Both cases are likely to lead to further points deductions, while Wednesday are also prohibited from paying fees for players until the summer of 2027.
