Sheffield Wednesday and Dejphon Chansiri: Trying to make sense of Owls’ current plight

At the time of writing the Owls are on the brink of a three-window transfer ban due to the late – or non – payment of players and staff at the club for May, and it’s understood that they are dangerously close to breaching 30 days of defaults over the last 12 months and be banned from registering players for 18 months.

All of this comes amid widespread speculation about a potential takeover after Chansiri rebuffed at least two bids for the club from a Florida-based consortium, with many being left confused as to why he’d be turning down offers when he isn’t currently in a position to pay people what they’re owed. Meanwhile, a seven-figure upgrade is being undertaken at Hillsborough and the club’s training ground.

We spoke to football finance expert, Kieran Maguire, for his take on the state of things, how much the market suggests the Owls are worth, and why he might be holding out for more than has been put on the table so far.

“Since Dejphon Chansiri acquired Sheffield Wednesday Football Club in 2015, the club has lost somewhere in the region of £150 to £160 million,” Maguire told The Star. “Those losses have been covered by the owner. This might be one of the issues that is slowing down a deal, because I suspect he'll be looking to recoup the losses that that he made during his period of ownership.

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“My concern is that the club is simply not worth that sum of money. If we take a look at recent deals that have gone through, Rangers went through at an estimated £150 million, but they've got revenue of £90 million. We saw Newcastle going for £300 million on revenues of £150 million, and Derby County went for £60 million on revenues of £30 million. So the clubs are going for somewhere between 1.5-2x their revenue, and you then make adjustments for the state of the assets that you're acquiring. And if we're honest, there's, a lot of potential for improvement at Hillsborough.

“Sheffield Wednesday's revenue in 2024 was £26 million, so on the basis of this 1.5-2x revenue, that probably values the club at somewhere in the region of £40-50 million. If the owner is looking for substantially more than that – and listening to some of the people who claim to have had negotiations, he is certainly asking for far more than anybody he's willing to bid - I think he's going to struggle to sell the club.

“In the past we have seen situations where money has been put into club to cover losses, money acquired from third-party sources and therefore they have an obligation to repay those amounts when the club is sold. That could leave a shortfall, which is one reason somebody might play hardball as far as prospective buyers are concerned.

“Alternatively, in this case, Mr. Chansiri could genuinely believe that Sheffield Wednesday are a sleeping giant with huge potential, and there’s no doubt that they could fill the stadium in the Premier League - therefore he feels that if somebody wants to buy the club then there’s a case where he can extract more money from it. Especially if he doesn’t need to sell.”

“A football club is what somebody is willing to pay for it”

He went on to add, “Ultimately the price of a football club is what somebody is willing to pay for it, and if nobody is prepared to pay the asking price then the owner is at liberty to carry on as it is at present. But that is somewhat surprising given the recent issues in terms of late payment of wages.”

Naturally, given the predicament that the club finds itself in, some have wondered whether there is an immediate risk of administration… Maguire thinks it’s not a direct concern right now, but insists that it’s not something that should be taken lightly.

He explained, “There has been talk, and of course there’s nothing concrete - and I don’t think Wednesday fans should be getting worked up - about putting the club into administration. If that was the case then the day-to-day running of the club would be transferred to a set of professional managers, who are normally a firm of accountants who have experience of running companies in financial distress.

“The downside is that there would be an immediate penalty from the EFL, and the administrators would list all of the assets of Sheffield Wednesday Football Club. That doesn’t necessarily include the stadium of course, because that is rented from another company after Dejphon Chansiri in order to try and circumvent the PSR rules of the EFL.

“The first thing the administrators do is try and figure out who is going to pay them. They don’t do the job for love, so they have to get somebody who can underwrite their fees.

“If we look at Wednesday’s wages they are under far better control than they were in League One, but even so they’re still paying out over £80 in wages for every £100 that comes through the door. So it doesn’t leave a lot of money to pay for other things.

“The administrators will work out who is owed money by the club and they will also try and they will also try and get ongoing supplies to allow the club to continue to trade. Another downside to administration is not just the first points deduction, and their could be a further deduction if - on leaving administration - football creditors are not paid in full, and by that we mean amounts due to players and also other clubs.

“Other creditors, such as HMRC or other local suppliers - many of whom may have given goods and services on generous credit terms if they happen to be fans themselves - they have to receive a minimum of £25 for every £100 that they’re owed. Failure to do so would trigger a further 15-point deduction upon the exit of administration. It’s not a decision that should be taken lightly, and there would be job losses as well in all probability - so it’s not an easy get-out clause.”

Only a very select group of people know the exact thinking behind the whys and the whats at Hillsborough as things stand, and that’s unlikely to change. The club have been contacted for comment, but at the time of writing nothing has been said.

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