Sheffield Wednesday’s financial position examined - and when to expect their accounts

Last week Owls owner Dejphon Chansiri announced losses of around £10m in each of their two years in League One - a sharp dip on the losses experienced in their previous Covid-impacted campaigns.

Their latest accounts will run for the 2021/22 financial year and are to be expected in the coming weeks.

Here’s a run-through of what we know about where Wednesday are at, what the regulations are and what is all means in terms of the financial regulations.

So, where are Sheffield Wednesday at financially?

As is the case with most businesses, accounts of football clubs are made public to Companies House up to one year later on, meaning the nuts and bolts of a club’s live finances are out of date from the current live position when that time comes. The next set of yet-to-be-published Wednesday acounts will cover the 2021/22 season - Wednesday’s first back in League One following relegation and the return of supporters.

We do have a public insight into the current state of the club’s finances, however.

Speaking at a fan forum last week, Owls chairman Dejphon Chansiri described losses of around £10m in each of their two third tier campaigns.

While that may sound initially eye-watering, those losses have nosedived from previous campaigns; as detailed by The Star last May, Wednesday posted losses of £25,780,000 in the 2020/21 relegation season, a figure up from the £24,084,000 that was lost in 2019/20.

The latter figures were heavily impacted by the nature of Covid-19 - with clubs stripped of ticket revenue, commercial revenue, shirt sales and more.

What does that mean for this coming season?

Heading into the next financial year, Chansiri spoke about the need to stay within the constraints of Profitability & Sustainability regulations, which allow losses of £39m on a three-year rolling cycle without sanction.

Scaled-back losses during their time in League One appears to have earned the Owls headroom on that basis as they prepare to re-enter the more stringent realities of P&S requirements in the Championship.

It is important to stress that losses presented and submitted to Companies House are very different to P&S losses - those public accounts do not routinely take into account depreciation, Covid add-backs or kick-backs for community ventures awarded by authorities.

When can we expect the next round of accounts?

As per EFL regulation 16.2, the deadline for EFL accounts differs for clubs in the Championship and those in League One or League Two.

Where recent accounts have been posted for seasons spent in the Championship, Wednesday have been given until the March following the end of the financial year of said accounts to publish to the EFL before they face possible punishment.

With financial penalties for handing over accounts to Companies House relatively small in business terms, Championship clubs including Wednesday have often published later than the deadline put in place put in place by Companies House. In football terms, it is the EFL sanction clubs seek to avoid. Such sanctions can include transfer embargoes.

The fact that Wednesday were a League One club in the 2021/22 season means the accounts must be submitted to the EFL and Companies House simulteanously. The deadline for this handover is July 31 this year.

As per Companies House, Wednesday have recently changed auditors - following the retirement of previous auditors - which could in theory extend the audit process.

But at the recent fan forum, Chansiri reassured supporters the accounts would be submitted soon and there is nothing to suggest that the accounts won’t be filed on schedule, thus avoiding any potential penalisation, next month.

What does this all mean for FFP - or more accurately, P&S?

Well strictly-speaking that we’re not sure of - and won’t even when the accounts are submitted and published - though the £10m figures indicate a positive outlook going forward.

While FFP has often been used as a sort of shorthand term for financial rules, it is Profit & Sustainability rules that Championship clubs must abide by and this is where the £39m-over-three-years figure comes in.

What is important to stress is that accounts submitted to Companies House and the EFL are not the numbers that count towards P&S.

P&S accounts are not published by clubs as a matter of course and include add-backs and other figures that would not be included in the more public-facing accounts.