Sheffield Wednesday unpaid wages, furlough, transfer embargo, contract issues EXPLAINED
Sheffield Wednesday are back in the headlines for the wrong reasons after it was revealed senior players are considering handing in their 15-day notice as their unpaid wages mess continues.
But where are we up to with things? What happened with the furlough? Are the club likely to emerge from their transfer embargo?
The Star spoke to football finance expert and lecturer Kieran Maguire, who makes up one half of the Price of Football podcast, to get some plain-English insight on the situation at S6.
In a nutshell, what’s happened?
Under FIFA rules, football players can hand in their notice to walk away from their contracts if they are left unpaid for a period of two months.
As exclusively revealed by The Star yesterday, some senior first team players at the club are considering this course of action. Should the club be unable to come to an agreement or pay the player what they are owed within 15 days, that player is effectively entitled to walk away from their contracts as a free agent.
These are under the terms of new rules laid out by FIFA designed to protect players.
“FIFA have done two things,” explained Maguire. “Firstly they changed the rules in June 2018, so now it is easier for a footballer to walk away from a contract if it's not being honoured.
“Secondly they've set up a £12m fund to help footballers who have not been paid, which isn't really aimed at the EFL and the Premier League, it's aimed at some of the other countries that FIFA are responsible for. That was set up last year in response to Covid.”
Have players walked away from contracts in this way before?
Not in the UK, as far as Maguire is aware. Things almost came to a head during Bolton Wanderers’ well publicised financial issues in 2015. Speaking in November of that year, then-manager Neil Lennon said: “They can give the club two weeks’ notice.
“That is their right. Obviously at this time of year it’s a huge concern if they’re not getting paid. We need something done very, very quickly.
“They are well within their rights, obviously.”
In Wednesday’s financial position, Maguire said, it would be unthinkable to lose some of the players currently on their books not only from a footballing perspective, but from an accounting standpoint.
He told The Star of the dangers of a potential ‘fire sale’ situation, particularly in a depressed Covid market, in which clubs are forced to sell players for less than their value in order to get cash through the door.
He said: “If we look at Bolton, they were delaying, but Ken Anderson was quite a wily fox and they never quite got to the situation where a potential asset was lost.
“The issue from a Wednesday perspective is that if you have players who have existing contracts that aren't expiring in the summer and so are of value to the club, you are risking losing assets in a similar way to a Bosman.”
What’s happening with the furlough situation?
The Star revealed last week that Wednesday and other clubs were considering placing players on furlough, potentially for one month during the summer, in a bid to save cash.
Reports in the national media later suggested the club’s request to players to take furlough had come as a shock and had been rejected.
Across British football, Maguire said, it hasn’t been uncommon for clubs to take this action, though it would obstruct pre-season plans if utilised beyond the summer break.
Wednesday are understood to be back in training at the end of this month and have a friendly lined up against Celtic on July 7.
“In the National League and in the lower leagues there could be a lot of that [furloughing] this summer,” Maguire said. “But what's important to remember is that the nature of the scheme means that you cannot work, therefore if matches are taking place, you can't really apply for furlough.
“I've seen extensive evidence of clubs taking advantage of the furlough scheme, though they've never expressly said it's been applied to players.
“We certainly saw it in Scottish football when they went into hibernation for a lot longer than English football. If you've got academy players and youth players that aren't playing matches given the present situation, it kind of makes sense. There is certainly anecdotal evidence this is taking place.”
And what about the embargo?
Wednesday are one of a handful of clubs to have been placed under a transfer embargo due to their late submission of their accounts for the 2019/20 season. They did so in line with a Government extension of three months, put in place for all businesses in response to the coronavirus crisis.
It has always been maintained that the satisfactory handing over of these accounts would result in an immediate lifting of any sanction, as appears to have been the case with Coventry City last week.
As revealed by The Star, Wednesday can still go about signing players on a free transfer and on non-fee loan deals in order to make up a squad of 23 ‘established players’.
Maguire said: “The EFL seems to be taking a very hard line with regard to this given that [Chancellor] Rishi Sunak has said there's a global pandemic and he's giving businesses another three months to submit their data. The EFL hasn't gone along with that.”