Sheffield Wednesday’s 2020/21 accounts explained in plain English: Half-a-million lost per week, FFP and ‘doing the sensible thing’

We’ve called in football finance expert Kieran Maguire, lecturer at Liverpool University and one half of the Price of Football podcast, to drag his expert eye over Wednesday’s accounts.

It’s important to remember these accounts are from last season, which was of course played behind closed doors.

In plain English, here are the key talking points explained..

So, what are the headline takes?

The eye-catching figure is a loss of £25,780,000, a figure up from the £24,084,000 that was lost in 2019/20.

Over to Kieran to put this into context: “The main thing here is that revenue almost halved and that is certainly linked to the impact of Covid and the almost total loss of matchday revenue.

“The wage bill did come down, but as of last season they were still spending £209 for every £100 of income. That’s scary on two levels; that number itself but also that there are clubs in the Championship that are in a far worse situation than Wednesday.

“That wage bill will come down considerably in that it’s clear a number of big-ticket players left. Nearly £18m worth of players left in terms of what they cost Wednesday.

“They’ve not quoted Covid losses per se, but there’s no evidence that they’ve ‘done an Everton’ to claim huge Covid losses.

“They’re fully aware that the EFL are quite forensic in their approach and Wednesday appear to have done the sensible thing.”

There’s a huge drop in wages spent..

Wages and salaries spent by the club fell dramatically from £30,036,000 to £21,135,000 on the previous season, a tumble of almost £9m.

The likes of Fernando Forestieri, Steven Fletcher, Kieran Lee, Atdhe Nuhiu, Sam Winnall and Morgan Fox were all cleared off the wage bill.

“These wages put Wednesday certainly in the bottom half in terms of what they shelled out,” Kieran said on the club’s standing compared to last season’s Championship rivals.

“I don’t know what the model is at the club in terms of bonuses and so on, but in terms of my figures, based on estimates from the data we have available, I reckon Wednesday were paying an average of around £11,000 per week in a division where the average is about £15,000 per week.

“Wednesday used to be fairly big hitters by Championship standards, so it looks as if the wages are coming under control and that was what was needed.

“The TV money in this season will drop from around £7.5m to £1.5m in League One. Hopefully from a Wednesday point of view they’ll be bouncing back towards Championship figures next season of course.”

What about the stadium stuff?

Remember the furore over the sale of Hillsborough that lead to a points deduction that effectively relegated Wednesday? Gladly that’s in the rearview mirror in some respects, but the financial legacy of the deal lives on.

“They’re still owed £30m by Chansiri for the stadium,” Kieran noted.

“He was due to pay back £7m per year but he paid bigger instalments earlier partly because the club needed the cash because of the significant losses.

“He’s already paid four instalments, essentially half the sale proceeds of the stadium.

“It’s also noticeable that the club have been paying him back in terms of loans, £5.5m of whch he has re-lent about half of that according to these figures.

“The club are paying rent of around £1.5m per year on Hillsborough, but that’s something that we knew before.”

Wednesday have been stung by FFP points deduction before – is there any chance of that happening here?

Panic not, Wednesday fans. Though the idea the club will be able to go rampant in the transfer market in the summer might have to be parked.

“By the time you factor in the Covid allowances, they’re just about OK,” Maguire said.

“If they’re promoted back to the Championship through the playoffs, they will not be in a position to splurge because they didn’t have a lot of headroom with respect to FFP to begin with.”

Is this a move towards the more ‘self-sustainable’ model Chansiri has spoken about?

Speaking to the Sheffield Wednesday Supporters Trust last year, Chansiri spoke about a shift to a more ‘self-sustainable’ model at S6.

So are the 2020/21 accounts a step in that direction? Over to Kieran: “In the sense that the club has managed to get the wage bill down, yes it is.

“The wage bill of £25m would have to come down to make the club sustainable – probably by another £10m – and a year in League One may well allow the club to reset.

“The problem you have is that once you get back into the Championship, if you want to be self-sustainable, you’re going to have to be paying wages that are substantially less than those of others clubs.

“The average wage bill in the Championship is £32m. To be roughly sustainable, I’d suggest Wednesday would have to be spending somewhere in the region of £14m or £15m.

“It then becomes a case of spending money smarted; we’ve seen Luton and Coventry do it, so it can be done.

“Whilst that might not be as glamorous or exciting, but it allows supporters to sleep at night.”

It sounds as if these aren’t the horror genre accounts we have seen in the past at S6?

“Under the circumstances,” Kieran said, “whilst it’s frightening that the club lost half-a-million pounds per week, I don’t really see what else they could have been expected to do because they had such big wage players on the books with nobody willing to take them off the wage bill.

“They survived the season, they’re still in existence and they’re now in a better position – if they come up – to work towards a more sustainable model going forwards.”