Sheffield Wednesday generated a profit of £38m (€42m/$47m) from the sale of its Hillsborough stadium, according to the English Championship football club’s latest accounts, but the buyer’s identity remains unclear.
The club was given a so-called “soft transfer embargo” after failing to hand in its annual accounts for the 2017-18 season on time – meaning the EFL, which operates the Championship, has to ratify any new signing during the current transfer window.
Although the accounts for the year in question have now been submitted, the EFL still has to approve them before lifting the embargo – and football finance expert Kieran Maguire, a lecturer at the University of Liverpool, told the Sheffield Star that there could be “potential problems” with the stadium sale.
The club reportedly sold its ground to owner Dejphon Chansiri earlier this year before leasing it back in order to meet the EFL’s finance and sustainability rules that prevent clubs from recording losses of more than £39m over three years.
However, although the accounts state that Hillsborough was sold for about £60m during the 2017-18 period in question to deliver a £38m profit, they do not state the identify of the buyer.
Moreover, the newspaper adds that, according to the Land Registry, the club still owns the venue, which has a capacity of nearly 40,000, while the accounts do not indicate that any cash was brought in after the sale.
Other clubs, like Aston Villa and Derby County, have previously sold their stadia to companies associated with their owners in order to meet the EFL’s financial regulations.
Maguire said: “When I’ve looked at the accounts of both Derby and Villa, I’ve seen that they’ve sold the stadium and then pretty much straight away received the cash. Sheffield Wednesday appear to have sold the stadium, we don’t know yet to whom, and they don’t appear to have been given the cash. Though it could be that that cash has now been received.”
With regard to the EFL signing off the accounts, and therefore lifting the soft transfer embargo, Maguire said: “I think the issue will be the stadium sale – there are potential problems there – but the good news is that the EFL appear to have signed off on the stadium sales at Aston Villa and Derby County. To be consistent they should approve the sale of Hillsborough.”
According to the latest accounts, the club became a wholly-owned subsidiary of a Hong Kong-registered company, Sheffield Wednesday Holdings Ltd., last month.
The accounts state that the club generated an overall profit of £2.6m in 2017-18 with turnover increasing from £23.4m to £25.2m, although £1.2m of the total was due to the financial year being extended by two months.