Sheffield Wednesday has seen its 12-point deduction halved despite losing its appeal over breaching English Football League accounting rules in relation to the £60m sale of its Hillsborough stadium.
The second-tier Championship club was found to have violated Profitability and Sustainability rules by an EFL-appointed panel in August, with a 12-point sanction imposed for the 2020-21 season. At the time, the Independent Disciplinary Commission found irregularities with the club including profits from the sale of Hillsborough in its financial statements for the period ending July 2018 – an action that meant it stayed within financial fair play rules.
In a statement released on Wednesday, it was announced the panel had rejected the club’s appeal related to matters surrounding the stadium sale and did not agree with the club’s assertion that a points deduction should not have been imposed. However, the panel did opt to reduce the sporting punishment from 12 points to six, which sees the club move up from 24th to 23rd in the Championship table.
Wednesday said in a statement: “The club confirms that today its appeal was upheld in part. The decision of the League Arbitration Panel is that the sanction is reduced to a deduction of six points in season 2020/21. The club is digesting the content of the decision and will not provide further comment until it is published.”
Wednesday sold the stadium for about £60m to owner Dejphon Chansiri at a profit of more than £38m. However, Land Registry records show the ground is still registered to the Championship club.
The sale helped them record a pre-tax profit of £2.5m for 2017-18.
Without the sale of the ground, Wednesday would have posted a pre-tax loss of £35.4m, which would have meant they would have violated EFL rules which decree Championship clubs cannot lose as much as £39m over three years. The club recorded combined pre-tax losses of more than £30.5m in the previous two years.
In September 2019, the EFL was reported to have asked Wednesday why a £38m (€42.2m/$49.5m) profit for the deal was declared in its 2018 accounts when Land Registry documents dated the acquisition to almost a year later.
The Hillsborough agreement was first reported in July 2019 when the club’s latest accounts detailed the £38m profit, without specifying the identity of the buyer. At the time, Wednesday reported a pre-tax profit of £2.58m for the period spanning June 1, 2017 to July 31, 2018, a stark contrast to losses of £20.8m and £9.8m, respectively, in the previous two sets of accounts.
Image: Sheffield Wednesday