Sportsmail looks at five struggling clubs in danger of going bust

Reckless owners, extravagant spending, doomed takeovers… with the EFL in CRISIS, Sportsmail runs the rule over five struggling clubs who are in GRAVE danger of going bust

  • Some EFL clubs are at huge risk amid financial chaos triggered by the pandemic 
  • There are serious fears that not all 72 teams will survive the next campaign 
  • Poor decisions from owners and failed takeovers could put clubs in huge trouble
  • Sportsmail looks at five clubs who face uncertain futures in the coming months 

With five clubs reprimanded by the EFL for failing to pay players’ wages last season — even before football was dramatically halted by lockdown — the danger of bankruptcy is almost ever-present across the lower divisions, a problem that has been exacerbated by the coronavirus pandemic.

With 72 Football League clubs forecast to lose a total of up to £250million by the end of next season, there are fears not all of them will survive the campaign, although early predictions that dozens could go bust appear far-fetched given the bridging finance and cost-cutting measures that have been put in place.

The EFL are confident they will eventually secure funding to tide struggling clubs over if necessary, whether from the Premier League or via a commercial loan, but they cannot save reckless owners from themselves.

Extravagant spending and doomed takeovers are the common denominators as Sportsmail looks at some of the clubs in gravest danger.

A handful of clubs are in serious danger of going bust amid a financial crisis ongoing in the EFL

CHARLTON

The chaos and power vacuum at the top of Charlton was illustrated last weekend, when a group of supporters occupied the boardroom at The Valley, enjoying cheese and wine as part of a protest over what they regard as the club’s ‘insulting sham’ of an ownership.

Brighton and Wigan fans joined the demonstration, sparked by growing fears that the League One club could be the next EFL team to fall. Nearly nine months have passed since Roland Duchatelet, who faced regular protests and boycotts, sold the club to East Street Investments for £1. That was supposed to mark a new dawn but only more strife has followed.

Lee Bowyer’s side were relegated from the Championship and now the club are battling to ensure they can pay wages for September and October. All while the third supposed takeover of 2020 edges closer.

Charlton were relegated from the Championship last season and now face a fight for survival

Majority shareholder Tahnoon Nimer has overseen a turbulent period amid a takeover bid 

Charlton still owe millions to Duchatelet, who maintains ownership of The Valley and the training ground too. But their problems spiralled after ESI took control.

New majority shareholder Tahnoon Nimer had a messy dispute with executive chairman Matt Southall, with police called, legal threats issued and mud slung relentlessly on social media.

Then in June, businessman Paul Elliott bought ESI, but his consortium’s attempts to take control of Charlton were derailed last month, when three individuals failed the EFL’s owners and directors test.

Now Thomas Sandgaard — a US-based Dane who reportedly spoke to supporters during their occupation — is hopeful of taking the helm. He chose Charlton over Wigan, Swansea, QPR and Sunderland but now Elliott is seeking an injunction that would prevent any sale. 

Manager Lee Bowyer is trying to focus on running the team but is under a transfer embargo

Meanwhile, Bowyer is trying to run a football team. With the EFL still yet to approve ESI’s takeover due to a failure to provide a proof of funds, Charlton have been under a transfer embargo for months.

The club also want the EFL to appeal the decision to defer Sheffield Wednesday’s 12-point penalty until next season. Had it been applied to the last campaign, Charlton would have stayed up.

For now, expect more unrest. After a group of fans went to Cheshire last week to confront lawyer Chris Farnell, who was part of Elliott’s consortium, they are now calling on supporters everywhere to head to the EFL’s headquarters and take ‘direct action’.

WIGAN 

With the clock ticking towards the new season, the search for new owners continues, with administrators having set a deadline of Monday for a takeover to be completed.

But there is hope in the shape of Randy Frankel, the co-owner of Major League Baseball side Tampa Bay Rays, who alongside former Rays vice-president Michael Kalt, is ready to shake hands on a £4m deal over the coming days that would give the Latics a fighting chance in League One.

Wigan appear to be a prime example of what happens when a club is reliant upon the financial support of one person. They had budgeted to lose substantial sums and when the tap from their Hong Kong owners was turned off there could only be one result.

Wigan are desperate to be taken over by a new owner to rescue them from administration 

The subsequent administration has been painful, with the points deduction relegating a club that had performed well in the second tier. It has also had the knock-on effect of seeing many of their better players leave for fees which were far less than they could have normally expected.

Such is the state of modern-day football that many of the interested parties prefer the club to be in League One rather than the Championship, given the lower overheads involved.

Wigan should not have any trouble finding a new owner as the Tampa Bay interest shows. They are an attractive proposition, with a stadium, decent support and training ground. But there was hope that a deal would have been sorted long before now and the current situation cannot continue for much longer.

OLDHAM 

The Premier League founder members have endured a turbulent time under the ownership of Dubai-based Moroccan Abdallah Lemsagam, a former football agent.

Since Lemsagam took over officially in January 2018 there have been no fewer than seven managerial appointments.

Oldham have suffered from financial woes under the ownership of Abdallah Lemsagam

Since his initial involvement, in the summer of 2017, around 70 players have been signed. The club was relegated from League One in 2018 and finished a lowly 19th in last season’s League Two.

Off the field it has been just as bad. On a number of occasions players have not been paid on time. Two winding-up petitions were faced within the space of four months. 

In March, Oldham came close to going into administration before an agreement was reached to repay a debt to a former owner following the initiation of court proceedings.

First team stars claim they have not been paid for four months and are in dispute with the club

A number of players say they have not been paid their salaries, aside from furlough money, for four months.  They have instructed the Professional Footballers’ Association, whose lawyers are in talks with the club. Should no resolution be reached, the EFL will intervene and dock points if they find any rules have been broken.

Currently, the club are only permitted to open three of their four stands, with the newest off-limits amid a dispute with the landlords. A protest group has been formed by a section of the club’s supporters, and season-ticket sales are rumoured to be at their lowest for decades. New manager Harry Kewell has some job on his hands.

SOUTHEND 

In December, players were not paid on time. In March, the Shrimpers were placed under a transfer embargo thanks to an unpaid tax bill of £668,000.

They could have done with some players. Relegated to League Two in spectacular fashion, 16 points adrift of safety, last season was one to forget.

Manager Sol Campbell has left and the long-running saga of a move away from Roots Hall continues to drag on.

Southend have endured a chaotic couple of years and are subject to a winding up petition

The redevelopment of Roots Hall would be a huge help to Southend in their ongoing struggles

However, there are chinks of light. Owner Ron Martin has been here before and, to his credit, often puts his hand in his pocket to cover shortfall. There is hope that the new stadium at Fossetts Farm will get off the ground. Should that happen, the redevelopment of Roots Hall — which would see 504 residential units built — would be a huge help.

On the field, things would also appear to be picking up. New manager Mark Molseley seems to be switched on and fans have high hopes of what looks like being a youthful, talented squad. The winding-up petition, however, will not go away and — after being adjourned three times – is pencilled in for September 16.

READING 

The Championship club remain under investigation by the EFL related to potential breaches of spending rules following their sale of the Madejski Stadium to a company controlled by owner Dai Yongge, although it is unclear whether Reading will face charges.

The club’s financing and accounting practices remain a major issue however, and are understood to have played a role in the removal of chief executive Nigel Howe this week following an internal dispute, although he is staying on as vice-chairman.

Even if they escape a charge over selling the Madejski, other charges of breaching spending limits appear inevitable without significant player sales, which may be difficult to achieve given the collapse of the transfer market in the wake of the pandemic. 

Reading are under investigation by the EFL after the sale of the Madejski Stadium to a company run by new Royals owner Dai Yongge

The club recorded losses of more than £40m last year and have a spiralling wage bill 

Reading recorded a loss of £40.6m in the financial year ending 2018-19 despite having also sold their training ground, and are running out of assets to cash in as they risk exceeding the league’s £39m three-year loss limit.

At the heart of their problems is a spiralling wage bill which has been funded by Yongge since the Chinese businessman bought Reading in 2017. Their most recent accounts show that player wages are an extraordinary 225 per cent of turnover, a level of spending that is clearly unsustainable.

Given Yongge is experiencing difficulties taking money out of China to fund the club, something has to give sooner rather than later.




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