Sheffield Wednesday's expected 'black hole' dodged by loan from wealthy fan
Sheffield Wednesday have received a £1m interest-free loan from an anonymous supporter to get them through to the end of the transfer window.
It should avoid the “black hole” the administrators had feared and could stave off the threat of having to sell one or more of the club’s star players in January.
Going into administration in October has brought a huge improvement in the Championship club's cashflow situation, with fans returning to the ground and making a concerted effort to spend at the club shop to help the joint administrators find a new buyer.
As a result, October's wages were paid on time – something that had not been the case for five of the previous seven paydays – and the staff have had assurances it will be the case next month, whist December's wages will be paid early ahead of Christmas as a gesture of goodwill.
That enthusiasm appears to have been matched amongst would-be buyers of the club, with 11 providing proof of £50m funds at the last count, and some taking tours of the facilities.
But even so, there was a danger the club might have to borrow money or sell a player to cover its costs before a takeover is completed.
The soft deadline for bids to be lodged is Friday, and buyers will have to go through the Football League's "director's and owners" test to satisfy them they are "fit and proper" people to run the club, as well as doing their own due diligence. After the League's experience with Dejphon Chansiri, who passed the test when he bought the club from the late Milan Mandaric 10 years ago, they will want to make sure they are thorough.
Speaking to The Wednesday Week podcast earlier this month, joint administrator Kris Wigfield explained: "We are hopeful we've got enough money to get through November.
"Between now and December – and this is a bit of a finger in the air – we're projecting that even if we got fans on board there might be a million quid black hole to get through to the end of December.
"We have got a plan B – there's a large payment that comes in from the EFL in January of about two-and-a-half-million (pounds) and we know if we need to we can effectively borrow funds against that.
"We're hoping we want need to because we're hoping the new owner can get the benefit of that.
"If we get to the stage where we've got a preferred bidder, what often happens in that situation as well is the preferred bidder puts some money up to enable us to trade until the deal completes."
That plan B now looks unnecessary.
Due to be paid back either on January 31 – transfer deadline day – or when the club is sold, whichever is later, the loan appears to be mindful of the danger of the Owls having to sell one or more of their best players in January, and is not believed to be tied to any of the interested parties.
Goalkeeper Pierce Charles has not played since mid-August because of shoulder surgery but is now back in training and the Northern Ireland international is sure to be the subject of interest in the new year.
Wigfield is an Owls fans and he and fellow administrators Paul Stanley and Julian Pitts have shown an appreciation of the bigger picture in persuading the Football League to allow the club to sign two free agents this month despite being under four transfer embargoes, but they also have a responsibility to protect creditors.
"I cannot promise we won't sell anybody but I'm hoping when it comes to January we won't be making those decisions because I'm hoping it will be the new owner," said Wigfield, explaining that if a preferred bidder had emerged but not completed a deal, they could be consulted.
It has been stressed the loan has not and will not go towards fees towards fees for the administrators or legal fees.
Whilst it is undeniably good news for the club, the £1m will have to be factored into the sums by those hoping to make a bid this week.
It has been reported that if the club were to be liquidated without assets, the anonymous lender would be liable to lose the £1m but the signs are positive that a suitable buyer can be found.
The club are hoping to make the two free agent signings they have been permitted as soon as possible. They are seeking cover in defence, with former Leeds United and Hull City centre-back Liam Cooper acknowledged as a target by manager Henrik Pedersen, and in midfield. Former Manchester United and Bayer Leverkusen player Timothy Fosu-Mensah is understood to be a target, and can cover both departments.
Wednesday's thin squad has been beset by injuries this season after only being able to replace a slew of departures with loanees Harry Amass and Ethan Horvath. They are also expecting Tunisia's Yan Valery and Zimbabwe's Sean Fusire to the African Cup of Nations, which begins in the lead-up to Christmas.
With 11 matches before FA Cup third round weekend and a squad with plenty of players who played little or no senior football before this season, the Owls successfully argued that being allowed to add to their squad was a player welfare issue.