Sheffield Wednesday have been docked 12 points for a financial irregularity committed when the owner, Dejphon Chansiri, bought the Hillsborough stadium from the club for £60m in June 2019 and the profit was backdated to the previous season’s accounts.
Crucially, the points deduction will take effect next season, 2020-21, not in the season just concluded, when such a penalty would have relegated Wednesday. They finished 16th in the Championship, eight points clear of 22nd-place Charlton, who released a statement on Friday night saying they are considering a legal challenge to Wednesday’s sanction not taking effect immediately.
The EFL charged Wednesday in November over Chansiri’s purchase of the stadium, a practice employed by several Championship club owners that turned heavy financial losses into a profit.
Chansiri’s £60m acquisition of Hillsborough in June 2019 was valued as a £38m profit to the club, recorded in the accounts for the previous year, 2017-18. The Championship’s “profitability and sustainability” regulations limit losses to £39m over a rolling three-year period. The profit from Chansiri buying the ground turned a £35.4m loss in 2017-18 into a £2.6m profit.
The club was not found guilty of a charge alleging dishonesty in its dealings over the stadium, which would have incurred a heavier penalty.
“An independent disciplinary commission, appointed under EFL regulations, has ruled that Sheffield Wednesday will receive a 12 point deduction for breaching the League’s profitability and sustainability rules for the three season reporting period ending with season 2017/18,” the EFL said in a statement.
“The club was charged in November 2019 and referred to an independent disciplinary commission, which conducted a full hearing at the end of June 2020, before finding the club guilty based on the fact that the club should not have included profits from the sale of Hillsborough Stadium in financial statements for the period ending July 2018.
“The club was found not guilty of a further charge of breaching its duty of utmost good faith to the EFL by deliberately concealing information from the League in respect of filings made in respect of the profitability and sustainability rules.”
Wednesday issued a statement effectively disputing the outcome and suggesting they may appeal. “The club is extremely disappointed the commission has imposed a 12-point deduction to be applied next season and awaits the written reasons for this decision,” it read. “The club welcomes the decision that the commission cleared Sheffield Wednesday of the charge of acting in bad faith in its dealings with the EFL.
“Further, the commission decided not to apply a 12-point deduction this season, thereby imposing relegation. The club will await the written reasons for the sanction and upon receipt will digest and consider the full detail with its legal advisers before making any further comment.”
Charlton’s statement read: “Sheffield Wednesday were charged in November 2019 for breaching rules for the three-season reporting period ending with season 2017-18. We fail to understand why the deduction will take place next season rather than the current season, which seems to be irrational, and are writing to the EFL to get an explanation of the justification. The club will keep fans updated on any further action.”