The EFL's Ownership and Director's Test has come under criticism in the last few years for allowing seemingly unfit persons to come into the running of its clubs' boardrooms. Is the system flawed or are some clubs situations being swept under the carpet to begin with?

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The EFL, a fairly well-run and well-organised organisation that chairs the running of the other 72 clubs in the English football league tier system. At least, that’s what you’d think, given that they are in charge of making sure each club under their guidance is following their guidelines in terms of physical and economical conduct.

 

However, looking at some of their previous misdemeanours while watching over and making sure every club has its due care, it can be questioned whether the guidelines have been put into place properly.

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The main issue in their rules and regulations has been highlighted over a number of years. The EFL’s Owners’ and Directors’ test is, in theory, meant to protect clubs from having owners that could potentially leave the clubs in ruins. Although, as previously hinted, in the last few years, there have been holes exposed by this system that have endangered, and even ended, several clubs right under their watch.

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To start with though, what actually is this test? Well, to summarise, the Owners’ and Directors’ test is a mandatory test which entails the board of governors doing background checks into any potential new owners of a football club in the Championship, League One or League Two.

 

Generally, it is difficult to actually fail the test - though there are various reasons why a candidate may fail the test. A few of these reasons are the candidate may have a court conviction surrounding fraud or dishonesty, they may have been in charge of at least one club prior that has had an insolvency issue, being involved in the running another club or if they have given false or inaccurate information to the board surrounding the takeover.

 

A number of reasons that could be looked into in fine detail, but as mentioned, more often than not the takeovers are approved and it should be a happy medium between club, owner, fans and league. 

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As predicted though, it doesn’t always work out this way. 

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The fact that there isn’t just one example that could be used here, but instead five or six or seven, just shows how well the system works. Bolton, Charlton, Macclesfield (now dissolved) and Leyton Orient, all some examples of how owners that shouldn’t have even passed the test can run clubs into the ground.

 

However, the main examples I want to look at in more detail are very recent ones, describing the turmoil of Bury and Wigan.

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Starting with the barely alive Bury FC, a historic club based in Greater Manchester who won 2 FA Cups in the early 20th century, who, in my opinion, have showcased the worst example of the EFL’s misconduct involving this regulation. Bury had been in financial trouble as far back as 2012, due to lowering gate receipts. However, all was seemingly solved when the property investor Stewart Day took charge, with a deal approved by the EFL and Day putting £1.5M into the club in his first year as chairman to pay off the outstanding debts.

 

The club appeared to be staying afloat, at least until December 2018, when Day sold the club to local businessman Steve Dale for just £1. The price is certainly questionable, since a club with debts that had appeared to go away (spoiler alert: they hadn’t) would surely not be worth only a single pound, and the owner would definitely not be willing to let the club go for that amount unless there was a lot more happening behind the scenes.

 

The slightly more concerning factor in this is the history of Steve Dale, the businessman who had owned 51 businesses, and 43 of which had been liquidated; surely something the EFL would take into consideration when using their system? No, instead of using it at all, they didn’t even run the checks how they would’ve done normally due to the dire situation the club found itself in. So the club was Dale’s, for only £1, in the hands of a guy who has only ever had 8 business ventures not find themselves liquidated, what could possibly go wrong?

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It took only 8 months until it was announced at 23:00 BST on 27 August 2019 that Bury were to be expelled from the EFL, since their lack of finances meant they were unable to fulfil any of their league or cup fixtures. They also became the first club since Maidstone United in 1992 to face expulsion from the EFL, unlike Maidstone, who gambled their future on a stadium that didn’t pay off, Bury could have actually been saved had the EFL followed its supposed rules as it was meant to, for the takeovers of both Stewart Day and Steve Dale.

 

There are so many questions that are still yet to be answered, even after a year since the demise of the club, for example why did the EFL not look into the company history of Steve Dale, a man who has only seen 8 of his companies stay afloat under his watch? Why did the EFL not allow the late bid from a Brazilian backed consortium to count, especially since they were willing to allow the sale to Dale without any checks and for the low price? To me, it’s almost as if they wanted the situation to reach the point it did, and of course, a directory responsible for the running of 72 clubs would surely not want that to happen to even a single club?

 

It’s a very strange situation - the lack of coverage until the very end, the rejection of a bid that would’ve been accepted in prior circumstances, it doesn’t really add up. Of course, there are long term failures of the club that surmounted to the untimely end of Bury FC, but the ultimate nail in the coffin was surely dealt by the EFL’s failings in making sure the owners could actually save the club, rather than driving it into the ground once and for all. Despite the unfortunate demise, the fate of Bury FC would have helped the League evaluate the system and prevent the issues from potentially arising elsewhere.

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But once again, it doesn’t work out like this.

 

Flash forward to the pandemic, with a number of clubs potentially in danger of going under due to the lack of matchday revenue that they generally centre their business model around since fans have been prevented from entering the stadiums. The first team to go into administration was Wigan Athletic, a team seemingly transformed for their relegation trouble at the start of 2020 - recording 11 wins since the New Year, including beating the top two Leeds and West Brom, as well as an 8-0 hammering of Hull City in the final weeks of the season. Despite administration, that form would be certain to see them survive. That is, until you look at another EFL rule.

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The rule for a team going into administration is that they receive an automatic 12 point deduction for doing so. This meant that all of their hard work crawling out of the relegation zone would be undone should they not gain enough points to keep their status, and come the end of the season, a draw at home to promotion chasing Fulham sealed the Latics' fate.

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Fairly straightforward you would think, considering this is a written rule into the EFL’s regulations, but when you start to look at the circumstances surrounding this, it becomes a situation that could even be classed as scandalous. A Twitter thread, originally pieced together by a Wigan fan uncovered some strange goings on behind the scenes of the football club, which had been taken over by Au Yeung Wai Kay only a week before the administration saga started. 

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How is it possible for all of the finances to suddenly disappear like that? It is almost physically impossible for this to happen, especially when you consider Wigan has never been a club that had been deemed in a spot of financial bother, and only ever spent money that had either come in, or at least been expected to come in.

 

Of course, the pandemic and the lack of funding is a good reason for the money suddenly dropping, but again, the circumstances suddenly change when a video of EFL chairman Rick Parry emerged, talking about the issues suddenly revolving around the club.

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The undercover video included Parry stating that there was an alleged bet in the Philippines that Wigan would be relegated. This makes more sense when we find out that the previous owner to Way Kai, Hong Kong based Stanley Choi, owned a string of casinos. Could this potentially have been a panic, given the form Wigan had been in at the start of 2020?

 

If the theory was true, and someone based in Choi’s casinos had placed a large bet that was starting to unravel, the sure fire way to prevent the bet from folding would be to get the biggest points deduction possible. Whilst this has all been pure speculation, everything adds up; and whilst Wigan appealed the decision to give them a points deduction that subsequently led to their relegation, the EFL overruled it, and sent them to League One football for the current season - where they are currently bottom, without any of their matchday eleven from their final championship match, and running on borrowed time in the hands of administrators.

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And while there might be a light at the end of the tunnel, with a rumoured takeover from a Spanish consortium recommended by the club’s most successful manager Roberto Martinez, there are still queries as to how this could have been allowed to happen.

 

The head of the EFL himself said that there were mysterious circumstances surrounding the takeover and administration (and even confirmed the video to be of him), yet still allowed Wigan to be relegated - while Sheffield Wednesday had a 12 point deduction for a breach of Profit and Sustainability suspended until the 2020-21 season, which would have also seen them relegated had it been applied immediately like Wigan’s.

 

It almost appears as if its a lottery as to who gets treated correctly and who doesn’t, and in the cases of Wigan Athletic and Bury, they seem to have drawn the short straw.

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