Sheffield Wednesday avoids 15-point deduction

Sheffield Wednesday's supporters had accepted their fate some time ago. Not just relegation from the Championship, but also starting next season in League One on -15 points. That deduction seemed set in stone because Arise Capital Partners, who completed a takeover of the beleaguered South Yorkshire club, were not going to meet obligations to pay unsecured creditors. The EFL's insolvency policy required those debts to be settled to 25p in the pound, but the offer from Arise had fallen well below that level. So, on top of the 18 points deducted this season for entering administration and other financial breaches, the Owls looked likely to start next season adrift at the foot of the third tier.

Even so, a sell-out crowd flocked to Hillsborough for Saturday's 2-1 win over West Brom. The fans were there to herald the new ownership, a consortium led by David Storch, his son Michael, and Tim Costin. After the group had been introduced, the big screen changed to show "-15" points, then ticked on to -14. As the countdown continued, the Wednesday fans cheered louder and louder. And then it reached zero. Out of nowhere, the Owls had two huge reasons to celebrate - new owners and no points deduction.

On 15 April, David Storch had put out a statement which left fans fearing the worst. The American businessman said the 15-point penalty was "set to be imposed" and a request for arbitration had been "refused" by the EFL. The details of what happened next may never be fully revealed, but Storch turned to Nick De Marco, a leading sports lawyer. De Marco had helped the Owls reduce a points deduction related to financial fair play from 12 points to six in 2020.

Chansiri had made a claim for £64m in loans, meaning Arise would need to pay £16m to satisfy the 25p rule. The EFL took into account Chansiri's reluctance to engage with offers made during the administration process. Only last week, Chansiri received an offer that would see him get payments based on the club's future success - but he accepted the offer too late, minutes after the deadline.

Having agreed to cancel Wednesday's 15-point deduction, the EFL board made a few stipulations, including that football creditors and HMRC had to be paid in full, while local businesses had to receive their 25p immediately. The EFL's flexibility was crucial, as it allowed other stakeholders to be treated appropriately.

Arise had to commit to invest immediately in the stadium. In his speech on the pitch, Storch promised improvements that fans had long awaited. An outstanding charge of about £7m owed on a loan against Hillsborough was cleared. As part of a two-year business plan agreed with the EFL, some spending restrictions were lifted, allowing the club to invest in its infrastructure. The settlement was seen as well-negotiated by the Storch group, providing a path for Sheffield Wednesday to return to stability.