The English Football League is poised to revisit its rules on club insolvency after the recent acquisition of Sheffield Wednesday, a move that has ignited fury among several rival clubs. The outrage stems from the fact that the Owls managed to avoid the standard fifteen‑point sanction that the league normally imposes when a club breaches the agreed‑upon insolvency policy by exiting administration without meeting all the prescribed conditions. The backdrop to this controversy involves the club's former proprietor, Dejphon Chansiri, who had extended a total of £64 million in loans to the organization during his tenure. Of that amount, a quarter—approximately £16 million—remains outstanding and is still owed to him.
When the club was purchased by the new owner, David Storch, he declined to honour that debt, arguing that Chansiri had left the business in a severely precarious financial position. Had Storch chosen to settle the loan in full, his purchase price would have more than doubled, dramatically altering the economics of the deal.
Despite this impasse, Sky Sports News has obtained an exclusive scoop indicating that an alternative offer is on the table for Chansiri. The proposal, worth several million pounds, would be triggered only if Wednesday secures promotion back to the Championship on the first attempt. This arrangement mirrors the deal that Chansiri himself struck with his predecessor, Milan Mandaric, when the Thai businessman took over the club in 2015.
According to the source, the offer from Storch has a limited window of validity; Chansiri must accept the terms promptly before the opportunity expires later in the month. The existence of this credible offer proved pivotal in the EFL board's decision to forgo a points deduction. The board concluded that, because a realistic financial remedy was available, penalising the club would be unjust.
During the season‑closing festivities at Hillsborough, the club even staged a countdown on the big screen, decrementing the imagined fifteen‑point penalty point by point amid a chorus of cheers from the Owls supporters. In reality, however, the sanction had never been formally imposed, so there was no deduction to reverse.
The league's official guidelines stipulate that new owners must make a "reasonable attempt" to clear all outstanding liabilities, with football creditors and HM Revenue & Customs required to be paid in full, while other creditors are offered a standard settlement of 25p per pound owed. What ultimately swayed the league in Wednesday's favour was Storch's willingness to negotiate with Chansiri and the evidence that the former owner had been inflexible and uncooperative. Sky Sports News reports that, upon seeing Storch's offer, Chansiri contacted the appointed administrators and demanded that the club be put back on the market to fetch a higher price, a move that would have dramatically increased the risk of liquidation.
If Storch's deal had not materialised at the critical juncture—when revenue streams were about to collapse at the end of the season—the future of Sheffield Wednesday would have been seriously in doubt. The club might have been forced into liquidation, depriving its supporters of a historic institution and potentially reshaping the competitive landscape of the lower leagues.
Several other Championship sides have voiced their displeasure that Wednesday escaped a points deduction for the upcoming season in League One, though they have chosen to remain anonymous. This discontent is fueling calls for the EFL to open a fresh round of consultations with its member clubs before the next campaign begins, with a particular focus on the insolvency policy.
The current framework was adopted by the clubs themselves during the last debate in 2023, following Derby County's own exit from administration ten months earlier when David Clowes took over the financially battered club. In the Derby case, former owner Mel Morris, who had injected more than £200 million of his own money into the club over the years, agreed to write down a substantial portion of his claim as a creditor in order to facilitate a smoother transition.
This compromise allowed Derby to avoid a points penalty, setting a precedent that has now been invoked by clubs unhappy with the perceived inconsistency of the rule's application. Critics argue that the EFL's insolvency policy is the only area of its governance where the league's board retains discretionary power to impose—or waive—a points deduction.
For all other regulatory breaches, such as those involving the Profit and Sustainability Rules (PSR), the final decision rests with the independent Club Financial Reporting Unit (CFRU), which operates separately from the league's administrative bodies. The ongoing debate highlights a fundamental tension between the desire to enforce financial discipline across the professional game and the practical realities of rescuing clubs from the brink of collapse.
While the league seeks to maintain a level playing field, it must also consider the broader impact of punitive measures on clubs, their fans, and the communities they serve. As the new season looms, the EFL is expected to convene a series of meetings with its constituent clubs to address the shortcomings of the current insolvency policy.
Stakeholders will likely discuss potential reforms, such as clearer criteria for what constitutes a "reasonable attempt" to settle debts, standardized settlement percentages for non‑football creditors, and perhaps a more transparent, rule‑bound approach to points deductions that removes discretionary discretion. The outcome of these discussions could reshape the financial governance of English football for years to come, setting a benchmark for how leagues worldwide handle clubs in financial distress.
Until then, Sheffield Wednesday will enter League One without a points handicap, while other clubs watch closely, hoping that future policy adjustments will bring greater consistency and fairness to the game.