Wigan Athletic could be test case in football stadium rates row

Wigan Athletic FC could appeal a tribunal decision on the rateable value of its football stadium, in a test case which could end up in the Court of Appeal.

An initial verdict was handed down by the Valuation Office Agency (VOA) which gives the Government valuations and property advice.

The former Premier League football club, which was relegated in 2013, then dropped to League One two years later before returning to the Championship last season, argued its demotion was a “material change of circumstances” which should mean lower rates bills.

Business rates for football clubs are linked to the estimated cost of building a replacement stadium, as well as an adjustment that recognises the club’s ability to pay, based on its income.

Wigan Athletic argued that the financial impact of relegation from the Premier League should be taken into account immediately, and not put off until the next revaluation.

The Valuation Tribunal dismissed Wigan’s appeal to allow its new financial circumstances to be reflected in the business rates the club pays.

The tribunal argued relegation did not constitute a “material” change to its circumstances since the stadium did not change physically.

“The revenue the football club received from broadcasting rights, when it was in the Premier League, represented more than 80% of its income. This percentage fell to 23% when it was in the Championship and further reduced to around 13% in League One,” argued the tribunal president.

“Whilst I accept that the relegation from the Premier League would have a significant detrimental impact upon a football club’s revenue stream, I am of the opinion that this loss of revenue is an economic factor and cannot be considered until the next revaluation.”

John Webber head of business rates at Colliers International disagreed: “It is highly likely that this case will be appealed to the Upper Tribunal and perhaps even the Court of Appeal,” he said.

“We disagree relegation is not a material change. Since dropping leagues, the club has seen much smaller crowds, the stadium is not using as many seats, which have affectively become advertising hoardings and some of its TV viewing boxes are now also redundant.

“We think the VOA should move into the modern world in the way it approaches such valuations and look generally at its methodology. Leaving matters until the next revaluation is too late for many clubs to cope with.”

Following relegation Wigan was paying more than six times the average business rates of its rivals in League One – £590,000 compared with an average of £88,000.

Mr Webber said: “This is a sad day for Football Stadia, but I don’t think they will give up.

“Even the President of the Tribunal agreed that ‘someone needs to look again at the valuation approach to stadiums which are occupied by football clubs’.

“I hope the VOA takes heed and does not continue to pursue a totally inflexible and increasingly out of date valuation method but embraces the needs of the modern football world.”

In May this year it was reported that a Hong Kong investment specialist was in talks to buy Wigan Athletic FC.

International Entertainment Corporation is a Hong Kong-based investment holding company listed on the Hong Kong Stock Exchange.

The group is principally engaged in hotel management and the leasing of properties for casino and ancillary leisure and entertainment purposes.