15million in debt racked up in three years and apparently its all my fault..

Bizarrely there has been a lot of talk about a catering deal recently, this talk has clearly been an attempt to distract from the very real issues of a set of accounts that suggest we are one or two seasons away from administration even if we stay in this division, and we face administration if we get relegated. Based on the terms of the loans taken out secured against our stadium this puts us in a situation where we will end up facing the same challenge as Portsmouth and Coventry in the event of facing administration. Milan Mandaric, Paul Aldrich and their backers committed to us to finance the club through equity investment and not debt. The implications of debt based investment are that our club suffers any downside associated with their financial management instead of their collective bank balance. The original transaction resulted in a debt for equity swap and honoured that commitment, since then this seems to all have been reversed. Looking at the last couple of years accounts, the high administrative costs suggest that the cash used to acquire the club is being serviced by charges. It is not uncommon to buy a business using third party funds and to cover the cost of servicing that finance by applying administrative charges in lieu of interest payments (which would be shown as a separate cost line in our accounts), this is exactly what happened with the Co-op bank charging us finance fees in addition to accrued interest charges. The results also point to the possibility that future revenues had been mortgaged to cover cash requirements post acquisition. It is very difficult for the average Wednesdayite to identify these points due to the lack of detail shared in the accounts recently, and also in the absence of the detailed management reports that were shared during my time at our club. In order to shed some light on things Im going to publish the latest management accounts drafted during my time at the club. Also in order to deal with the misinformation around the catering deal, all of the product changes including the likes of Beres pies were introduced through the Lindleys partnership. The termination of the outsource was about the fact the club was paying for casual staff on all concourses in any event and the outsource consisted of Lindleys providing a couple of employees (originally employed by the club) and managing product purchases in return for keeping a large share of the profits. Also we had zero control of quality or the product or service and this (everyone does remember how bad the food was right???) was having compound negative effect on fans relationship with the club due to the poor quality of product. Below you will see an internal email between the guys managing this area of the club at the time, confirming the terms agreed with Lindleys in respect of the terminating the outsource of catering facilities.

---------- Forwarded message ---------From: Mark Stuckey <mark.stuckey@mgames.com> Date: Wed, Jul 8, 2009 at 8:10 PM Subject: Lindley To: davids@sheffieldwednesday.co.uk

David FYI, we have done it In principle Lindley have agreed to 120K now 75K year 2 55K year 3 We keep all Lindley installed equipment except some admin kit (40K replacement value to us) We TUPE over the employees We agree a joint positive PR statement We sign up to if we default on any payment then the contract reverts We sign up that if we contract out catering within the next three years Lindley have first refusal with the same T+C's as before We pay for the stock that exists. I think a much better situation than we would have accepted opposite a 250K +40K equipment replacement. I will work on the legals in the morning but I think we have enough now to crack on. We can discuss first thing Thursday about the action plan. Cheers, thanks for making this work so well. All the best, Mark

Please note that if we have re-outsourced as per the original terms then the club will once again be paying for the casual staff and this significant cost will need to offset the 400k per annum payment by Lindleys to the club. The original outsource just related to concourse catering, both match day corporate hospitality and non-match day hospitality activities were all managed by the club. Now all three are outsourced and we are missing a significant amount of revenue and also have lost profits associated with these revenues, a situation which gets worse as attendances grow until the eight year contract is completed. In simple terms its nonsense to suggest that the club could not absorb a circa 80k payment and then a circa 60k payment even in league one as that would have represented less than Lindley's share of profits under the original outsource arrangement. I have to say I am deeply disappointed by the lack of oversight and accountability carried out by Wednesdayite in respect of the misinformation about how finances were managed and key decisions were taken during my tenure given that full details of all dealings other than player transfer matters were shared with Wednesdayite, and given that Wednesdayite were actually heavily involved in all non- footballing developments.

More worrying there has not been a published review of our accounts this past few years, something which Wednesdayite saw rightly as a key responsibility in terms of providing an independent voice in respect of the state of the clubs finances, something which brought comfort to the majority of Wednesdayites. Clearly there was no appetite to tackle the fact that over 1m in revenues were moved out of the 2010 accounts. Instead the leadership of Wednesdayite this past few years seem to have adopted an attitude of we will be alright so long as others are worse off than us in terms of accumulated debts, this ignores the clear signs that the owners of our club are not in a position to support the club, this is not the situation that many other clubs face. On the back of this mind-set there has been a complete lack of taking responsibility for being the only body to provide oversight on behalf of their members and also from a moral perspective on behalf of all Wednesdayites. They have also apparently been happy to be a voice for the owners in respect of a number of answers to important question that have subsequently turned out to be untrue. An example of which being Wednesdayite telling fans that the original loan was only taken out because Milan Mandaric could not get money into the UK quickly enough. Below you will see the last set of management accounts (as at mid-March 2010) which I had access to prior to my departure, it is worth noting that there was circa 400k upside on these numbers due to the last couple of home games outperforming the financial forecast (even though the last game proved costly overall) .

SWFC - BOARD COPY Cash flow by month Year ended 31 May 2010 in 000s

JUN
ACTUAL

JUL
ACTUAL

AUG
ACTUAL

SEP
ACTUAL

OCT
ACTUAL

NOV
ACTUAL

DEC
ACTUAL

JAN
ACTUAL

FEB
ACTUAL

MAR
FORECAST

APR
FORECAST

MAY
FORECAST

TOTAL
FORECAST

Revenues Football Matchday Commercial Non-Matchday Commercial Catering Activities Retail Activities Internet & Other Total revenue Costs Football Matchday Commercial Non-Matchday Commercial Catering Activities Retail Activities Internet & Other Central Costs Ground Administration Total costs Exceptional costs - capital Exceptional costs - other Revenue adjustments Season ticket income Receipts Season tickets 09/10 Season tickets 10/11 Octopus Funding Season ticket phasing TV FL TV Sky loan Radio & televised games FL payment Matchday Commercial Advertising Exec boxes Other packages Estimated cash collection Advertising Exec boxes Other packages

248 4 37 43 52 14 398

301 5 58 73 224 8 669

1,050 223 10 159 190 23 1,654

957 168 30 185 115 13 1,468

731 116 39 130 89 16 1,121

784 142 24 126 146 44 1,266

950 177 71 246 184 14 1,642

702 137 24 150 68 24 1,106

798 168 38 171 62 15 1,251

838 225 30 202 52 19 1,364

1,035 165 34 164 59 19 1,476

818 176 37 109 119 12 1,271

9,211 1,704 433 1,757 1,359 220 14,684

(508) (15) (33) (59) (75) (10) (119) (105) (924) -

(674) (44) (54) (89) (146) (9) (121) (120) (1,258) (17) -

(752) (64) (19) (161) (116) (15) (94) (98) (1,319) (10) -

(884) (71) (36) (168) (85) (8) (116) (133) (1,501) (12) -

(753) (53) (44) (120) (86) (7) (115) (113) (1,290) (129) (241)

(730) (60) (28) (137) (98) (13) (110) (103) (1,279) (6) -

(815) (85) (76) (216) (120) (9) (107) (103) (1,531) (6) (253)

(668) (73) (27) (123) (110) (7) (116) (98) (1,222) (5) (18)

(777) (81) (29) (165) (57) (7) (92) (94) (1,303) (0) (64)

(774) (92) (31) (181) (64) (14) (95) (105) (1,356) (13) -

(753) (70) (37) (153) (68) (14) (108) (102) (1,306) (13) -

(669) (46) (41) (114) (118) (8) (138) (103) (1,237) (13) -

(8,756) (754) (455) (1,688) (1,142) (121) (1,330) (1,277) (15,524) (222) (576)

(248) 830 582 19

(268) 80 (188) (0) 57

(262) (262) (271) (91)

(262) (262) (271) (91)

(262) (262) (271) (91) 950 (84)

(263) 56 (207) (258) (91)

(267) 225 1,500 1,457 (258) (78)

(267) 196 (196) (267) (258) (78) 201

(268) 279 (279) (268) (258) (78) 256 10

(272) 1,026 (1,026) (272) (258) (75) 475 (42)

(272) 123 (149) (358) (75) 475 (42) 100

(272) 557 285 (258) (75)

10 417

10

100 417

(3,183) 910 2,461 (0) 187 (2,719) (825) 2,433 (168) 230 834

0 0 0

(1) 0 -10% 34 54 19 (26)

(30) (79) (23) -30% 102 161 57 (9)

(30) (65) (17) -5% 17 27 9 (683)

(33) (34) (9) -5% 17 27 9 219

50

(34) (45) (14) -5% 17 27 9 (587)

200

(31) (64) (21) -20% 68 107 38 1,318

(39) (43) (21) -20% 68 107 38 125 50 9 183

(35) (70) (15) -5% 17 27 9 (404)

(36) (67) (38) 0 0 0 (313)

(36) (45) (23) 0 0 0 (153)

(36) (22) (10) 0 0 0 (117)

(339) (537) (190) 339 537 190 (28) 300 46 318

Phasing of football and MDC income 601 Player sales Player sales VAT Total adjustments to revenue Cost adjustments Football Player incentives charged Player incentives paid Retail Activities Cost of sales Purchases -PUMA Purchases - Other Other working capital movement Phasing of expenditure/creditors Exceptional items - cash World Cup Bid 2018 Capital and other Player purchases/agents fees VAT for month VAT paid Bank interest & charges Total adjustments to costs

601

(26)

(9)

(683)

8 276

30 (357)

1,318

(404)

(313)

(153)

(117)

(71)

28 (10)

143 (125)

70 (52)

48 (30)

65 (47)

75 (57)

67 (49)

53 (35)

53 (35)

53 (35)

655 (547)

56 (18) (5) 47 9 (168)

120 (106) (5) 892 902 -

92 (110) (5) (424) (430) -

62 (96) (5) 128 107 -

50 (100) (5) 394 357 168

74 (66) (5) 343 364

94 (127) (5) (1,050) (1,070) 243

81 (50) (5) 95 139 (243)

34 (18) (5) 53 82

40 (25) (5) 37 65

43 (39) (5) (173) (156)

60 (62) (5) (342) (331)

(25) 97 (325) (3) (414)

(25) (177) 14

(24) 109

(25) 43 (220) (4) (98)

(168) 18

(32) 47

(31) (20) 340 (146) (116) (801)

(5) 53

(5) 42

(5) 38 (244) (4) (150)

(5) (63) 76

(5) 136

(4) 709

(4) (349)

(3) 372

(4) 375

(4) (59)

(3) 116

(3) (150)

(4) (205)

807 (817) (60) 39 (355) (260) 1,013 (935) (156) (654)

I am sure that publishing this will result in some debate, and potentially some negative pushback from the small minority that have never been friends of mine, I hope that most Wednesdayites take comfort from this information. More so I hope that our current owners are 100% honest with us all, and that Wednesdayite fulfils its obligation to be guardians of our club alongside carrying out the great community work it primarily engages in. For my part Im going in for major surgery tomorrow (fixing a broken gastric band) and then have further surgeries ahead of me to sort my dodgy knees, this communication is not me seeking to get politically involved in our club again and is just a one off airing of facts and truth. I enjoyed yesterdays performance and look forward to catching a game before the end of the season. UTOs! Regards Lee