How the EFL Owners’ and Directors’ Test could make or break Sheffield Wednesday takeover | OneFootball

Everything Owls fans need to know about the EFL process

Sheffield Wednesday’s takeover has moved far more slowly than supporters expected.

At the centre of the delay is the EFL’s Owners’ and Directors’ Test, the regulatory process that governs who is permitted to own or control a professional football club.

Often described loosely as a “fit and proper person” test, its purpose is narrower, more legalistic - and more time-consuming - than that phrase suggests.

Understanding how the test works helps explain why Sheffield Wednesday’s takeover has yet to move from expectation to completion, and why decisions at Hillsborough continue to be made as though no sale is imminent.

What happens when a football club takeover is proposed: EFL Owners and Directors test explained

Any takeover - formally termed an “acquisition of control” - must first be notified to the EFL by the club itself. Only once that notification is accepted does the regulatory process begin.

Owls supporters received that confirmation from the administrators on 9th January.

Approval is then required across three stages, all of which must be satisfied before control can change hands.

The first is the Owners’ and Directors’ Test itself. This is an eligibility test, not a judgement on ambition or competence.

Prospective owners, directors and anyone deemed to exert “control” over the club must submit declarations confirming they are not subject to any disqualifying events under EFL regulations, which range from bankruptcy and fraud convictions to bans by sporting bodies, repeated insolvencies, violent offences and links to sanctioned entities.

These are independently verified through background checks and third-party information.

The second stage concerns Future Financial Information. Here, the club and incoming ownership submit financial forecasts - including profit and loss accounts and cashflow projections - covering the remainder of the current season and the next.

These figures are stress-tested by the EFL to assess how much funding is realistically required if revenues fall short or costs overrun.

Finally, prospective owners must demonstrate the source and sufficiency of funding. In practice, this means proving that the money exists and that its origins can be verified, alongside binding commitments to fund the club in line with the submitted plan.

Only when all three stages are complete will the EFL approve a change of control.

Until then, the preferred bidder remains legally separate from Wednesday, unable to communicate with staff, negotiate contracts or make public statements - a separation that helps explain the prolonged public silence despite intense speculation.

Who the EFL will test at Sheffield Wednesday - and why it might take more time

The test applies not only to named directors or majority shareholders, but to anyone exercising control.

A 25 per cent shareholding qualifies automatically, but control can also be inferred from the ability to appoint board members, influence decision-making or act with others to exert authority.

This broad definition is designed to prevent ownership structures being used to obscure real power. In practice, it can significantly lengthen due diligence where consortium bids, layered investment vehicles or overseas interests are involved.

In Sheffield Wednesday’s case, the preferred bidder is a consortium led by James Bord, whose group reportedly includes links to gambling and cryptocurrency-related businesses.

Neither sector is prohibited under EFL regulations, but both typically attract enhanced scrutiny due to the need for detailed source-of-funds verification.

Where multiple investors or high-risk financial sectors are involved, the league must establish not only who holds formal shareholdings, but who ultimately exercises control - a process that can materially extend timelines without implying any adverse findings.

For the Owls, this explains why January’s transfer window has unfolded independently of takeover expectations.

Recruitment, sales and wage decisions must be made under existing constraints, even if a change appears close.

Once a takeover is approved, the EFL continues to monitor the club, with particular scrutiny of owner-funded cash injections and player expenditure. Promised funding must arrive when stated.

Looking ahead, the forthcoming Independent Football Regulator is expected to assume or duplicate many of these approval powers, introducing clearer definitions of control and statutory decision deadlines.

While not yet operational, its arrival signals a shift towards more transparent oversight.

For now, however, Sheffield Wednesday remains subject to the EFL’s framework. The absence of news does not imply failure - only that regulatory certainty arrives on its own timetable, not the club’s or its supporters’.