DerbyFan

4 hours ago, Mr Popodopolous said:

Mel Morris on talkSport just starting now. These are summaries of the substance, not direct quotes.

States:

• They started looking at transaction some 18 months back.
• A denial it is corrupt.
• Says that was on current market value, not projected after work and events.
• Reiterates events during the season could be a huge money-spinner.
• Makes reference to the roof and puts his business case.
• Jim White asks a straight question- without the stadium would you have been in breach of FFP?
• Mel Morris- no straight answer, talks forward planning, player transfers etc- Jim White states he uses a loophole.
• Mel Morris states nothing done wrong- is allowable.

Simon Jordan:

• Thinks that if it was any other club doing it, he would call it sabre rattling.
• Isn't so sure owing to Gibson's track record.
• Thinks Middlesbrough's actions aimed more at EFL than Derby perse.
• Considers FFP to be flawed.
• Thinks Morris is being cute, different to player transaction and believes it will stand up, the valuation that is as it was independent.
• Doesn't necessarily fit with the ideals of FFP.

 Mel Morris:

• Wouldn't support the rule change as it would be basically pulling the drawbridge up.
• Points out on level playing field argument that FFP never intended to create this.
• Biggest challenge especially at our level the inflation in fees and wages.
• Premier League the main driver.
• Also of equal importance, the parachute clubs.
• Excess funds of clubs that yo-yo, gives them an advantage- £30m, study shows this.
• Pushes non parachute clubs into a need to react- a financial arms race basically?

Jim White:

• Only clubs who don't support Middlesbrough clubs are those who want to do that too.

Mel Morris:

• Great complications- tax etc etc.
• HMRC- "benefit in kind", other issues, major tax bill if not.
• Would do it again, as it is within the rules. If you don't like the rules then change them!
• Talking about Bolton- had they been bankrupted and results expunged, biggest beneficiary would've been Derby.
• Mentions Shaun Harvey- "Texted him on the morning they played Bolton, and said much disagreement- but applauds him as you have to keep Bolton and all the other clubs alive".
• No guidance, pushback- took the valuation at face value.
• Praises Steve Gibson despite this dispute.

I've listened to it on the catch up feature now.

Re. the bit in bold, Jim wanted a straight answer but it couldn't be that simple, as I think Mel's point was that as it stands we haven't breached FFP, because we spent what we could within the limits including the stadium sale. So if someone just decides to do some sums and take the stadium sale off from the figures now then we will have but only because we spent up to what we could with it. That doesn't mean that without it we would have failed, it just means that as everything stands now the figures without the sale would show that we would have, because we spent including the sale in the planning, ie. if the sale hadn't happened, then we would have adjusted our spending accordingly and not failed it. You can't just take it off the figures as everything else would have changed without it, that's how I understood it from what he said.

The valuation was always going to be on what was there now, not what was planned. The only way planned things could make a difference to the valuation was surely if there was the permissions for it already granted, like with a house or plot of land, if the permissions are there then it tends to be worth more? The only thing for the future that might potentially have made a difference is that I think the stadium was built to make it easy to expand to 44,000, I've got a feeling that there's some ground works already done for it or something already in place to allow it, I can't remember exactly.

I'm not sure I agree with what Simon said about not being like selling a player from the way that Mel was saying it, from what I remember, Mel was only comparing be able to spend as like being able to spend after selling a player, ie. it's within the rules to sell a player and spend the proceeds, it's within the rules to sell a fixed asset and spend the proceeds, not sure he was trying to compare it in any other way.

I agree with Mel about the pulling the drawbridge up, it's up to the other clubs now whether they want to change the rules, but we wouldn't try and stop them doing something we have done as it would be hypocritical.

Don't really understand Jim's point about the only clubs that don't support Boro are the ones that want to do it too, well yeah, isn't that kind of the point? The ones that don't want to (maybe want to keep the asset within the club/don't want to spend that much money/etc) or can't (don't own their assets/can't spend that much money even if they wanted to/etc) do the same thing aren't likely to want other clubs doing it as it's puts them at a financial disadvantage! But that doesn't mean that we were wrong to do it when it's explicitly allowed within the rules.

Mel's makes an interesting comment about Bolton, from what I remember most people seemed quite confused by the seemingly lenient way the EFL dealt with Bolton compared to other clubs in similar situations, like with Bury this season, they've not been given a lot of time, they were just kicked out. If that means that the rules were potentially stretched at all to let Bolton stay in when they wouldn't normally have been then we would have had a case to be annoyed by it, as we would have benefitted from it more than some others, but Mel says on the day of our game with Bolton he told them he applauded them for doing everything they could. In the end it didn't make a difference to us as we got the place anyway, but he didn't know that we would get it at that point.

18 minutes ago, Mr Popodopolous said:

Mel Morris on talkSport just starting now.

States:

• They started looking at transaction some 18 months back.
• Denies it is corrupt.
• Says that was on current market value, not projected after work and events.
• Reiterates events during the season could be a huge money-spinner.
• Makes reference to the roof and puts his business case.
• Jim White asks a straight question- without the stadium would you have been in breach of FFP?
• Mel Morris- no straight answer, talks forward planning, player transfers etc- Jim White states he uses a loophole.
• Mel Morris states nothing done wrong- is allowable.

Simon Jordan:

• Thinks that if it was any other club doing it, he would call it sabre rattling.
• Isn't so sure owing to Gibson's track record.
• Thinks Middlesbrough's actions aimed more at EFL than Derby perse.
• Considers FFP to be flawed.
• Thinks Morris is being cute, different to player transaction and believes it will stand up, the valuation that is as it was independent.
• Doesn't necessarily fit with the ideals of FFP.

 Mel Morris:

• Wouldn't support the rule change as it would be pulling the drawbridge up.
• Points out on level playing field argument that FFP never intended to create this.
• Biggest challenge especially at our level the inflation in fees and wages.
• Premier League the main driver.
• Also of equal importance, the parachute clubs.
• Excess funds of clubs that yo-yo, gives them an advantage- £30m, study shows this.
• Pushes non parachute clubs into a need to react- a financial arms race basically?

Jim White:

• Only clubs who don't support Middlesbrough clubs want to do that too.

Mel Morris:

• Great complications- tax etc etc.
• HMRC- "benefit in kind", other issues, major tax bill if not.
• Would do it again, as it is within the rules. If you don't like the rules then change them!
• Talking about Bolton- had they been bankrupted and results expunged, biggest beneficiary would've been Derby.
• Mentions Shaun Harvey- "Texted him on the morning they played Bolton, and said much disagreement- but applauds him as you have to keep Bolton and all the other clubs alive".
• No guidance, pushback- took the valuation at face value.
• Praises Steve Gibson despite this dispute.

Thanks for making a note of what was said, I only caught the last 30 seconds!

I'd guess that Gibson's problem is the Riverside isn't valued at what Pride Park (PP - easier to type!) is and he's wondering how given that PP was basically a copy when built.

But, PP was opened only 2 years after, and (if the quoted figures are correct) it cost £12m more to build, £16m and £28m. So (if correct) that's either the difference in build costs in the 2 years between, or there are other differences, I notice that the link I posted to the costs of PP says: "Architects of Miller Partnership have implemented over 30 alterations" so it depends what those alterations were and how much they vary the costs, I'd hazard a guess that the location would also make a difference.

3 hours ago, Mr Popodopolous said:

Aaah, my fault- probably.

Could well be getting mortgage/remortgage/sale and leaseback mixed up- did a bit of historical research and saw something about ABC Corporation, and assumed it was out of club ownership for that period? Or was it that ABC took over the club and ground alike. Will look again at the accounts for the early to late 2000's.

https://www.independent.co.uk/sport/football/news-and-comment/david-conn-pride-park-mortgaged-to-panamanian-company-77225.html

Will look further back in the accounts, to the late 1990s in due course.

I'm a bit confused about the whole thing. I didn't really pay much attention to the ins and outs at the time as I was a little too young to know/care/understand about that kind of thing! Having read through I can't figure out if it was sold or mortgaged.

I was just going on the figures in the accounts, and since 1999 it doesn't appear to have ever left the assets. Can you do that if you've sold and only paid rent? I wouldn't have thought you could as it's not your asset?

If you want a bit of light reading (ha!) from around that time just have a Google of 'the three amigos'.

7 hours ago, Mr Popodopolous said:

The one curiosity regarding the Revaluation Reserve though.

This Revaluation Reserve at the time Pride Park was purchased back in 2007/08 time, with the subsequent revaluation was £39,554,000.

Yet on getting the ground back and revaluing it, there was an upward revaluation listed in the accounts for that season of £34,147,000- listed as a Revaluation Readjustment.

Revaluation on 11th December 2007 by King Sturge LLP to £55,000,000.

In terms of the Depreciation, there was the re-purchase of Pride Park- cost or valuation of £27,264,000 on 1st July 2007.

So then, was the revaluation reserve separate to, part of or in addition to that upward revaluation- ie how much of it, if any, was already accounted for in terms of the Revaluation Adjustment?

Or is it that regardless of that upward adjustment, you readd the RR in any case?

Double entry maybe?

Revaluation Surplus- similar but different to a Revaluation Reserve?

Just a quick reply to this, haven't had time to reply to your other posts yet, but was there a repurchase? Until the sale in 2018 I thought the club had ownership of it since it was built, is that not the case?

Edit: Just double checked the notes I made about the accounts (so I didn't have to keep going back into them) the only thing I can see is in the 1999 accounts where I've got it down as transfer from subsidiary company. I haven't looked at the Sevco ones though, are you looking at those or the club ones?

9 hours ago, Mr Popodopolous said:

Agreed. Sale of old land and old ground seems fair enough I guess, but then again given infrastructure investment doesn't count under FFP there could be a case for harmonization there.

We'll see what comes out in the wash I guess. Pretty unlikely to say the least though, as you say!

Yes, think that is part of it- trying to pre-empt the possibility of outside regulation too, after some bad years (largely under Shaun Harvey).

Agree that the rules should've been explicit, you need fully clear rules but at the same time, I think that to leave it unchecked won't go well- a lot of owners and hierarchy, albeit privately, are pretty resentful about it IMO. The Hillsborough sale and leaseback has a feeling of the final straw, given the context around that particular transaction! How the hell that was signed off as okay...

Oh they need to change the rules pdq. However I agree with the investigations- as I touched upon above, I cannot see this issue being left alone without it, all those clubs who have sold quite big, made sacrifices, restraint in the window. If the valuations broadly correct then fair enough, we change the rules and we move forward- but if not...for the sake of the integrity of the competition I believe this is very necessary.

Police Tweet and Lampard's (Derby's?) version of events didn't quite overlap entirely IIRC. Bielsa's press conference though pretty honest, was pretty ill-judged! I remember the discrepancies though.

See the odd Tweet, unsure if I follow him on Twitter- if I don't I will now! Definitely a good read.

Mel Morris- I'm conflicted on him! He does this FFP related stuff, notably the sale and leaseback, Rooney stuff and maybe the variance in amortisation model, yet clearly he is a local owner- read he went to watch Derby in the 1970s? He seems to have a good connection with your fans- seen him leading the bounce at Accrington on YouTube eg, in the stand itself! If it wasn't for the FFP stuff, he'd be up there in the mould of Coates, Gibson and Lansdown- in that category, yet he shares a number of characteristics, FFP notwithstanding! I have respect for him being a true fan but I don't like some of the FFP practices is how I'd sum it up.

True, I understand why they like to allow spending on infrastructure because it's better for fans experience if it keeps improving. The only problem is, by having the FFP rules in the way they are, so that owners can't put money in even if they want to, clubs end up pricing out fans with sky high ticket prices. I assume it is because of FFP as it seemed to be when that was implemented that prices started going crazy, as clubs now need their income to be as high as possible to compete at the top end and, for Championship and lower clubs, tickets are likely their highest source of income outside of player transfers (which you cannot always guarantee will happen).

I should have been clear, I have no issue with investigations, they're always needed so things remain in check, the problem for me is letting it get out in the press with no official comment on what you're actually doing. Either do it quietly and if theres a problem publicise it then when you can put some meat on the bones, or make regular statements about the situation and actually keep people informed (and their comments in check) by stating what was ok and stating what you're actually checking to make sure it is ok.

What I mean is when it was first reported it was we are all 'cheats' because of the actual sales (not the values of the sales), the clubs involved are having to defend themselves for doing something that is within the rules (and even now some people don't seem to realise that the rules allow this!) did anyone from the EFL come out and say anything? I can't remember anyone saying look the rules allow profit from sales but we're going to check the valuations to make sure they're ok. They let it blow up into something big, they let some club owners openly say other clubs were cheating and threaten legal action, is that a healthy situation?

And then by letting this about the valuations get out in the way it has everyone jumps on it, again, people (fans so far this time, not sure I've seen further comments from anyone else yet) calls the clubs involved 'cheats', and seemingly expects there to be punishment because of the way they've let the press whip everyone up into a frenzy again. At this point no one even knows if the Times are right do they? I've not seen an official statement from someone at the EFL unless I've missed it, in which case it's not been very well reported. If the Times are right then when are the valuations going to be done? What happens if they come back and the values are ok? (I'm not saying that all will do because I only know us and Villa said we got valuations, I'm not sure about the other two clubs involved) Do they hope it just quietly goes away? Or do they actually make a statement clearing the clubs of blame? What then happens to the club owners that called the clubs out for cheating, do they just get to say that and have no comeback for it?

It's a massive mess!

Re Spygate: I was actually on about the initial Police tweet - the tweet below is the one that first put Spygate into the public domain and it all blew up from there.

I didn't want to go into it detail because it's over and done with, I only mentioned it above because I think it's helped influence the Leeds owners attitude to us over everything else, but as you've mentioned about the discrepancies I will.

The day of the game (the day after the tweet above) the club made a statement on the official site, but it was being reported openly by then because of the above tweet, so I assume they felt they needed to say something as they didn't want to let it run and run without comment.

The Police said it wasn't them who told the club who the man was or any information, so I don't know what happened and who exactly confirmed the mans identity or who confirmed what he was carrying, but Lampard said he heard from the Police about the wire cutters. Lampard also said he spoke to Bielsa the day before the game (the day it happened) and he admitted to sending him, but he would have known who he was before that I assume(??).

Lampard and some of our players (Carson, Keogh, there may be others, I can't remember, it's very difficult to find things due to the sheer amount of articles on Spygate) said the Police came into/onto the training ground but the Police said they didn't, the whole thing is very, very confusing!!

I do believe the club have a lot of cameras at the training ground, at least covering the pitches for recording training/games to analyse, so I assume there would've been video of the events at the time that might have cleared things up for the EFL/FA? 

In one of those links above (I think I put that one in!) Lampard said that our kitman had seen the same man before the first game with Leeds last season, our second game of the season I think it was (depending on when the cup game was), and he had been told to move on. There's another article here (which may or may not be correct or relevant) where a member of the public said they'd seen a man 'in the hedgerow' several times during the season.

There were a lot of people that assumed it was the club who contacted the Police, but Mel Morris confirmed on Talksport that it was a neighbour (there are houses directly across the road). The comment's I mentioned in my previous post, about once he admitted doing it to everyone, are also on this link, I thought it was on Talksport.

I remember Bielsa's press conference, the Leeds fans thought it was hilarious that he'd told the world our tactics, it was a few hours before we played at Southampton in our FA Cup replay (which we won on penalties) and then we went on to get 2 more points than Leeds in the remainder of the season! On the 16th Jan (day of the press conference) we were 11 points behind them (43-54), we finished 9 points behind them (74-83).

Re: Rooney, did you see the article about this on Friday? There are some comments in there from 32red's general manager. He makes it very clear that the deal is as I said it was before (as was always going to be the case, it was the only way we could have done it!) yes they are paying us more because we are signing Rooney, but it is us they are paying and not Rooney himself, it is us that will pay Rooney via the increased sponsorship, that's just very good business sense from us.

I'm not sure why how we deal with amortisation is at all relevant, we still have to account for their full value at some point whilst they're under contract, or take less of a profit (or a loss) if we sell them. In fact a lot of our high value players (from the time they were high value compared to most other clubs signings, rather than now where every club seems to be signing high value players) are now off the books due to their contracts ending or being released (Johnson, Butterfield, Blackman) so we will have had to account for it now anyway, whilst we're still in the Championship, so I don't see the problem, it's not like we've got away with not having to take the hit is it?

I think this is where Mel Morris gets unfair criticism, he mentioned before about Boro selling their tax loss to their parent company to make it revenue. Seemingly perfectly allowed within the rules of the time (as he consistently asserts we have been now) gave them a presumably unfair advantage, but no one says anything negative or holds it against Gibson as something that he's done morally wrong! Why is Mel Morris being held to different standards? It is obvious to see his frustration in his comments in the article above, and I think it's completely understandable.

2 minutes ago, Mr Popodopolous said:

Agreed, seems pretty odd...

Certainly you'd think so- hope so too!

Yes, agreed. Surprised that a lot of clubs seemed not to raise this as an issue, certainly not in public.

I wonder too. Have to say all seems quite odd. Part of me thinks it's EFL looking to limit damage/flak post Bolton and Bury.

I don't like the practice with related parties but I do wonder what exactly the EFL expected, how they believed clubs would use the rule! Don't think Harvey was all that bothered in general IMO.

I agree, there was surely only one way it was going to be used, unless they felt that maybe clubs who were selling old stadiums/training grounds or extra pockets of land should have the profits included?

Obviously if clubs weren't aware of it at the time of vote then it's a very different situation, I just can't see that being the case if they are the ones who have to ok the rules.

I think the EFL are trying to repair their reputation after Bury, Bolton, Blackpool and others.

However, I don't think they should be making a point of looking into clubs that have followed the rules as they are written, even if it wasn't as intended, if the intention was different it should have explicitly said it.

All they're doing by doing this rather than nipping it in the bud is causing more resentment between clubs, their owners and fans which will cause more issues in the long run that they'll then have to deal with.

The Leeds owner is clearly still bitter with us after last season due to both Spygate and the play offs, but as Mel Morris said somewhere, it might have been one of his Talksport interviews, I can't remember, as soon as Bielsa did his press conference telling everyone that he'd done it to all teams it was out of our control. I guess we reported it at the time as we probably felt we had to as it had gotten out via the Police tweet on the day, but we didn't know it would blow up into what it did.

I don't know if you follow Andy Holt's tweets in general? It's quite obvious he knows and likes Mel Morris, I also notice a few people have tried to draw him into saying bad things but he's brushed them off, most of it is from Forest and Leeds fans for obvious reasons, some examples of both below

The one below is after we played them in the FA Cup last season

Even Kieran Maguire himself is trying to stir things up, I've noticed before that he does this a lot, but I guess it gets him more work if he does!

The below is a thread of comments from Andy Holt about the EFL, he mentions Mel

6 minutes ago, Mr Popodopolous said:

Makes sense.

Still, and especially under Harvey, I wouldn't put much past the EFL. This subtle yet important rule change certainly was slipped through, usually there is something on the website or some kind of publicity.

Was notable that the Telegraph article said when this rule was changed, they didn't expect clubs to utilise it. Big failings in Governance!

The thing I don't get is, if Championship clubs were given a vote on the rules, then surely they must have known it said this?

Even if it was unintentionally removed during the change of rules, wouldn't all of the Championship clubs have been given a copy of the rules to go over before any vote? Surely that's what would've happened?

If that's the case then I don't see it as only the EFL's problem, because if so many clubs are against the rules saying that then surely one of them would have noticed and pointed it out at the time?

I can't help but wonder if they knew full well it said it and it's only now become an issue because of how it's been used?

2 hours ago, Mr Popodopolous said:

(Potentially) very interesting Tweet by Andy Holt here- or is it that only Championship clubs would've voted on the regulation about asset sales counting towards FFP?

Certainly makes you wonder...

It's a Championship only rule so I can't imagine he'd have had a vote on it.

1 hour ago, Mr Popodopolous said:

Stage One- More reliable from a neutral Governing body than a club- it just is. EFL should have been involved in the valuation process from the start IMO. Well I say more reliable, it's actually 2 valuers who may have a different view but justice must be seen to be done as well as being done- principles applicable here.

Stage Two- Yes, this aspect is true. The two separate valuations, unclear how you would go about settling that part of it. Taken in good faith, yes- but it is awfully interesting that clubs who have done it were largely near or over the line with FFP without it. Why don't other fully compliant clubs do it for example as a revenue boost? Suggests a slight vested interest here...agree that an outside company is necessary.

Yeah, additions cover work done do they not? Additions under Tangible Fixed Assets- certainly the cost involved. On the other hand, we have depreciation. All needs to be factored in.

£55m in 2007- what has enhanced the value other than work on the ground? Is it to the tune of nearly 50% even factoring in depreciation since this time?

Reading's looks more realistic but yes without checking their accounts for the last 15-20 years it'll be hard to tell- not done that yet, could have been revalued, written down, written up in that time- had a load of additions.

Book value means little agreed- read some of that link, will do so in full. Where was the £60m, was this the 2013 revaluation?

Assets in the course of construction- that could mean training ground, infrastructure or whatever else would be classed as a Tangible Fixed Asset though unless specifically stated as such. The interesting but doubtless perfectly legit thing is that I see no reference to the amount that the 2013 revaluation came to, unlike the 2007 one. Been looking at assets under construction and still doesn't explain the uplift.

Probably an old training ground or something, the Reading disposal. In all honesty, part of me isn't 100% against disposal of fixed assets even stadia regarding FFP if it is to a verifiable 3rd party, open and transparent and full market rent is paid though it is simpler and probably best to just disallow it from the calculations end of. Maybe the old Elm Park site?

Found it from 2016:

Stage Two and Three- Not inconceivable that a club knowingly exceed FFP limits- look at Birmingham and their idiotic purchase of Pedersen when under a soft embargo! Admittedly, none of you, Aston Villa, Reading or Sheffield Wednesday have acted like this! Pure idiocy that act...but they surely knew they were over but did it anyway!

I can see that argument but there are not a huge number of loopholes to exploit that aside.

Because a further valuation from the EFL is more neutral and therefore justice is more easily seen to have been done than if commissioned by a club!

I would suspend the clubs who take legal action if I had my way. It can be done- these arbitration panels are pretty binding- QPR nearly got refused re-entry to the FL in 2015 when threatening court etc, and that was a real risk until they decided to go in and fight within the arbitration process. Vote of the 24 Championship clubs to suspend membership of legal action- maybe something within the regs or small print, articles of association? Would be interesting to see how clubs would vote in this scenario even if it had no effect! EFL commission on this matter can issue anything from a warning to expulsion from the Football League, it's an independent Commission and they have a very wide remit of powers! Pretty sure in 2014/15 there was a risk that the EFL would allocate QPR no fixtures if it came to it with regards that FFP scenario on their return.

That's my point though, it's a different person giving their valuation, nothing about it makes it more likely to be right than the one from the club. Just as an aside, what would happen if the valuation actually found it to be worth more?

Well yes, to help FFP compliance would likely be why they've been sold, but that doesn't mean they were overvalued. Clubs with no need (or no wish) to sell aren't likely to do it as a revenue boost so they don't need to get a valuation.

Yes, it does need to be factored in, which is what the accounts do.

What enhanced the value on the books from £21m to £60m the first time it was revalued? I can only assume that market changes have affected the valuation as well as the work done to it. As I mentioned, the depreciation seemed to be included in the original revaluation as it changed from £5.6m to £1.3m with that, so any further revaluation would I assume also take into account the depreciation.

Reading's doesn't appear to have been revalued (there was no revaluation reserve listed after the stadium appeared), written down or written up during that time, there were however additions each year. I made a note of the figures from the 'Freehold land and buildings' section, and checked for the other bits like revaluation reserve elsewhere, hope this helps as a starting point (and I'm really, really hoping this shows up ok when I post! )

            COST/VALUATION  DEPRECIATION    NET BOOK VALUE    ADDITIONS    RECLASSIFICATION    DISPOSALS    PROFIT ON DISPOSAL    REVALUATION RESERVE

1996    2,424,539                173,917                  2,250,622                   -                       -                                       -                        -                                          1,750,000
1997    3,492,355                192,355                  3,300,000                   -                       -                                       -                        -                                          2,727,566
1998    3,492,355                199,986                  3,292,369                   -                       -                                       -                        -                                          2,727,566
1999    30,284,529              403,790                 29,880.739                 -                      30,284,529^                   (3,492,355)     674,343                              -
2000    30,285,513              1,009,015              29,276,498                 984                  -                                      -                        4,250,000+                         -
2001    30,195,564              1,610,528              28,585,306                (89,949)           -                                      -                         -                                          -
2002    30,756,172              2,217,179              28,538,993                 560,608           -                                     -                         -                                          -
2003    32,108,199              2,880,227              29,227,972                1,352,028         -                                     -                         -                                          -
2004    32,657,449              3,597,711              29,059,738                549,250            -                                     -                         -                                          -
2005    33,517,935              4,315,204              29,202,731                860,486            -                                     -                         -                                          -
2006    33,676,456              5,195,931              28,480,525                173,725            -                                    (15,204)            -                                          -
2007    36,604,151              6,061,510              30,542,641                2,927,695         -                                    -                          -                                          -
2008    41,309,673              6,936,345              34,373,328                4,705,522         -                                    -                          -                                          -
2009    41,514,968              8,409,454              33,105,514                264,523            -                                    (59,228)             -                                         -
2010    41,574,629              9,947,932              31,626,697                59,661               -                                    -                          -                                         -
2011    41,566,830             11,494,789             30,072,041                27,944               -                                   (35,743)            -                                          -
2012    42,786,641             13,044,124             29,742,517                1,219,811          -                                   -                          -                                          -
2013    45,899,086             14,717,695             31,181,391                3,112,445         -                                    -                          -                                          -
2014    45,749,698             16,159,042             29,590,656                870,920             -                                   (1,020,308)       -                                          -
2015    42,434,216             17,670,997             24,763,219                2,330,873          -                                   (5,646,355)      11,000,000                        -
2016    43,336,478             19,036,759             24,299,719                902,262              -                                   -                          -                                         -
2017*   38,689,077            17,516,376             21,172,701                246,399              -                                   -                          -                                          -
2018~  2,864,247               2,216,071              648,176                      551,237              -                                  (36,376,068)     6,518,222                         -

^ From 'Assets in the course of construction'
+ During the year, the company granted a 125 year lease for part of its land to Madejski Stadium Hotel Limited for £4,250,000
* 'Training ground improvements' split off from 'Freehold land and buildings'
~ Sale not listed under 'Related party transactions', sale was to their immediate parent company Renhe Sports Management Co Limited, so presumably they used FRS 102 not to disclose it.

The £60m I was referring to was when the net book value in the accounts jumped up from £21.6m to £60.1m with the revaluation in the 2008 accounts.

The 'Assets in the course of construction' I was referring to was Reading's stadium, not to do with our accounts, see above. I assumed the 2013 valuation of our stadium was similar to the 2007 one due to the wording I quoted yesterday, where it said about 'material change'?

Ahh thanks, that explains that, I didn't make a note, so obviously didn't see that mentioned. That's quite high? £11m profit just on the land?

Yes, I know Birmingham ignored it, but we have said all along that we will abide by it, there has never been a time when we've said anything other than that, I assume the others are the same.

What I meant about the valuation and not having gone over otherwise was because it's perfectly allowed to use the profit from a stadium sale (that is clear in the rules and doesn't seem to be disputed) the issue being mentioned at the moment is the valuation. The clubs will have worked out their figures on the valuation they were given. Had this valuation been lower, they would have adjusted their future spending to counteract that, in our case, I don't believe we needed to post a £14.6m profit? In which case, say the stadium was valued at £61m for example, the £5.4m loss posted instead should still have seen us under FFP for that period as I don't believe we were over from the 2 years before, but we would adjust future spending to account for that. Surely as it is we will have worked our future seasons planning on the valuation we were given, so if the valuation is lowered it might see us over, where we wouldn't have been if we had known that was the case in the first place.

It's still entirely possible that the EFL's valuation is the same/very similar as the clubs anyway, given that they have both commissioned independent valuations.

They'd be perfectly entitled to take legal action (and that's also why there's an appeals process). It would be a very different situation for a club that knows they've not kept to the rules and have made no attempt not to, to a club that knows they have and have the proof of that, ie. an independent valuation stating the value they worked to.

1 hour ago, Mr Popodopolous said:

Should be 3 stages to this set of investigations IMO.

Stage One- Test the value and whatever comes out is the value. If correct or broadly so then fair enough, if not. we escalate to the next stage...

Stage Two- If the values are deemed to be vastly overinflated- and I don't think the Madejski is, £26.5m for a modern ground built in late 1990s seems reasonable, capacity 24,161. The others are less clear. Anyway Stage Two should then be deduction of the surplus between sale price and independent valuation from the FFP calculations- with current, and past FFP results recalculated on this revised basis. Has to pass the duck test /reasonableness test to avoid this stage!

Stage Three- If applicable by which I mean if the readjustment pushes a club over the limits then it's an EFL independent Disciplinary Commission Birmingham style. Even if it doesn't push them to this stage, the "profit" still must be readjusted accordingly with the readjusted FFP results the new starting point.

With an additional possibility of deliberate/aggravated breaches coming into the equation if applicable. Attempts to deceive, distort the competition etc.

From the EFL's point of view that's probably how they will look at it, but from the clubs point of view (those that got valuations anyway) they will likely look at it a very different way.

Stage One - Why would the clubs just accept the EFL's independent valuations if they vary from the independent ones they obtained? You can't just argue that the EFL obtained one is the correct one simply because they are the ones that obtained it. If the clubs have also obtained their own independent valuations then they will argue that theirs are the correct ones too, no? Is that not the whole point of getting them in the first place?

Stage Two - Again, if the EFL's were lower they could argue that the clubs were overinflated, but the clubs could counter argue that the EFL's were undervalued.

After all are any of the people involved in a club actually qualified to know their stadiums valuations? Presumably this is why they get in companies to provide them with it. They will surely have taken that valuation in good faith?

With ours particularly, given the £55m valuation in 2007 (presumably it was similar in 2013? Given the wording in the accounts mentioned previously), with them knowing all the work they've done since (pretty sure most if not all was also after the 2013 revaluation) and how much that has cost etc, I can't imagine that anyone would think anything wrong of a valuation of £81m around 11 (or 5 if that one was similar) years later?

You actually have no idea whether Reading's was at the correct value either, but as it was lower you're making it the benchmark??

The book value of an asset actually doesn't necessarily mean a lot does it, unless it was very recently revalued?

I notice from looking through Reading's accounts that they didn't appear to have ever revalued their stadium from the time it was built to the time it was sold, doesn't this mean the book value means very little to the actual valuation of the stadium? Don't forget when we revalued Pride Park it (the net book value) went from around £21m to around £60m, nothing had changed bar the stadiums valuation. The depreciation also went down, so the revaluation had obviously taken this into account, as the link I posted yesterday seems to suggest happens.

If this is the case you cannot judge Reading's stadium value on the book value given that was only relevant to its construction cost (and any additions made). The only reason their value changed (upwards) through any of the accounts was because of those additions, which were every year from the year their stadium value was reclassified from 'Assets in the course of construction', the largest of which was around £4.7m.

I notice it appears they disposed of another asset in 2015, on the books for around £5.6m, I think profit on disposal was listed as £11m, but this was before the FFP regulations changed to allow the profit in 2016. They actually made more profit on the disposal of this asset (I'm not actually sure what it was) compared to their stadium.

Stage Two and Three - If the EFL's valuations were to come back different to (ie. lower than) the clubs, the scenario you mention above assumes that the clubs knew that the valuations were too high and they have knowingly gone over FFP limits.

If you adjust the allowed spending in line with a potentially lower EFL valuation which subsequently means the clubs have gone over the allowed limit and would then be punished, then they will surely argue they would not have done this if they knew at the start that the valuation would need to be queried as they took it in good faith?

I'm not sure how you could punish a club based on a further valuation providing they have all the evidence of the valuation they obtained themselves at the time?

I'm sure if the above happened there would be a legal challenge from the clubs involved, and it would be a very long and drawn out process.

23 hours ago, DerbyFan said:

Can you remember Mel Morris being on Talksport? He mentioned the potential of a roof but I'm sure he said that the stadium was taken out of the club because it will cost (which is obviously FFP exempt, infrastructure improvements) and be worth a lot more than £81m when that is done. I think it was £180m that he said? I'm not sure if that interview is still around anywhere, but I think he said something about how they would all have a problem if it was sold for £180m (the value after the roof) instead of the £81m, something along those lines.

Sorry to quote my own post, but I've found the interview on youtube, one of our fans had put it on, the video below should start at the beginning of the stadium discussion.

He did mention £180m, it's not clear whether that would be because of the roof construction cost, or because of the extra money holding the events it would allow brings, but I guess as that only happens because of the roof then they're interlinked.

16 minutes ago, downendcity said:

The same as buying a house?

So the purchaser accepts the vendors valuation - because that's what you are suggesting, if Derby County obtained the valuation ( *It was the clubs property, they are the ones that wanted to sell, so they are the ones that got a valuation, the same as selling a house.)

It's a mess, because we now know that the EFL cocked up the new ffp rules as far as stadium sales are concerned, so the sale itself did not breach the rules. However the issue of valuation is a hot potato. Because the sale was a paper transaction, and to another of the owner's companies, there is a strong suspicion that the sole motivation was to enable the club to avoid a ffp breach and the "strong" valuation enabled this.

That being the case, and I know it's with the benefit of hindsight,  it would have at least been better had independent valuations been instructed by both the club and the company buying Pride Park, and from separate valuation firms ( which would almost certainly have been the case were the stadium have been sold on the open market to an unrelated company) The cynic in me suspects that as Morris owns the club and the company buying, both valuations would have still been the same, or within a gnat's whisker of each other, but at least there would a better element of independence than appears the case at the moment.

 

 

No, I'm talking about it from the vendors point of view. If you wanted to sell your house you'd get a valuation and put it on the market at the market rate. That was my comparison of the situations.

In the clubs case, the purchaser has accepted the valuation as when it's a RPT you'd have no need to get a valuation because you know that you've just had it valued and you trust the valuation, it would be a huge waste of money and completely unnecessary, the only people that gain in that situation are the valuers.

The link below is a very interesting, if long, read

https://www.rics.org/globalassets/rics-website/media/upholding-professional-standards/sector-standards/valuation/drc-method-of-valuation-for-financial-reporting-1st-edition-rics.pdf

It actually post dates the sale, but I can't imagine much has changed from the time of the valuation.

12 minutes ago, Mr Popodopolous said:

Well I'd have had more faith in the veracity and independence of the Villa Park valuation, transaction had the EFL commissioned it.

When it's commissioned by the club, still that element of doubt...

Hsf the EFL come out and publicly stated as Mr. Purslow was seemingly keen on that FFP was passed- then that would've been case closed.

Sources close go the transaction are claiming it but nothing from sources close to the EFL itself as far as I can see.

Why would the EFL be commissioning stadium valuations? They're only doing it now because our clubs have sold them and people are questioning it, they wouldn't have done it on a whim.

It was the clubs property, they are the ones that wanted to sell, so they are the ones that got a valuation, the same as selling a house.

Did you read the Sky article from earlier today? Looks like it's very expensive to get valuations done.

https://www.skysports.com/football/news/11696/11802891/derby-defend-80m-pride-park-value

Quote

The Midlands club have also told Sky Sports News they believe the cost of that independent review into their stadium and others will be a six-figure sum and something all 24 Championship clubs will be expected to share, which has also been met with concern from at least one other Championship club.

20 minutes ago, Mr Popodopolous said:

How can they deem that independent of the club commissioned them??

Because they are commissioned as a qualified professional to provide a service.

The EFL have today announced that they have commissioned an independent review of the regulations and procedures concerning the financial sustainability of EFL clubs.

It's exactly the same situation.

1 hour ago, cheshire_red said:

Derby County could yet face sanctions for possible breaches of financial regulations after the English Football League ordered an independent valuation of their Pride Park stadium.

Derby are among a number of clubs who have been accused by rivals of exploiting a loophole in the rules that has allowed them to buy their own stadium to make themselves financially compliant.

That has prompted the EFL to commission property experts to provide a valuation of the Sky Bet Championship club’s ground, The Times can reveal. Sources have told this newspaper that independent stadium valuations have also been commissioned for Sheffield Wednesday and Reading.

In Derby’s case, owner and chairman Mel Morris used a separate company to buy the ground for £80 million — with a deal to then lease it back to the club — when it was listed as an asset on the club’s books with a value of just £41 million.

It meant Derby reported a pre-tax profit of £14.6 million earlier this year when losses in excess of £13 million per year over a three-year period amount to a breach of the EFL’s profit and sustainability rules.

Last season Birmingham were docked nine points after recording total losses of £48.8 million from 2015-16 to 2017-18, taking them close to £10 million more than the £39 million limit.

It remains possible that Pride Park’s valuation could be boosted by a proposal to build a roof that would make the stadium a multipurpose venue. But the 24 planning application documents currently listed on Derby City Council’s website appear to be focused on a two-storey extension for a food court.

One property expert with knowledge of Pride Park believes it could be valued even lower than the £41 million previously stated in Derby’s books.

A senior figure at a rival Championship club dismissed plans for a new roof at Pride Park as “irrelevant” when it had not been built at the time of the purchase by Morris.

Derby, who have made a slow start to the season under new manager Phillip Cocu and sit 19th in the Championship table, are already under renewed scrutiny after signing Wayne Rooney as part of a controversial £100,000 a week player/coach deal in collaboration with a major betting firm.

Clubs have already accused Derby, among others, of breaching financial fair play rules, with Middlesbrough even reportedly considering legal action. The Middlesbrough owner Steve Gibson levelled such accusations at both Aston Villa and Derby at the Championship’s March meeting and the Leeds United owner Andrea Radrizzani argued that Derby should have faced sanctions for selling their ground to their owner.

“We should revisit the rules,” said Radrizzani at the Financial Times Business of Football Summit. “We were judged as a cheating club when we sent a scout to watch [Derby] training, so they should take a similar view on what I would say is greater cheating by these clubs.

“For me if it’s cheating to send a scout in a public street, what should be the punishment of selling the stadium to a sister company to increase income of the clubs?”

Derby, Sheffield Wednesday and Reading have consistently said they have not breached any regulations.

I presume this is the full article? I have never created an account with the Times so haven't actually read past the beginning, so thanks for pasting it in here.

It says a lot without actually saying a lot doesn't it that article and once again, it is the Times writing a negative article about us, funny that!

'Could yet face sanctions', 'possible breaches' and 'it remains possible', great so Mr Journalist, you don't actually know if we will face sanctions, you don't actually know if we have breached the financial regulations and you have absolutely no idea whether the valuation was 'boosted' by the proposal to build the roof, wonderful stuff.

Ahh yes, lets quietly mention Sheffield Wednesday - who he neglects to mention had a much much larger percentage increase on book value, a sale price of around £60m but a valuation that was made in 2014 for only £22.25m(!) - and Reading - who only made a £6.5m or so was it profit on book value? A book value that seemed very low in the first place (although I notice from their accounts they don't appear to have ever had their stadium revalued since it was built). Why do they require an independent valuation for that one, it's not like it was excessive?

Could it be that they're getting valuations for every stadium sale and they don't necessarily expect to find anything awry with any of them? That doesn't make for a good story does it?

'One property expert with knowledge of Pride Park believes' - brilliant, would that be Pride Park the area, or Pride Park the stadium I wonder? Unless they're a property expert with experience of valuing stadiums then I'm not sure how it helps that they have knowledge of Pride Park, a stadium is a bit different to an office block or a car showroom.

Great let's just mention the Rooney deal while we're at it. But let me get this right, can't sell the stadium for the independent valuation we obtained even though fixed asset sale profits are within the rules, can't sign a big name player with a great sponsorship deal for the club. What pray tell can we do to increase our revenues that isn't frowned upon?

And to finish it all off, let's just quote the Leeds owner from months back!

Sorry for the rant, I got carried away! 

17 minutes ago, Mr Popodopolous said:

Mel Morris is still a related party though, FFP regs would confirm this.

RPTs can be adjusted downwards under FFP regulations- I think the EFL are doing the right thing here but may lose out as they should have got an independent valuer in when it was first mooted.

Property experts though- I think the valuation by the EFL might take precedence but who knows- vote of the 24 clubs for each of the valuations?

The 2013 revaluation- there are a few queries here, Revaluation Reserve perhaps? Which you mentioned IIRC.

Definitely questions to answer if the independent auditor hired for and paid independently of a club, has it under £81m or more accurately, substantially under £81m.

Anyway if all is well, then the £81m will stand won't it.

They owe it to the competiition and the integrity of it to get it valued independently, paid for by the League not by a club- for all of the transactions that are being investigated. I'd suggest a ground valuation easier to challenge than RPT sponsorship.

On a general note, I remember the extra work done in the future to enhance/release the value now.

I agree with this unnamed Senior figure.

This is from that Times article.

Yes he is, which is exactly why it is mentioned under Related party transactions in the accounts, 'companies under common ownership'.

But we also got an independent valuer in to get the sale price/market value.

'Property experts though', who exactly do you think did our valuation? Do you think we just got a random person in off the street?

You're not happy with our independent valuation, done by a presumably qualified professional, but want to potentially put it to unqualified people who have no knowledge of the subject to decide if it's right, that is quite frankly absurd, if you do that you might as well have got in that random person off the street.

Neither the revaluation reserve, nor the book values, changed with the 2013 valuation although as far as I can remember, all of the work I mentioned previously has been done after this valuation, ie. since Mel Morris bought the club.

The actual wording in the accounts is

Quote

As required under FRS 11 'Impairment of fixed assets and goodwill' the freehold buildings with a historical cost of £20,852,867 known as Pride Park Stadium were valued by independent valuers Jones Lang LaSalle on 23 May 2013  The valuation was prepared on a depreciated replacement cost basis and was made in accordance with the Royal Institution of Chartered Surveyors Asset Statements of Valuation Practice and Guidance Notes  Based on this valuation the Directors have assessed the carrying value of the freehold buildings and determined that the current value is appropriate

...

The directors are not aware of any material change in the valuations of freehold land and buildings and the current valuation above reflects their best assessment of the existing open market value of the property

this is interesting for two reasons 1. as it says 'the current valuation above' which presumably is the 'Cost or valuation' figure, rather than the net book value? 2. it says 'reflects their best assessment of the existing open market value of the property' - this confuses me a little because of the quote in my previous post where it suggests the valuation is different for different purposes.

I don't know whether it will or not, I can only go by what the club say, I have no reason to doubt them, they have been very clear about the whole thing. They obviously had a valuation saying £81m, which is the figure they have worked on.

I don't know if you've ever watched property shows on tv, there are times when the valuations vary quite wildly, but they are all done by professionals, how do you know which one is correct?

Can you remember Mel Morris being on Talksport? He mentioned the potential of a roof but I'm sure he said that the stadium was taken out of the club because it will cost (which is obviously FFP exempt, infrastructure improvements) and be worth a lot more than £81m when that is done. I think it was £180m that he said? I'm not sure if that interview is still around anywhere, but I think he said something about how they would all have a problem if it was sold for £180m (the value after the roof) instead of the £81m, something along those lines.

Should the EFL's valuation not match that of the club I imagine the club would fight it all the way given they also had an independent valuation at the time of the sale. They could not be expected to know the valuation, it's not their field of knowledge, getting a valuation done is all they can do in that situation.

47 minutes ago, Davefevs said:

@DerbyFan this looks interesting!

Does it? As has been said many times, the club told everyone when the accounts were released that they got an independent valuation to determine the market value. I assume they have all the evidence of this valuation. The valuations they obtained in the past were from reputable companies, they were mentioned in the accounts.

Should the valuation the EFL obtain prove different to the clubs, then I'm not sure what could happen as I'm not sure what makes their independent valuation any more correct than the club obtained one? They're both independent valuations after all, and they can surely both argue that theirs is correct.

The club have been open about the sale and it was sold to outside of the group of companies, unlike Reading, I believe they sold theirs to their parent company. I can't remember the situation with Sheffield Wednesday and Villa now, whether they sold in or out of group.

I don't know whether market value is different to depreciated replacement cost value, quotes from websites that I've posted in this thread before make me think it is. The quote below being one of them, I'm sure there was another, I'd have to re-find it though. I think it mentioned a valuation only being used for accounting purposes, so presumably that means the valuation for other purposes would be different, whether that is more or less I'm not sure.

https://www.lsh.co.uk/explore/services/valuation

Quote

Sports stadia and football ground assets are valued in different ways, depending on the purpose of the valuation. As each approach may produce different figures, it’s essential to understand the purpose of the valuation.

We offer an experienced valuation service in this specialist area for both private sector and public sector bodies.

1 hour ago, Davefevs said:

@DerbyFan re Bielik post, looks like you are getting your house in order.

Yes we are, I've said before the club knew they needed to, they have been saying it for a few years, from what we've been told at fans forums the amount of contracts ending helps a lot, we weren't getting value out of the wages we were paying, too many not playing or playing only a bit part, even with the residual value hit that we will presumably take.

It seems it's the wage bill that really hurts a club rather than transfer fees, within reason. I'd imagine we've cut at the very least £10m off the wage bill now, although expecting it to be a fair bit more to be honest, just depends on the ones coming in.

25 minutes ago, Mr Popodopolous said:

Interesting though, specifically on Sheffield Wednesday- credit to BBC, this is where it is from. Mike McCarthy BBC Radio Sheffield.

This is particularly interesting, some of the bits in bold I mean.

Not too bothered about their fans mind being put at ease, in fact the more edge the better for all I care, but the key questions:

1) Why non-disclosure of when transaction took place?

2) Smoke and mirrors? Either now or then!

3) Land Registry does not take that long to update- how do you backdate a sale so far?

I know Mike McCarthy has basically ripped off some of my q's but won't hold it against him,  but on a serious note these are all good questions and the EFL should be scrutinising this very closely indeed.

He also states on Twitter that the company listed as owning Hillsborough- well it's unknown.

That's one of the reasons I was confused about their ground sale yesterday, see my post below:

On 11/07/2019 at 14:07, DerbyFan said:

I think it was earlier this year their owner told them they would be in very big trouble with FFP if they didn't get promoted? If they had already done the stadium sale then that's not the case? That makes me think it was backdated, they seen us do it (after their owner made those comments) and realised they could do it too?

Does the fact that it was sold (according to Kieran Maguire) to a Hong Kong holding company (so not on Companies House?) make a difference at all? I know they announced it as a related party transaction.

I had thought it was earlier this year, but it seems it was actually in December 2018. My 'very big trouble' bit was paraphrased as eight figures seems very big trouble to me! But breaking it by an eight figure sum doesn't fit with their accounts from end of July 2018?

They were also under an embargo from April until mid August 2018, according to this BBC article. Would the EFL not have immediately lifted their embargo once notified of the sale?

8 minutes ago, Mr Popodopolous said:

I wasn't aware you could backdate and indeed if that Land Registry entry I found was correct and in date then this raises serious questions IMO. Unclear if the one who purchased it was Chansiri himself or his family- doesn't matter in terms of RPT rules, but still not wholly clear.

Loss level probably that, an extension of accounting period meaning more wages amongst other things. Largely that though! Their wage bill did rise by £13.1m that said.

I think it was earlier this year their owner told them they would be in very big trouble with FFP if they didn't get promoted? If they had already done the stadium sale then that's not the case? That makes me think it was backdated, they seen us do it (after their owner made those comments) and realised they could do it too?

Does the fact that it was sold (according to Kieran Maguire) to a Hong Kong holding company (so not on Companies House?) make a difference at all? I know they announced it as a related party transaction.

8 minutes ago, Mr Popodopolous said:

It was!

However this one is ludicrous, it's possible there were some additions and subtractions which took it up to somewhere between £22-23m, but the sale price is truly farcical here- makes your transaction look reasonable and entirely sensible. Maybe with additions it was, but my instinct of Sheffield Wednesday being 2nd only to Aston Villa in my own "FFP League table dodginess" appears right. Even Peter Loehmann only assumed it was a £12m profit tor Hillsborough in hias projections.

Couple of other early points from a quick read of their accounts.

1.  Accounts only signed off and dated 20th June 2019- just the 3 weeks late.
2. The profit- of £38m- appears in their profit and loss statement at the start but not in their cash flow. Odd.
3. How can we be sure it took place within the relevant accounting period? We can't! I have my doubts as to whether it took place by 31st July 2018 but Land Registry would surely show all?
4. How on earth did their losses soar to £35m without it? Mad.

I thought there was a land registry entry that showed in May of this year it was owned by the club? Can you backdate? I know it was something you questioned about ours until finding that land registry entry from January(?) (ironically on Owlstalk!)

I presume the loss level is because apart from Hunt to you, I don't think they've actually sold anyone else since their owner took over?

50 minutes ago, Mr Popodopolous said:

BREAKING NEWS.

Sheffield Wednesday accounts out- Hillsborough SOLD for £38m profit.

Their accounts on their site, but not at CH yet. Auditors happy?

Quick scan suggests losses of around £35m in 2017/18- without this of course.

Makes a ******* mockery.

Puzzled as to when the transaction took place too- doubtless it'd show on Land Registry?

Got to admit I'm a little confused about this one.

Just took a look at their 2017 accounts, on page 26 (29 of the pdf) under note 11, it says that in 2014 the freehold buildings were valued at £22,250,000.

And you thought ours was a big increase! 

13 minutes ago, Mr Popodopolous said:

EFL permitted the loan settlement then or? Exceptional items like that don't usually count towards FFP. Still you have said before your youth/academy expenditure quite high, it is a Category A Academy and the figures do bear this out. £9m feels in the right ballpark though if loan settlement excluded it is a bit- based on my calcs and what the accounts show, for £9m assuming loan settlement excluded, then £9,828,810 on Youth Expenditure that year- was there a lot of work done on it 2015/16, the academy? Unless the £9m refers to the Sevco 5112 figures, which I haven't really looked at much yet.

Anyway my calculations- done quickly and will probably require revision:

Total loss on accounts for Derby £47,966,827.

Subtract:

1. Infrastructure Expenditure to June 2018- £11,445,434
2. Depreciation on Fixed Assets- £9,073,763
3. KNOWN Youth Expenditure- we can only guess for 2015/16, something between £4-4.5m? Anyway known youth expenditure would be £8,585,671.
4. ASSUMED Womens and Community Expenditure- £1.5m over 3 years seems a reasonable guess? If you have any more info that'd be interesting.

Add back for FFP purposes the loan cancellation/settlement whatever it was £12,433,568.

You definitely pass without Stadium transaction, for Derby County that is. Sevco 5112 if that's used for your 3 year submissions/rolling figure, then it'd be more than likely a different matter without the sale and leaseback.

I don't know re. the loan settlement.

There was a lot of work done on the academy, but I'm not sure on the timings of it, some may have been later, I'm also not sure if it would come under the Infrastructure Expenditure or the Youth Expenditure, it almost doubled in size area wise (I don't think the first team use the pitches in the new area, so that may come under the Youth?) and there were buildings added inside the main u-shaped one (which I assume everyone will use, so probably the Infrastructure?).

That article does say:

Quote

Almost £6m was invested on operational functions across both Pride Park Stadium and the Training Centre in partnership with the University of Derby. Developments included; new undersoil heating, a top class pitch and LED floodlights at the stadium and the completion of further significant pitch and infrastructure improvements at the Training Centre. 

That could mean the replacement pitches (changed to hybrid), as I think they were installed at the same time as the stadiums, and not the brand new ones in the newly acquired area, which is the bit I think could have been later.

Re. 4, I know we do a lot of Community work, but I've no idea of the costs involved.

10 minutes ago, Mr Popodopolous said:

Took a bit of a look at those Derby accounts in full for 2015-16 to 2017/18- not really looked at Sevco 5112 Limited much yet but for the sake of argument let's assume the reason Derby did the Sevco 5112 Limited thing and all the associated companies was because of massaging FFP/accounting figures? Tax efficiency too? This is before/without stadium shenanigans etc obviously!

Derby County 2015/16

Loss- £14,725,353- However included within is exceptional operating income of some £12,433,568. Don't think that should be included for FFP so let's adjust that to £27,589,921? This is headline loss/adjusted loss after player sales, interest reserve etc but before adjustments for FFP e.g. infrastructure, depreciation youth etc. 

Derby County 2016/17

Loss- £7,872,715

Derby County 2017/18

Loss £25,368,759

Total losses- before the allowables of course- of £60,831,359.

However allowables now kick in:

2015/16

• £5.815,221 on Infrastructure Expenditure- under Purchase of Tangible Fixed Assets
• £2,445,890 in terms of Depreciation of Tangible Fixed Assets
• No figure for Youth Expenditure- that's as distinct from improvements to ground, academy etc. The average figure for the 2 subsequent years added then divided seemed to be £4.29m per year so let's go with that?
• Let's assume £500,000 in total for Women's and Community?

2016/17

• £4,160,399 in Infrastructure Expenditure- under Purchase of Tangible Fixed Assets.
• £3,176,360 in terms of Depreciation of Tangible Fixed  Assets
• £3,961,509 in Youth Expenditure
• Let's assume the £500k still holds.

2017/18

• £1,469,814 in Infrastructure Expenditure- under Purchase of Tangible Fixed Assets.
• £3,451,513 in terms of Depreciation of Tangible Fixed Assets.
• £4,624,162 in Youth Expenditure.
• Let's assume the £500k still holds.

Not done the calcs yet but I think they pass to June 2018 even without ground transaction, albeit not by a huge amount- even if Youth Expenditure in 2015/16, plus Women's and Community expenditure in those three seasons is zero- which I doubt of course.

We announced the FFP loss in 2015/16 as £9m here