AnotherDerbyFan

12 minutes ago, Harry said:

Of course. But those are the base figures as far as I can tell. 
I think it means we’re ok this year, as they’re expecting the covid adjustment to bring us below the £39m. 
 

However, as I mentioned last year, the problem comes next year. 
 

Next year the 2018/19 profit of £11m comes off. 
So right now the basic figures are £24.2 + £28.5m = £52.7m. 
As a basic figure, to get us below the £39m next season, the accounts for 22/23 would need to post a profit of £13.7m (less whatever covid adjustment they allow). 

So that’s a swing from a £28.4m loss to a £13.7m profit required in the next year. 
Which basically means we need to sell and sell big. 
 

Or we get promoted and the problem goes away

More like a £20m improvement to a £5m loss at the very least, when exclusions are accounted for.

10 hours ago, Davefevs said:

Dunno, what did they do?

Went into administration in July 2020 and exited in March 2021.

Last set of accounts prior to entering was for the 18/19 season (March 2020)

In March 2022, the new owners (Phoenix 2021 Limited) released a partial 20/21 set of accounts.

19/20 accounts were never submitted to Companies House. Full year for 20/21 have not been submitted either. P&S submission will have been submitted to the EFL for all relevant periods.

8 hours ago, Mr Popodopolous said:

His Ahead of the Game column. Yep restrictions published as with Derby themselves and Reading would be good.

https://www.dailymail.co.uk/sport/football/article-10996387/AHEAD-GAME-EFL-fury-BBCs-20m-Champions-League-TV-deal.html

They were restricted to about £15m IIRC from the Agreed Decision but Matt Hughes settles on £12m- maybe that's solely for players, I remember Reading were £21m or so last season and down to £16m for this season.

For what it's worth, the 'wage bill' during the first 8 weeks of admin worked out as £14m over the season. A good £2-2.5m must have been knocked off in January. Reports suggested wages of about £1.6m needed to be paid in May and June (£19.2m per season)

I'm guessing Matt Hughes' £8m is just players.

13 hours ago, Davefevs said:

Now that Derby are up and running, what happens to things like submitting prior year accounts with Companies House, and P&S submissions to EFL.

What did Wigan do?

9 hours ago, Barrieowl said:

I know Mr P has had his issues over Wednesday and rightly so, some points we will never agree on but given we had an embargo over late wages last year I find how Derby have recruited to be truly wrong.

They look capable of challenging rather than struggle.

Last time I checked, the terms for exiting administration are not "must struggle". Wigan exited administration in March 2021, yet I didn't see a single person saying it's not fair because they didn't struggle (winning the league instead)

We also paid wages on time every month last season and have now completed our term under embargo (for P&S reasons and administration).

All of our signings are within the business plan as agreed with the EFL. A week ago we only had 5 'senior' players contracted to the club, so it's not as if signings weren't expected. All for free too, unlike Wigan, who spent over £600k on a single player.

It's almost as if Derby won't have higher revenue than half of the Championship next season despite being a league below and without the TV money. 

4 hours ago, Mr Popodopolous said:

Well I didn't think they would go bankrupt though I am glad they have suffered.

I was pondering the other day whether it would change their fans much but I doubt it- in certain aspects ie EFL regs and so forth, the most arrogant, know-nothing fanbase I have seen at this level- I am not including those who are largely PL just down for a while but consistently Championship based clubs. Clowes seems decent from early bits and what I've read- they don't deserve him I expect a sizeable minority of their entitled fans. Wish I'd gone to Pride Park in April but there's still time- maybe next season if I see my mate up North.

Get that writ in Mr. Couhig unless the claim has already been settled. Key q too is what % to HMRC...public money is public money after all.

You really are a very sad individual.

On 18/05/2022 at 21:13, Mr Popodopolous said:

The Derby fan suggesting another loophole.

Posts like this harden my position. Hopefully the EFL will have put the Straight line bit in as a condition.

https://dcfcfans.uk/topic/38855-the-administration-thread/page/1579/#comment-2341482

It was put in the Nov 2021 agreed decision. Then the new EFL requirement to use straight-line was announced in Feb 2022.

22 hours ago, Mr Popodopolous said:

Just on the Pride Park bits, my understanding on a few aspects based on reading up.

1) Derby City Council would borrow the money.

2) Councils can borrow at lower rates seemingly, saw 2.8% mentioned somewhere.

3) The rent would be tied to the interest payments. Think the EFL need to substitute in for FFP purposes a paper market rent, perhaps based on  the original Fair Value?

4) FFP aside, think when such a deal occurred with Plymouth, the rental was an annual yield of 8.5%. A £20m purchase means £1.7m rent in simple terms.

5) I would also argue that there is a case for inflation linked rent to protect the investment for the council. 

6) Going back to the Plymouth deal again, the sale price back to the club after a few years of rent was a % greater than the purchase price. Cannot remember, but seemed not to be any discounting for rent.

Council could actually do okay out of it if on strictly commercial and arms length terms.

Reconsolidation of stadium ownership into the Football group is also unacceptable any time soon. A section of the Agreed Decision should give the EFL grounds for pushback

None of this really matters as it won't be he council.

1. yes
2. yes
3. Doesn't need to be fair value when they aren't related parties
4. That was in 2011 when there was a recession. I wonder how much that impacted the interest rates payable. Despite everything that's happened over the past couple of years, I wouldn't expect to see much variance in interest.
5. See above.
6. Council bought it for £1.6m in 2011, then sold it for £1.7m in 2016

22 minutes ago, ScottishRed said:

I would be hugely surprised if HMRC agreed to this, legal or not, it is still a precedent that stretches across all businesses not just football.

I think that there will be a huge backlash from tax payers both corporate and individual who see a football club getting a sweetheart deal - it is simply not acceptable.

If the new ‘owner’ is prepared to pick-up the full bill, then no problem but it sets up a very dangerous scenario going forward. There will be companies out there queuing up to offer 35% of their tax bill rather than the full amount.

it is totally immoral if true.

As I have stated many times, the precedent is one of HMRC getting as much as they possibly can. They will continue to deal on a case by case basis. If they think they can get 100% from the next club or business to enter administration they will push for it.

What you're arguing for is for HMRC to receive nothing.

On 17/04/2022 at 17:04, Mr Popodopolous said:

Putting my obviously relatively partisan views to one side, I may as well ask.

@Derby_Ram @AnotherDerbyFan

Pearson and Derby. What happened? He got sacked in not much time at all, on paper looked a very good appointment. He's not exactly someone who demands a big chequebook or at least with us he seems comfortable not doing so- different at Derby?

I dare say given time and patience Derby might have been better off under him than they have subsequently ended up but then again one game from glory in 2019.

Interested in why the arrangement came to such a quick end and did he deserve more time?

The appointment seemed to make sense at the time. Wassall was previously caretaker manager and despite having a decent record displayed a lot of inexperience as first team managers, and some experienced players (Shackell) looked down on him. Pearson came in to take a no nonsense approach.

Thing is, he took a very good 433 side and tried to make 442 work. Loaned Martin out to Fulham and splashed £12m on Vydra and Anya (when we had 6 wingers on the books already - Weimann, Ince, Russell, Bennett, Blackman, Camara). Then opted to play Butterfield on the wing.

The football was awful, the performances were awful, the results were awful... if the meeting with MM didn't go the way it did, he would have been sacked soon enough anyway. Fron the comments at the time, I picture Pearson diving across the desk in Mel's office...

3 hours ago, chinapig said:

Interesting thanks. Do you have a link to a source for that?

If so I can see the process getting a tad complicated. Does the EFL even have the capacity to verify claims for instance?

Private email. The EFL don't have the capacity to check reports at all, nevermind 'minor' details.

2 hours ago, Mr Popodopolous said:

Thanks. Why the EFL didn't put that in their initial statement is difficult to fathom. It's quite a key item!

Definitely. Would have saved a lot of uproar and wouldn't reflect as badly on the EFL.

2 hours ago, Mr Popodopolous said:

I assume and hope the it would rule out something like the £30m Stoke thing but I've always said, the following seems fair:

*Gate Receipts

*ST Revenue

*Commercial Revenue- matchday

*Commercial Revenue- non matchday

*Possibly Corporate revenue

*TV Revenue written back (ie rebates).

*For those who could, the costs of not utilising furlough.

Could easily define what is allowable. Even if that was as basic as the difference in match and commercial income compared with 18/19.

2 hours ago, Mr Popodopolous said:

Read an interesting post on Dcfcfans, I don't agree on Impairment vs amortisation of Villa in 2015/16, Derby could legitimately have Impaired Player Registrations through P&L at any time but counted in full towards P&S. They accounted for it in the usual way, see also Stoke in 2017/18.

I think that argument is against Parry's "every club uses straight-line' comment.

@Mr Popodopolous @Davefevs

According to Parry, clubs can apply for a larger Covid allowance. £5m is just the maximum which  goes "without verification".

4 hours ago, Mr Popodopolous said:

I'm unsure about the argument that Derby were stitched up.

Because we don't know what the Sevco 5112 aggregated losses for those two years were ie before Covid allowances. For all we know, there might have been some Covid allowance in there up to £5m in 2 years. As I have posted elsewhere, Derby claimed £20m losses in the Covid period attributed to Covid.

For all we know, maybe they are setting the limits for everyone else at the limits that Derby and Reading were allowed.

That's kind if the issue here. If £5m was the figure set, there's still a significant amount of income lost due to Covid that isn't accounted for. £9m match receipts in a normal season, resulting in a minimum of £2m deficit in the P&S calculations. Coincidentally, that would have been enough to avoid a penalty in the 2021 period.

4 hours ago, Mr Popodopolous said:

Because as we know before any amortisation adjustment, Sevco 5112 made an operating loss of £46m (£38-39m with usual P&S allowances) was it in 2017/18. Granted amortisation increasing earlier means it decreases later but the stitch up idea is suspect at this stage certainly IMO.

Can work backwards using your amortisation schedules under different methods that you have posted in the past but I'm unconvinced by the stitch up claim.

We've debated before on which accounts to be used too but IDC 1 showed the Sevco 5112 as the standard so that is it I believe. The consolidated seem like the sensible choice, possibly even Gellaw Newco 203?

It doesn't matter which accounts us common folk use to play around with the numbers as long as the correct additions/deductions are made to get a reliable estimate. P&S calculations will have been using the ultimate parent company though.

6 minutes ago, BTRFTG said:

Thanks, were the full accounts disclosed?

Not yet

2 hours ago, BTRFTG said:

How do you know this when the last accounts openly published were for the year ending 2018 and elements of those were called into question?

Are you privy to the revised accounts supposedly filed with the EFL at the end of January or like the Gibson accord is that not subject to public scrutiny?

The EFL kindly shared the figures...

Nixon has kindly shed a bit of light on the 2021 overspend too...

Translated into English: "the breakdown of the 9 points was never worked out, so no-one will ever know if the deduction for the 2021 period was 1, 2,3 or more points out of the total 9."
Proportionally, it would be 2 points.

29 minutes ago, Tafkarmlf said:

Ooh, cheers. 

Just re read the EFL statement 

As a result of a number of Clubs highlighting that the pandemic continues to have an adverse financial effect despite a return to full capacity stadiums, Clubs have opted to reintroduce COVID add backs into the P&S calculation for season 2021/22.  The impact is that Clubs will be able to claim lost revenues or exceptional costs directly relating to the pandemic up to a value of £2.5m for the reporting period 2021/22. Clubs can claim up to £5m for seasons 2019/20 and 2020/21.

The Covid add backs read from that they can be put in in this seasons accounts. 

To me it still seems we can claim 12.5 million from that wording in this seasons accounts. 

I'm also not seeing the added together and halved in calculations on P&S  1.10 onwards on the EFL site makes no reference to it https://www.efl.com/-more/governance/efl-rules--regulations/efl-regulations/appendix-5-financial-fair-play-regulations/

But if you can show me where that is would be most appreciated. 

 

Players, ok that's on me. 

 

For P&S calculations,19/20 and 20/21 P&S losses are averaged. 

P&S for to 4 years to 2022 = 18/19 + (19/20 + 20/21)/2 + 21/22
The max allowance applied for the 2022 period is therefore... 0 + (5+5)/2 + 2.5 = 7.5

12 hours ago, Mr Popodopolous said:

On a side note, Page 804 and beyond of the Administration thread on Dcfcfans worth a look- fuming!!

They are speculating about legal action, points back- 2 or 3 points is the ballpark figure I am seeing. Suggesting that this £5m allowance is to let us, Middlesbrough, Stoke and likely more off the hook!

I think that's a misunderstanding of how the new rule is implemented. The instinctive reaction of a few is that it's an additional £5m allowance in 19/20 and 20/21 which didn't apply previously when the penalty was applied. 

The reality is the £5m cap is the reason we failed the 2021 period by £1.96m. I understand why they decided on a cap as it prevents clubs like Stoke included a massive chunk due to Covid impairment. However, I'm surprised they didn't come up with a basic rule to only allow match receipts and commercial losses. In our case, that's at least £13m and a net £4m impact on the 2021 period. The difference being a failed 2021 period or not (18% of our points deduction), and a Wycombe claim disappearing.

There is no logic to a max £5m allowance.

On 14/02/2022 at 13:43, Mr Popodopolous said:

Birmingham got 7 for the overspend, 3 for losses rising year on year and 1 back for cooperation.

Sheffield Wednesday even if halved due to stadium bungling on all sides issue, dunno why they didn't get the extra 3 for losses rising successively.

Reading would have got 12 for the overspend, 1 back if lucky for cooperation and then 1 or 2 more docked perhaps for the trajectory of losses.

17 points would be the starting point breach wise for Derby, I think the Panel who found Derby guilty wouldn't have reduced it by much. There isn't much mitigation.

If the stadium goes back to the club then I expect the EFL and other clubs to object. Stadium Group needs keeping separate for FFP purposes for some time, ie go to new owner yes, reconsolidated not yet.

Disagree on "isn't much mitigation".

Relevance of which company owns the stadium? The same fee would be paid one way or another so it doesn't matter at all.

On 14/02/2022 at 15:50, Davefevs said:

But less than 6 figure, means less than £100k???

Wycombe's case was/is exceptionally weak. In simple terms, they disagreed with the EFL's processes.
This'll just be paying their legal fees so far.

On 14/02/2022 at 16:35, BTRFTG said:

Indeed it is, though with amortization Derby clearly thought otherwise.

So if any deal has to be conditional on the new buyer getting their hands on the stadium might it be the case Derby would incur further penalties for understating the quantum of their losses for which they've already been punished?

No

On 14/02/2022 at 19:12, Mr Popodopolous said:

A couple of observations, thoughts etc.

@Hxj

1) Could a drastically cheaper return of the stadium to Derby not constitute new evidence for the EFL. Derby defended the valuation in September 2019, at the IDC and indeed in the accounts for Gellaw Newco 202 to June 2020.

The period that this could most easily materially change would be the 3 years to 2018 (principle of reset, presumably included the Stadium sale, £28.12m 3 year loss means pass).

2) Failing that, the small matter of a Fair Rent applicable to a Fair Value. £4.16m per season/year as per the company who did the valuation- which leads me to my 3rd and final point...

3)...As we have discussed before, the importance of keeping the Stadium Group and the FFP/Club Group separate for FFP purposes- do that and a Fair Value Rent can be thrashed out. Benchmark using other clubs and their % yield etc.

A reconsolidation is not acceptable so soon.

£81.1m had to be proven to be of fair value. Any transfer of stadium to a new club owner would not have to pay fair value.

On 14/02/2022 at 15:03, sh1t_ref_again said:

If MM is going to exit with nothing back from the stadium, why does not not come out now and say, that he is giving the stadium back as part of the deal. Or maybe he is still hoping to generate some income back from it, although I guess by having a lone secured against it that he / Derby have pocketed, as the loan will have to be paid off by the new owners to be able to gain access to the ground

If he wanted money for it he'd be charging rent. £0 paid or requested since entering admin...

On 13/02/2022 at 10:05, Davefevs said:

Why didn’t EFL punish both Derby and Reading with the right number of points…in line with the scale introduced when Brum got theirs?  In Derby’s case I think they could’ve got some of the “taking the piss” 9 points available too.

If it went to DC/LAP, there wouldn't be any "taking the piss" points, as evidenced by the previous decision documents. If anything, they would give reductions for various issues - "acting in good faith", delay between the infringement and charge/penalty, inability to act upon overspend to reduce losses which could have resulted in a lower penalty or even no penalty at all, etc...
Reading, I think would only get a small reduction in penalty for owning up to the infringement (as per BCFC), but may also get an additional point for losses in the final year exceeding previous years.

23 hours ago, sh1t_ref_again said:

Its MM that anoys me the most, my understanding is, Morris sells the ground to himself on paper to try and fudge FFP, does not pay funds due to HMRC therefore having to put less money into Derby to prop them up and cover losses, then when it starts getting messy puts club into admin so does not have to put any more money in. Now owns the ground and will use a tool to get money back out of new owner to again reduce his own losses that he built up for his failed gamble.

Correct me if I am wrong.

Mel will get nothing for the stadium. PB gives MSD the money owed for the loan(s), and the stadium is given to the new owner / club.

On 11/02/2022 at 16:39, Mr Popodopolous said:

Very good point, although I do believe the costs of exceptional litigation can be excluded from P&S- would these claims fall under this category had Derby themselves paid up?

Yes

21 hours ago, Mr Popodopolous said:

Saw some interesting snippets on Derby forum.

Even with the Derby amortisation method being upheld, a poster whose financial views I rate a lot reckons all things being equal ie no major player sales they would have failed by £20.5m to 2021.

The agreed decision seems fair, although I do wonder if there might have been an amortisation overhang ie still more to amortise to this season and maybe next which might have challenged Derby in meeting the reset £13m target.

It's all history now anyway that side of it.

To be honest, I imagine it would have been much lower than that. I think we all know Derby would have lumped as much under 'Covid impairment' as possible.

There's only Lawrence, Bielik and Jozwiak left who were bought for anything above a nominal fee. Based on their contract lengths remaining we'd have been slightly better off in terms of P&S for the two P&S periods you refer to. The period after those though would have been quite a bit worse (3 years to 2024)

On 05/02/2022 at 08:37, BTRFTG said:

Signally, Morris' ramblings would better able to be scrutinized had his companies published unimpaired accounts - oh the irony. 

I may not know much about anything but as an ex Estates Director I do know a bit about property asset valuation, including bespoke assets. As with his reference to amortization it strikes me Morris fails to appreciate the problem isn't that there are options available for valuation, rather that when one picks an option one should stick to it.

Think of it like this. A football stadium is a a large, capital hungry, expensive to maintain and largely underutilized structure. It serves primarily to facilitate business income for its occupant. That's why it makes sense to split such entities and why you don't see estate agents in your High Street regularly flogging them, there being few buyers. So how much is a stadium worth? 

If you're an investor not owing a football club the answer would be a measure of how much income might be generated each year by the facility? Rent from the football club, income from other events, conferencing, hospitality, advertising et al. When questioned about Derby's valuation, assuming an income based valuation, Morris gave an odd and contradictory answer. On one hand he reminded football affords only 30 days income, that fitting in events around football is problematic, that with very high overheads such events make nowhere near as much money as folks imagine. On the other he said  he'd researched a solution to show Derby could deliver 100 such events each year delivering £12m of non-football related income. Impressive. Now were I a potential buyer my first thoughts would be why's Morris selling this cash cow and please may I see the books to show actually how much income has historically been generated? Accounts being problematic Morris opts for another valuation option, one most normal folks wouldn't adopt when assessing value.

Morris adopts a perfectly acceptable option, it's called Depreciated Replacement Cost (DRC) and in simple terms asks how much would I have to spend to replace the functionality of what's already there? This works fine provided you also accept the caveats associated with its methodology (that's the bit with which Morris has a problem.) It's useful for insurance purposes but unlike housing (where there's always demand,) never produces a value higher than its actual cost of replacement. It's the reverse of something some of you will have encountered when taking out buildings insurance on your home - why's the insured value less than I paid for it? It's a theoretical value, one unlikely to be used. It's not a value you'd achieve if selling on the open market. Morris argued it would cost £81m to replace Pride Park. Perhaps he's right, but the question would be why would you ever do that? That's the problem with his rationale, he's picks and chooses to suit.

In the near future he may well be looking at need of a third method of valuation, that of Residual Land Value and I can tell him for nothing that'll be low single digits.

Now, if only Morris had explained how, under Derby's employ, Tom Ince's mother became the highest paid scout in British football despite her knowing little about football....

Still on about the stadium? The sale price was proven to be fair and the decision wasn't even appealed by the EFL. Move on.

18 hours ago, Monkeh said:

He got dispensation to cover for a injury, that expired and wasn't renewed as the player was no longer injured

As a Derby fan you should know that,

No amount of crying is going to change the fact you cheated got caught strang it our and now facing your conquences 

Fully justified fully deserved,

Pay the hmrc in full before crying that you are hard done by

Crying? Read back and you'll see that I agreed with Mr Pop that we shouldn't have been able to 'keep' Plange based on the fact we couldn't keep Jagielka.

Special dispensation was granted because it took us above the allowable squad size limit - Jagielka and Baldock taking us to 25. Baldock's contract wasn't renewed, and Marshall join QPR on a free. Extending Jagielka's contract should have been allowed as the squad size was kept to 23 and he would have been on the same wage as before (within the terms agreed with the EFL).

Someone suggested Plange staying may have been allowed due to going below a squad size of 16, which doesn't appear to be the case.

5 hours ago, Mr Popodopolous said:

Although a poster on here did mention the minimum squard limit so perhaps it's fine in those circs. If a precise rule is out there online it'd be useful.

Based on which metric? I would refer to the EFL's embargo rules page but it states there that existing players can have their contracts extended during an embargo - clearly not the case with Jagielka.

Over 21s - 11, so why couldn't Jagielka extend his deal as well?

At least 3 starts - 18. Isn't the minimum 16?

Established player (over 21 and 5 starts) - 11, again why not Jagielka?