The Championship FFP Thread (Merged)

[Mr Popodopolous]

5 minutes ago, downendcity said:

What is most abysmal is that the EFL, after introducing new rules and penalties with a fanfare, now seem to be impotent when it comes to applying them. It's this impotence that is allowing some clubs to flout the rules with apparent impunity, while the clubs that are complying are being made to look like naive fools.

I do think it needs those "naive fools" to do something about it, otherwise I can see ffp continuing in the same vein, other than more and more clubs will take a lead from  the likes of Derby and Villa on the basis if it's good enough for them then it's good enough for us.

Absolutely. 

The funny- yet depressing- thing about it is the clubs who do comply, who try to comply- outnumber vastly those who do not! Impotence and incompetence I feel- Mark Ashton as head instead of Shaun Harvey and I think we would see a different scenario in terms of implementation.

Quote

 

 EFL Regulation 3.4 in Section 2 – Membership:

“In all matters and transactions relating to The League each Club shall behave towards each other Club and The League with the utmost good faith. Further, each Club shall deliver to the League a copy of the Club Charter signed by the appropriate Relevant Person for and on behalf of the Club. The League shall be entitled to publish the Club Charter.”

 

That good faith rule in full. I wonder if this could be the basis for a legal fightback.

I agree with suing the EFL in principle- the problem I see with it is, what is the EFL's income? The potential losses or the revenue needlessly gained from transfers would far outweigh this I'd have thought.

Edited May 22, 2019 by Mr Popodopolous

[downendcity]

2 minutes ago, milo1111 said:

All of this is quite sickening. The whole situation is going to end up in a legal battle. The ELF have brought this on themselves by pandering to the cheats for fear of being sued.

This is what I fail to understand.

The championship operates under the auspices of the EFL. The EFL set the rules of said competition, which include the ffp rules, and all clubs competing in the championship do so in full knowledge of those rules and in so doing, I can only assume they accept those rules and agree to abide by them.

This being the case, I cannot fathom on what basis  any club could then  take legal action if the EFL then took action against the club if the club broke any of  those rules and the EFL applied one of the stated penalties for that breach?

A case of talking the talk ..................

[Wrongagain]

No point of any kind of lawsuit!  If the clubs are taking advantage of a legal loophole they are not breaking any rule or law. 

Best and only thing is for the EFL to act quickly and prevent any more clubs taking advantage.

[Mr Popodopolous]

7 minutes ago, dave36 said:

No point of any kind of lawsuit!  If the clubs are taking advantage of a legal loophole they are not breaking any rule or law. 

Best and only thing is for the EFL to act quickly and prevent any more clubs taking advantage.

Not treating the EFL or acting in a manner that treats the EFL with "good faith" however- let alone the competition.

However yes, in practical terms closing the loophole- something that should've been done already- is a good first step.

Do not forget though why we sold Flint, Bryan and Reid last summer! Or why Middlesbrough sold Gibson, Traore, Bamford!

Edited May 22, 2019 by Mr Popodopolous

[Lrrr]

2 hours ago, Mr Popodopolous said:

Like a class action, joint lawsuit?

I really think clubs complying should go for this, clubs who have made sacrifices- perhaps clubs suing each other not ideal you're right, but it would in some respects be richly deserved.

So far I believe you can put us, Middlesbrough, Leeds and Nottingham Forest into the possibles for any sort of legal action- there are probably a lot more who try to comply than don't as well. Birmingham got punished- embargo and points over a period, you can add them. They didn't try to sell their ground etc!

On that note...

Sounds like Aston Villa might be gearing up for similar- EFL should have closed this loophole as soon as Derby did it.

Time for Lansdown to write a £200m cheque and basically threaten the EFL with close the loophole or he does the same as other clubs but for a huge amount....

Edited May 22, 2019 by hodge

[Mr Popodopolous]

3 minutes ago, hodge said:

Time for Lansdown to write a £200m cheque and basically threaten the EFL with close the loophole or he does the same as other clubs but for a huge amount....

We'd need AG independently valued- but yes maybe we should!

It's too late to stop Derby and possibly Sheffield Wednesday- maybe even Aston Villa, so maybe we should dependent on the ground and ownership structure do something similar. 

[Lrrr]

8 minutes ago, Mr Popodopolous said:

We'd need AG independently valued- but yes maybe we should!

It's too late to stop Derby and possibly Sheffield Wednesday- maybe even Aston Villa, so maybe we should dependent on the ground and ownership structure do something similar. 

Wait was Pride Park independently valued at £80m?

[Mr Popodopolous]

23 minutes ago, hodge said:

Wait was Pride Park independently valued at £80m?

So I've read apparently...which is just laughable! Worthy of laughs and unicorns- doubt it reflected its true valuation- EFL should have got their own independent valuer or surveyor in there and subtracted the profit- more likely "profit" from the figures for FFP purposes.

Same for Hillsborough and if one site to be believed, potentially Villa Park. Genuinely struggle to work out how it is legitimately valued at that however- £80m?? A 2013 valuation showed it at £20-21m, and then there were reports of £41m- even if we accept the doubling to £41m owing to upgrades, property price rises or even simple undervaluation previously- doubtful but plausible- then it surely could not have doubled again!

Would it be possible I wonder for retrospective action given how many clubs quite clearly object to this- to punish the losers of playoff final- if indeed Aston Villa have, and Derby if not and of course if Sheffield Wednesday have used this, them too? If put to a vote of Championship clubs, well I bet more would consider that to be the way to go than wouldn't!

Edited May 22, 2019 by Mr Popodopolous

[downendcity]

9 minutes ago, hodge said:

Wait was Pride Park independently valued at £80m?

By Purple Bricks?

[Lrrr]

41 minutes ago, Mr Popodopolous said:

So I've read apparently...which is just laughable! Worthy of laughs and unicorns- doubt it reflected its true valuation- EFL should have got their own independent valuer or surveyor in there and subtracted the profit- more likely "profit" from the figures for FFP purposes.

Same for Hillsborough and if one site to be believed, potentially Villa Park. Genuinely struggle to work out how it is legitimately valued at that however- £80m?? A 2013 valuation showed it at £20-21m, and then there were reports of £41m- even if we accept the doubling to £41m owing to upgrades, property price rises or even simple undervaluation previously- doubtful but plausible- then it surely could not have doubled again!

Would it be possible I wonder for retrospective action given how many clubs quite clearly object to this- to punish the losers of playoff final- if indeed Aston Villa have, and Derby if not and of course if Sheffield Wednesday have used this, them too? If put to a vote of Championship clubs, well I bet more would consider that to be the way to go than wouldn't!

Just need to find the same guys and get them to value AG a lot higher, I'm sure we can blag it on the basis of being on land near the centre of Bristol, the non matchday revenue it brings, multiple sports being played there etc 

[downendcity]

49 minutes ago, hodge said:

Just need to find the same guys and get them to value AG a lot higher, I'm sure we can blag it on the basis of being on land near the centre of Bristol, the non matchday revenue it brings, multiple sports being played there etc 

Close to a village green - location, location, location!

[Drew Peacock]

Has anybody emailed Mark Ashton to ask him what he is doing about all of this as an EFL board member?

[downendcity]

56 minutes ago, Drew Peacock said:

Has anybody emailed Mark Ashton to ask him what he is doing about all of this as an EFL board member?

Hopefully Steve Lansdown has.

[Mr Popodopolous]

2 hours ago, hodge said:

Just need to find the same guys and get them to value AG a lot higher, I'm sure we can blag it on the basis of being on land near the centre of Bristol, the non matchday revenue it brings, multiple sports being played there etc 

Should be tbh.

Pride Park also brings non matchday revenue and has conferencing facilities- a lot of grounds do now- but AG redevelopment is much more modern, location- both in terms of near centre and Bristol being a lot more desirable than Derby, multiple sports as you say- many reasons.

Edited May 22, 2019 by Mr Popodopolous

[downendcity]

1 minute ago, Mr Popodopolous said:

Should be tbh.

Pride Park also brings non matchday revenue, but AG redevelopment is much more modern, location- both in terms of near centre and Bristol being a lot more desirable than Derby, multiple sports as you say- many reasons.

Ah, but think of the added value you get when you are Frank Lampard's Derby County!

[cidered abroad]

7 hours ago, Mr Popodopolous said:

Like a class action, joint lawsuit?

I really think clubs complying should go for this, clubs who have made sacrifices- perhaps clubs suing each other not ideal you're right, but it would in some respects be richly deserved.

So far I believe you can put us, Middlesbrough, Leeds and Nottingham Forest into the possibles for any sort of legal action- there are probably a lot more who try to comply than don't as well. Birmingham got punished- embargo and points over a period, you can add them. They didn't try to sell their ground etc!

On that note...

Sounds like Aston Villa might be gearing up for similar- EFL should have closed this loophole as soon as Derby did it.

That could be a case of separating the football club from the stadium. Like we did many years ago.

Not sticking up for Villa, by the way but it could be totally innocent.

[awbb]

I would think it would be fought against but since spending money on infrastructure does not count against FFP then the EFL could say the release of capital from the sale of such an ‘infrastructure’ asset, such as a stadium, or training ground would not count either.

[Mr Popodopolous]

3 hours ago, cidered abroad said:

That could be a case of separating the football club from the stadium. Like we did many years ago.

Not sticking up for Villa, by the way but it could be totally innocent.

Maybe.

Still even if it is, any profit or revenue from doing that shouldn't count however.

1 hour ago, awbb said:

I would think it would be fought against but since spending money on infrastructure does not count against FFP then the EFL could say the release of capital from the sale of such an ‘infrastructure’ asset, such as a stadium, or training ground would not count either.

I agree. Wondered it myself, perhaps that's a line, a legal.argument that MA, SL and other chairmen etc who are furious about this should pursue!

Unsure the provisions would allow for it, but one thing that might be acceptable is the profit on transactions suck as this being disallowed- £14m profit becomes a £39m loss in Derby's case!

[downendcity]

35 minutes ago, Mr Popodopolous said:

Maybe.

Still even if it is, any profit or revenue from doing that shouldn't count however.

I agree. Wondered it myself, perhaps that's a line, a legal.argument that MA, SL and other chairmen etc who are furious about this should pursue!

Unsure the provisions would allow for it, but one thing that might be acceptable is the profit on transactions suck as this being disallowed- £14m profit becomes a £39m loss in Derby's case!

An owner would not be allowed to "invest" £20m into a club in order to head off ffp issues.

However, taking the example to a perhaps ridiculous degree ( although with the EFL and ffp who knows where ridiculous ends?), that owner could invest in a new stand costing, say, £20m. Once completed, using the Derby approach,  he could then "sell" the stadium to another of his companies for, let's say for convenience,  £20m.

The real money invested in the build would be ignored for ffp purposes, but the £20m "paper" money proceeds of the stadium sale is allowable income for ffp purposes.

The time scale would make it difficult for it to be used in reality as a way around ffp problems, in the way Derby's owner has done, but it shows the principle, which is the ffp equivalent of money laundering.

 

[chinapig]

18 hours ago, downendcity said:

Clubs suing other clubs could be a recipe for disaster, as it could lead to clubs looking for legal ways to "bring down" rivals. You only have to look at the acrimony ( albeit relatively brief) created when SL was trying to garner support for Leeds to be docked points for spygate.

Would it be possible for clubs to sue the EFL under the same "good faith" clause and on the back of the EFL failing to apply their own rules regarding ffp? I would have thought this would be a far better corse of action and it would carry much more weight if a number of disaffected clubs were involved in such action. It is often suggested that the reason the EFL are not  enforcing ffp punishments against "big" clubs like Villa and Derby is for fear of being dragged into legal action by clubs like this if they did attempt to deny them promotion.

Legal action being brought by one club for the EFL doing their job is one thing. The threat of legal action by a number of clubs against the EFL for failing to do their job and carry out thrown rules would surely be of greater concern.

 

 

The problem there is that the EFL is a trade association not a governing body. This is in a sense an offshoot of the FA ceding its power to the Premier League, meaning there is in many respects no governing body.

A trade association is likely to be dominated by its most powerful members - witness the richest PL clubs getting a bigger share of the TV money from next season for instance. Which means that the most powerful members are more likely to get away with gaming the system.

Woe betide smaller clubs that step out of line though, they will be made an example of so the EFL can claim that FFP works.

[Mr Popodopolous]

7 hours ago, chinapig said:

The problem there is that the EFL is a trade association not a governing body. This is in a sense an offshoot of the FA ceding its power to the Premier League, meaning there is in many respects no governing body.

A trade association is likely to be dominated by its most powerful members - witness the richest PL clubs getting a bigger share of the TV money from next season for instance. Which means that the most powerful members are more likely to get away with gaming the system.

 Woe betide smaller clubs that step out of line though, they will be made an example of so the EFL can claim that FFP works.

I think there must be some sort of law about abuse of a dominant position in a trade association, however yes FA ceding power to PL absolutely started this ball rolling- agree on that. On the dominant position thing, if they have it- there is an onus on them not to abuse it and I am sure it can be tested in the courts, be they here or elsewhere.

That is where CAS could come in. AC Milan got their ban from EL overturned- okay hardly a small club, a huge one in fact- because they went to the CAS and were able to prove or at least have the onus on UEFA to prove that they were not being singled out- UEFA nearly had to produce the accounts for Inter Milan, Man City and PSG- oddly enough they did not wish to do this and went away to reconsider! I suggest Birmingham take a case there for a start.

As you say richer clubs getting a greater share of TV money - one reason maybe the threat of a European super League. EU Law may well thwart that. Now we won't be in the EU sooner rather than later, but for a European Super League many nations would be and I could see potential of it being blocked- in practical terms though I don't know how!

As for Derby, very rough calculations- and basic sums.

Did a quick calculation though, doubtless much more to it- but Pride Park and site is about 180 acres- so in DE24 i.e. the fringes of Derby, Pride Park and surrounds are worth £450,555.55 (approx) per acre! Which I consider to be a load of crap...it surely is! Think somewhere between £20-40m fair, market value most likely.

@Coppello

Any thoughts on that? Acreage to price paid- £450,555.55 (approx) per acre is surely one hell of an uptick!? 

Edited May 23, 2019 by Mr Popodopolous

[Guest]

26 minutes ago, Mr Popodopolous said:

I think there must be some sort of law about abuse of a dominant position in a trade association, however yes FA ceding power to PL absolutely started this ball rolling- agree on that. On the dominant position thing, if they have it- there is an onus on them not to abuse it and I am sure it can be tested in the courts, be they here or elsewhere.

That is where CAS could come in. AC Milan got their ban from EL overturned- okay hardly a small club, a huge one in fact- because they went to the CAS and were able to prove or at least have the onus on UEFA to prove that they were not being singled out- UEFA nearly had to produce the accounts for Inter Milan, Man City and PSG- oddly enough they did not wish to do this and went away to reconsider! I suggest Birmingham take a case there for a start.

As you say richer clubs getting a greater share of TV money - one reason maybe the threat of a European super League. EU Law may well thwart that. Now we won't be in the EU sooner rather than later, but for a European Super League many nations would be and I could see potential of it being blocked- in practical terms though I don't know how!

As for Derby, very rough calculations- and basic sums.

Did a quick calculation though, doubtless much more to it- but Pride Park and site is about 180 acres- so in DE24 i.e. the fringes of Derby, Pride Park and surrounds are worth £450,555.55 (approx) per acre! Which I consider to be a load of crap...it surely is! Think somewhere between £20-40m fair, market value most likely.

@Coppello

Any thoughts on that? Acreage to price paid- £450,555.55 (approx) per acre is surely one hell of an uptick!? 

If I was a betting man, and it's a hunch, I think Derby have found that they could inject some cash into the club by selling the stadium to a property investment company and paying a sizeable annual rent back to the landlord to justify the price paid/sold - a sale and leaseback. This gave them a stay of execution and left the EFL stumped. 

[Mr Popodopolous]

25 minutes ago, 29AR said:

If I was a betting man, and it's a hunch, I think Derby have found that they could inject some cash into the club by selling the stadium to a property investment company and paying a sizeable annual rent back to the landlord to justify the price paid/sold - a sale and leaseback. This gave them a stay of execution and left the EFL stumped. 

Interesting.

A third party then, enticed by the prospect of large annual rent?

If it's to a third party and a bona-fide third party at that...that changes the equation significantly. Hope Pride Park doesn't get sold off for student flats then- or a concert every weekend! 

It's sold to a company linked to Mel Morris the owner though, so I don't see how fair value couldn't be applied here- arms length transactions, related parties- definitely a stay of execution but there are rules about related party transactions in FFP, are there not? It was sold by Derby to a company owned by Mel Morris- presumably he owned the ground in any case.

Independent valuer doubles the valuation- which in turn was doubled from 2013! Absolutely laughable to believe it's legit.

Edited May 23, 2019 by Mr Popodopolous

[Guest]

17 minutes ago, Mr Popodopolous said:

Interesting.

A third party then, enticed by large annual rent?

If it's to a third party and a bona-fide third party at that...that changes the equation significantly. Hope Pride Park doesn't get sold off for student flats then- or a concert every weekend! 

It's sold to a company linked to Mel Morris the owner though, so I don't see how fair value couldn't be applied here- arms length transactions, related parties- definitely a stay of execution but there are rules about related party transactions in FFP, are there not? It was sold by Derby to a company owned by Mel Morris- presumably he owned the ground in any case.

Independent valuer doubles the valuation- which in turn was doubled from 2013! Absolutely laughable to believe it's legit.

The difficulty with valuing a stadium - and indeed challenging a valuation - is there isn't a market for them. It gives an 'independent' valuer a lot of free reign.

Doubled from 2013 to 2019... I reckon I could make a good fist at arguing why. When the economy grows what happens at every rent review if you lease your house? Your landlord puts your rent up.

Look at how revenues are inflated now in football from 2013: ticket prices on the up, transfer market unrecognisable, prize money way on the up, sponsorship way on the up... it would only be normal for a landlord to increase rents, exorbitantly, and in turn increasing asset value, exorbitantly.  Make hay after all. 

It's one thing to consider the acreage value, but then add the premium that this is a ready made stadium for a football team, can be used 365 days a year for conferencing, concerts, blah blah blah. 

Don't get me wrong, I think the whole situation stinks, but I think they've been one step ahead of the EFL in all likelihood and I think you'd be hard pressed to argue the fair value. 

Edited May 23, 2019 by Guest

[Mr Popodopolous]

18 minutes ago, 29AR said:

The difficulty with valuing a stadium - and indeed challenging a valuation - is there isn't a market for them. It gives an 'independent' valuer a lot of free reign.

Doubled from 2013 to 2019... I reckon I could make a good fist at arguing why. When the economy grows what happens at every rent review if you lease your house? Your landlord puts your rent up.

Look at how revenues are inflated now in football from 2013: ticket prices on the up, transfer market unrecognisable, prize money way on the up, sponsorship way on the up... it would only be normal for a landlord to increase rents. 

It's one thing to consider the acreage value, but then add the premium that this is a ready made stadium for a football team, can be used 365 days a year for conferencing, concerts, blah blah blah. 

Don't get me wrong, I think the whole situation stinks, but I think they've been one step ahead of the EFL in all likelihood and I think you'd be hard pressed to argue the fair value. 

Doubled and doubled again- I think doubled since 2013 is fair enough, that has likely happened- prospect of redevelopment. 

Was listed in accounts as £20m as per a 2013 valuation. Doubled I can buy...doubled again? Nah. Landlord puts rent up very true.

Arguably they don't utilise it enough- this is a good point. Would push valuation up.

Yeah, true.

Depends which fair value though- £20m to £40m or so, or the doubling of that which yielded the profit. 2013 it was worth £20m or so, then it said the profit was basically £39m- which is a total sale of £81.1m, nearly double that 41m.

One solution might be to have EFL  appoint the independent valuer. We go with their verdict as the final word. If you don't like it? Then off you **** out the League!

That nuclear option aside, this should not have been signed off- as per their own regulations.

Given albeit through a different company he owns the club- how on earth was the "profit" signed off??

Edited May 23, 2019 by Mr Popodopolous

[downendcity]

45 minutes ago, 29AR said:

If I was a betting man, and it's a hunch, I think Derby have found that they could inject some cash into the club by selling the stadium to a property investment company and paying a sizeable annual rent back to the landlord to justify the price paid/sold - a sale and leaseback. This gave them a stay of execution and left the EFL stumped. 

 

36 minutes ago, Mr Popodopolous said:

Interesting.

A third party then, enticed by the prospect of large annual rent?

If it's to a third party and a bona-fide third party at that...that changes the equation significantly. Hope Pride Park doesn't get sold off for student flats then- or a concert every weekend! 

It's sold to a company linked to Mel Morris the owner though, so I don't see how fair value couldn't be applied here- arms length transactions, related parties- definitely a stay of execution but there are rules about related party transactions in FFP, are there not? It was sold by Derby to a company owned by Mel Morris- presumably he owned the ground in any case.

Independent valuer doubles the valuation- which in turn was doubled from 2013! Absolutely laughable to believe it's legit.

 

20 minutes ago, 29AR said:

The difficulty with valuing a stadium - and indeed challenging a valuation - is there isn't a market for them. It gives an 'independent' valuer a lot of free reign.

Doubled from 2013 to 2019... I reckon I could make a good fist at arguing why. When the economy grows what happens at every rent review if you lease your house? Your landlord puts your rent up.

Look at how revenues are inflated now in football from 2013: ticket prices on the up, transfer market unrecognisable, prize money way on the up, sponsorship way on the up... it would only be normal for a landlord to increase rents, exorbitantly, and in turn increasing asset value, exorbitantly.  Make hay after all. 

It's one thing to consider the acreage value, but then add the premium that this is a ready made stadium for a football team, can be used 365 days a year for conferencing, concerts, blah blah blah. 

Don't get me wrong, I think the whole situation stinks, but I think they've been one step ahead of the EFL in all likelihood and I think you'd be hard pressed to argue the fair value. 

 

14 minutes ago, Mr Popodopolous said:

Doubled and doubled again- I think doubled since 2013 is fair enough, that has likely happened- prospect of redevelopment. 

Was listed in accounts as £20m as per a 2013 valuation. Doubled I can buy...doubled again? Nah. Landlord puts rent up very true.

Arguably they don't utilise it enough- this is a good point. Would push valuation up.

Yeah, true.

Depends which fair value though- £20m to £40m or so, or the doubling of that which yielded the profit. 2013 it was worth £20m or so, then it said the profit was basically £39m- which is a total sale of £81.1m, nearly double that 41m.

One solution might be to have EFL  appoint the independent valuer. We go with their verdict as the final word. If you don't like it? Then off you **** out the League!

Cutting to the chase, we all know that this was a convoluted transaction with one purpose - to enable the club to avoid problems with ffp.

The nature of the transaction, i.e. the Derby owner  "selling" to another of his companies, meant that it could go through and complete quickly, which was essential if the "sale proceeds" were to be available to include in the accounts as income.

Because it is a paper transaction, i.e. not subject to the vagaries of an open market transaction, the so called valuation was always going to be what the Derby owner wanted/needed to achieve his chosen financial result.

The frustration is that we can all see it, but the EFL either can't, choose not to, or don't know how to deal with the issue. 

 

[Guest]

14 minutes ago, Mr Popodopolous said:

Doubled and doubled again- I think doubled since 2013 is fair enough, that has likely happened- prospect of redevelopment. 

Was listed in accounts as £20m as per a 2013 valuation. Doubled I can buy...doubled again? Nah. Landlord puts rent up very true.

Arguably they don't utilise it enough- this is a good point. Would push valuation up.

Yeah, true.

Depends which fair value though- £20m to £40m or so, or the doubling of that which yielded the profit. 2013 it was worth £20m or so, then it said the profit was basically £39m- which is a total sale of £81.1m, nearly double that 41m.

One solution might be to have EFL  appoint the independent valuer. We go with their verdict as the final word. If you don't like it? Then off you **** out the League!

That nuclear option aside, this should not have been signed off- as per their own regulations.

Given albeit through a different company he owns the club- how on earth was the "profit" signed off??

Yeah I'm only really playing devil's advocate. Another way of looking at it is how valuable is a football stadium without a football club to play in it? Given the FA I believe said won't allow relocation, well its the value of the land minus the demolition costs, plus development opportunity. So actually you could make an equally strong case its pretty limited in value. I guess the only real precedent to go by is what was Highbury worth relative to £/area when it was sold. 

This is why I think, if it is what my hunch is, Derby have stumped the EFL. The EFL will probably realise the person carrying out the valuation would have a reasonable basis for why they came up with that number, I imagine the auditors will take the valuation at face value when it appears in the financial statements because its backed up by an independent valuation, and if it was a reasonable rental yield, the tax man might be relaxed that they will get their money in reasonable time. If you want to challenge a chartered persons valuation with those parties not supporting it, I can't see a huge prospect of success. 

[Guest]

2 minutes ago, downendcity said:

 

 

 

Cutting to the chase, we all know that this was a convoluted transaction with one purpose - to enable the club to avoid problems with ffp.

The nature of the transaction, i.e. the Derby owner  "selling" to another of his companies, meant that it could go through and complete quickly, which was essential if the "sale proceeds" were to be available to include in the accounts as income.

Because it is a paper transaction, i.e. not subject to the vagaries of an open market transaction, the so called valuation was always going to be what the Derby owner wanted/needed to achieve his chosen financial result.

The frustration is that we can all see it, but the EFL either can't, choose not to, or don't know how to deal with the issue. 

 

This I think. I expect the rules will be clarified about related party transactions, maybe even excluding them in full. 

[Mr Popodopolous]

16 minutes ago, downendcity said:

 

 

 

Cutting to the chase, we all know that this was a convoluted transaction with one purpose - to enable the club to avoid problems with ffp.

The nature of the transaction, i.e. the Derby owner  "selling" to another of his companies, meant that it could go through and complete quickly, which was essential if the "sale proceeds" were to be available to include in the accounts as income.

Because it is a paper transaction, i.e. not subject to the vagaries of an open market transaction, the so called valuation was always going to be what the Derby owner wanted/needed to achieve his chosen financial result.

The frustration is that we can all see it, but the EFL either can't, choose not to, or don't know how to deal with the issue. 

 

Well said!

I think the EFL should have had it independently valued- I can still accept it doubling to around £40m from £20m- that is hard to believe, but within the realms IMO.

Definitely a paper transaction- should these be allowed between related parties especially under FFP? Doubtful!

Bit of all 3 I imagine- that stuff posted by Coppello was very depressing reading about some finance offer from the EFL/

Should, could Mark Ashton have done more? It is a disgrace this- we have sold Flint, Bryan, Reid and now Kelly- partly to maximise value, partly as players being kept on the circs would remain but partly due to this. I think and clubs like us could have a real legal case here.

 

Quote

 

What is competition law?

Competition law aims to make sure businesses are competing on a level playing field and are protected from other businesses acting unfairly. Cartels, price-fixing, retail price maintenance, market sharing and abuse of dominant position are all examples of conduct that is prohibited by competition law.

The decisions of the Competition and Market Authority in the UK (previously the Office of Fair Trading) and the EU Commission show that anti-competitive behaviour happens across all sectors of the economy, with ordinary and vulnerable consumers potentially paying higher prices than they should.

Companies can be fined millions for breaching competition law. But fines do not compensate the individual consumers who have been overcharged.

How can my organisation bring a claim?

Competition law is unique in the English legal system as the only area of law allowing “class actions”. This is a new regime, introduced in October 2015 by the Consumer Rights Act 2015.

Class actions are brought by one representative, such as a charity, NGO or representative body. The representative need not be personally affected by the anti-competitive practice. What matters is that they can fairly and adequately act in the interests of individual class members. The Competition Appeal Tribunal must give permission for a class action to proceed.

Class action claims can be “opt-out”. This means that individual affected consumers do not need to bring a claim themselves. If the claim is successful, all those affected will automatically benefit. The Tribunal can make an aggregate award of damages covering all affected class members. Class members can then claim their individual compensation from the aggregate award, which could be in accordance with a formula.

Competition law was previously seen as too expensive and complex for individual consumers to bring claims. The class action regime aims to remove those barriers to justice, providing for the first time a real opportunity for UK consumers to obtain compensation and redress.

 

 

I believe clubs who have sold to comply should be due millions in compensation from the clubs who have breached- or the owners at least. I would say the EFL but I doubt they earn enough as a company so suing them seems fairly pointless.

 

Forget the consumer aspect but a lot of this could tick boxes IMO.

Edited May 23, 2019 by Mr Popodopolous

[Mr Popodopolous]

7 minutes ago, 29AR said:

Yeah I'm only really playing devil's advocate. Another way of looking at it is how valuable is a football stadium without a football club to play in it? Given the FA I believe said won't allow relocation, well its the value of the land minus the demolition costs, plus development opportunity. So actually you could make an equally strong case its pretty limited in value. I guess the only real precedent to go by is what was Highbury worth relative to £/area when it was sold. 

This is why I think, if it is what my hunch is, Derby have stumped the EFL. The EFL will probably realise the person carrying out the valuation would have a reasonable basis for why they came up with that number, I imagine the auditors will take the valuation at face value when it appears in the financial statements because its backed up by an independent valuation, and if it was a reasonable rental yield, the tax man might be relaxed that they will get their money in reasonable time. If you want to challenge a chartered persons valuation with those parties not supporting it, I can't see a huge prospect of success. 

If EFL were to say "We question this valuation and profit owing to it being a related party" pointing to the regulations in question- which Derby signed up to along with all clubs as a condition of membership.

If the EFL wished to appoint a truly independent valuer, with their rules- what's to stop them? If second independent valuer backs it up quite well, then it's unbelievable but you have to accept it.