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The Championship FFP Thread (Merged)

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Shifts will do that. :laugh:

Some actual news, reports or claims. 


*Had P&S been scrapped, a cap could have been voted in. However other clubs who complied were never going to agree to that! EFL are said to be committed to the regulations until the end of next season. Some clubs still remain angry over the use of loopholes.

*Many clubs have privately accused Derby, Reading and Sheffield Wednesday of cheating the system. (I don't get why the EFL incidentally appear to have lifted Reading's soft embargo)!

*EFL are considering an appeal, and several other clubs are considering legal action.

Against whom is the question!

The good news is that the EFL are looking at trying to exclude stadium profits from calculations and perhaps more significantly but under the radar, are looking at tightening up of amortisation rules.


That covers a lot but pulled out some key bits for our level and FFP.

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Just a quick reminder of Reading.

Before legitimate exclusions but inclusive of profit on disposal of everything basically! Players fine, fixed assets nah.

2017/18 and 2018/19

Reading FC I think had losses of £50m.

If we use Renhe Sports Management Co Ltd it's £40-41m I think.

The latter includes £29m of fixed asset sales/sale and leaseback, and £3m Aluko loan fee, the former includes £14-15m of fixed asset sale/sale and leaseback and the loan fee. Both fairly atrocious.

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Edit- Uncalled for,

They strike me as a fairly shameless entitled fanbase however, based on some Internet sites.

Cretinous one eyed bunch on DCFCFans and the wider Internet. Some of them anyway- perhaps a sizeable number but certainly not all.


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Found the bit about Middlesbrough.


viii) Procedural Defence 7: Abuse of Process

161) At the heart of this defence is a belief on the part of the Club that the First Charge has been brought against it because the EFL

a) Has improperly succumbed to pressure from MFC (and other clubs), and

b) Has brought the Charge solely or principally to prevent MFC from pursuing the MFC proceedings against it.

162) It is uncontroversial

a) That civil proceedings pursued for an improper ulterior purpose are an abuse of process and liable to be struck out: Goldsmith v Sperrings [1977] 1 WLR 478 @ p503

b) That abuse of power by a prosecutor can justify criminal proceedings being stayed: R v Beckford [1996] 1 Cr App R 94 @ p100-101

c) That a decision to prosecute a criminal charge dictated by ‘some irrelevant consideration’ is vulnerable to challenge: The Cheng Poh v Public Prosecutor of Malaysia [1980] AC 458 @ 475.

163) We accept that similar principles would apply in disciplinary or regulatory proceedings. Charges brought against an entity

a) Because the prosecuting authority had been improperly influenced to do so by an irrelevant consideration, or

b) For an improper purpose would be liable to be dismissed as being abusive.

164) Having carefully considered the evidence – both the contemporaneous documentation and the oral evidence given by the EFL’s witnesses – we had no hesitation in rejecting the Club’s analysis/suggested interpretation of the evidence contained in its written Closing Submissions and concluding that the Club failed to make out this defence on the facts:

a) It is correct, as the EFL has always accepted, that complaints from MFC (and other clubs) about

i)the EFL’s willingness per se to allow clubs to include profits from the sale of stadia for the purpose of P&S submissions, and

ii) the sale of Pride Park having taken place at a price of £81.1m prompted it in 2019 to consider both matters

b) There is nothing inappropriate or improper about that. Investigations are frequently begun as a result of complaints by third parties

c) Those investigations included the appointment of WHE. While there was much crossexamination about

i) The precise purpose for which that appointment was made, and

ii) What occurred at a presentation given by WHE in October 2019 that cross-examination got the Club nowhere. There was nothing inappropriate in the instruction of WHE or the role played by WHE

d) Having decided to consider both matters, the EFL’s own investigations (primarily the commissioning of the 2019 WHE report) led it to conclude

i)That the Fair Market Value of Pride Park had been significantly less than £74.4m/£81.1m as at June 2018

ii) That the consideration recorded in the Club’s Annual Accounts for the sale of Pride Park should accordingly be restated

iii) That by virtue of such restatement the Club had exceeded the ULT for each of the 3 year periods when the 2017/18 Annual Accounts were T and T-1

e) Having reached that conclusion, the proper application of the P&S Rules (in particular P&S Rule 2.9) leads inevitably to a referral to a Disciplinary Commission in accordance with section 8 of the Regulations i.e. to the initiation and prosecuting of disciplinary proceedings.

165) It is of course true that in parallel with those investigations

a) MFC commenced the MFC proceedings (despite the EFL’s best efforts to persuade it not to do so, particularly while the EFL’s investigations were ongoing), and

b) The Club and MFC reached the agreement to stay the MFC proceedings recorded in the 29 November 2019 letter.

166) However, we reject the suggestion that such matters in any way improperly influenced the EFL into initiating or pursuing the First Charge against the Club when it would not otherwise have done so:

a) As at 29 November 2019 the EFL’s investigations into the Fair Market Value of Pride Park were ongoing. The 2019 WHE Report was imminent - it was dated 2 December 2019, the next working day after 29 November 2019 – and is inconceivable that as at 29 November 2019 the EFL was unaware that the 2019 WHE Report would not support a Fair Market Value of £81.1m. Mr Craig effectively accepted as much in cross-examination. It was thus inevitable that the EFL would, in light of that, need to undertake the restatement process required by the P&S Rules 75

b) We see nothing objectionable in the EFL having agreed a stay of the MFC proceedings while that was undertaken. Indeed, there would have been nothing objectionable in the EFL agreeing a stay of the MFC proceedings per se even had the investigations been at a much earlier stage and the EFL been unaware whether there might be any need for it to embark on a restatement process pursuant to the P&S Rules

c) The 29 November 2019 agreement did not oblige the EFL to pursue a charge against the Club. It simply made the stay of the MFC proceedings conditional on the EFL doing so – in other words, it provided that if the EFL did not pursue disciplinary proceedings against the Club, MFC would be free to reactivate and pursue the MFC proceedings against the EFL

d) The EFL did not irrevocably commit to charging or prosecuting the Club; it simply confirmed that it would do so if, having complied with P&S Rules 2.3 & 2.4, the aggregation of the Club’s Adjusted Earnings Before Tax in 2017/18 and/or any other season resulted in a loss that exceeded the ULT in accordance with P&S Rule 2.9. In other words, the confirmation given by the EFL in the 29 November 2019 was nothing more than confirmation that

i)It would comply with P&S Rules 2.3 and 2.4 – something that it was obliged to do in any event

ii) If that process resulted in Rule 2.9 of the P&S Rules being triggered, it would commence disciplinary proceedings against the Club – again, something that was a mandatory consequence of a finding that the aggregation of the Club’s Adjusted Earnings Before Tax in 2017/18 and/or any other season resulted in a loss that exceeded the ULT: P&S Rule 2.9.2.

167) Put simply, we reject the Club’s contention that the First Charge was brought against it by the EFL to ‘buy off’ the MFC proceedings, or to secure some form of actual or perceived benefit vis a vis MFC, or because of pressure from MFC. We reject the suggestion that the terms on which the MFC proceedings were stayed represented ‘an extraordinary bargain‘ by the EFL, or that it created ‘stark conflicts of interest‘ as the Club has contended. That was not, we find, the case:

a) The motivation for the EFL agreeing to stay the MFC proceedings as it did was, we find, to potentially avoid having 2 sets of proceedings addressing the same subject matter running parallel to one another. That was sensible; indeed, the 29 November 2019 agreement records the desirability of avoiding that outcome

b) The spectre of the MFC proceedings played no part, or certainly no material part, in the EFL’s decision to bring the First Charge against the Club:

i)The EFL investigated the Fair Market Value of Pride Park without influence or interference from MFC

ii) Having done that, the EFL considered its obligations under the P&S Rules without influence or interference from MFC. It did so at the 6 January 2020 meeting to which we have referred above, and it did so without any mention of MFC or the MFC proceedings being made

iii) Having done that, the EFL concluded that the ULT had been exceeded for the relevant 3 year periods (with the 2017/18 year as T and T-1)

iv) Having reached that conclusion, a referral to the Disciplinary Commission – the initiation and pursuit of a charge – was mandatory under the P&S Rules.

168) We therefore find that the Club did not establish that the bringing of the First Charge was an abuse of process

In short, Middlesbrough's pressure was perhaps an irrelevant consideration- or deemed so by the Commission in any event.

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Reading again.

Swiss Ramble.


The two relevant ones here are 2017/18 and 2018/19.

The way it is laid out is slightly confusing but the Headline loss- ie before Tax- is inclusive of the Stadium and Training Ground transactions.

Were they not to be included- then that would've put them on the same overspend as Sheffield Wednesday- reports suggest that an investigation still ongoing into Reading but it's unclear.

However irrespective of the Fixed Asset transactions, it's totally true to say they have a problem. Remember too, the £3m loan fee for Aluko.

If I was in particular Birmingham or Sheffield Wednesday, I'd be very keen to know why the EFL have apparently allowed the Ejaria deal all of a sudden. Doesn't make a lot of sense- I see some cutbacks but enough to make good the deficit? Maybe wage deferrals did it?

That including Aluko, Stadium and Training Ground is a 2 year FFP adjusted loss of £41m.

2017/18- Renhe Sports Management Co Limited

Let's assume total allowable costs are £6m per year as it may include some other items?

2017/18- LOSS- £29,893,915

2018-19- LOSS- £11,753,640

That's about £41.6m in 2 years- but let's assume £12m in allowable costs.

That's not too bad at say £29.6m.

Profit on Disposal of Fixed Assets- £29.9m

Aluko loan fee- £3m

That's suddenly £62.5m of 2 year FFP losses- chances are these profits will not be especially recurring.

That with those stripped out is an underline loss of £44m in 2018/19. Yet the EFL seem to see fit to allow the Ejaria signing.

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I never understood the finances behind that. The fact that even with a stadium sale we appear to be in such financial dire straits for next season or two is very sobering.

From the Derby forum- you certainly like to see it!!

Let's get that fixed asset loophole shut before they sell and leaseback Moor Farm (the training ground) and let's get Pearce off the EFL board.

Hopefully SL will be instructing Ashton accordingly, to lobby for the latter and perhaps both.

Doubt people on DCFCFans read this site but if you do, then there's a reasonable chance that the amortisation shooting up by nearly £20m in 2019/20 was a forecast for that season certainly- because clubs within certain loss thresholds have to submit Future Financial Information- this makes monitoring easier (in theory) and likewise if done right should enhance the chances of catching out clubs who push the limits or who perhaps 'amend' their figures.

I say clubs within certain loss thresholds, it's basically most clubs.

Because any club who:

  1. Do not post a profit in the prior 2 sets of accounts combined- ie 2017/18 and 2018/19- this is therefore Test 1. If a club loses £10m in 2017/18 and makes a profit of £12m in 2018/19 then they're free! If not...Test 2!
  2. Test 2 is whereby a club submits their last two actual accounts and their current seasons accounts at the start of March of a given season. If- again as is likely for most clubs- a club has an aggregate FFP adjusted loss of in excess of £15m but below £39m, they have to submit the following, by the end of March of that season:
  • Their Projected FFP figures for the following season- in this case it would be 2018/19 if we're going back to work out from the amortisation figures.
  • Then their Projected FFP figures for the season after that- ie 2019/20. Contained within this would I assume be a forecast on amortisation.

Hence that £20m spike in amortisation might well be accurate. Or within that ballpark anyway.

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Some comparables in terms of Pride Park. The first one has some similarities- but also some differences! Similar bit of the world, both have hosted concerts, KP Stadium is listed as having a Restaurant, listed as having undersoil heating- capacity not dissimilar either? Is a bowl so the corners issue might differ. Assume it has Executive seating- many grounds do. There is a hotel right by it too!

I can certainly accept that KP Stadium might be worth less than Pride Park but not the figures stated!

KP Stadium- 'cost' at time of addition- £19,106,000. Listed as Historic cost.

Remained like this until 2009 when it was valued in May of that year. I say remained at that, basically remained at the 'Cost' net of Depreciation.

May 2009- now £41,463,000. This is inclusive of non-depreciable freehold land to the value of £4,777,000.

Accordingly, the Revaluation Reserve was now £24,701,000- near enough equal to the uplift in valuation. The methodology used was 'an existing use basis' this differs to Pride Park's valuation I believe?

In May 2014, in accordance with their Revaluation policy a further Revaluation was carried out- £41,582,000. This eliminated the depreciation as there was a surplus on the initial Revaluation and was a small uptick.

In May 2017, there was an interim valuation carried out. £45,808,000- this was compared with the depreciated carrying value inclusive of relevant assets known as fixtures of fittings of £45,528,000. In the initial valuation, this includes some £9,555,000 of freehold land. Doesn't appear to state the basis for the valuation however!

By May 2019, the latest revaluation. Market value current use basis...£43,500,000 as against depreciated carrying value of £39,153,000. Included within- and I assume it means the Market value current use basis one- is freehold land of £11,025,000- which of course, is not depreciated.

On the other hand, I should point out one of the differences- zero additions so there is similarity in terms of the ground and the facilities to Pride Park but nothing in 16 seasons worth of 'additions' under that section for the ground.

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Bet 365 Stadium.

Like Pride Park, the club moved there in 1997. It holds less than Pride Park but not by miles. 30,089 vs 33,597 respectively.

Bits of this are somewhat tricky to gauge, as it is not really listed separately in the relevant accounts for some time- so additions and accounting for these? These accounts also appear to run to November which is strange but 12 months are 12 months I guess!

Classified as Investment Property- unclear if it includes all buildings or just the ground but stated at valuation. Assuming that at this time, under "Additions" is the ground. £13,849,347 by process of elimination. Directors considered valuation at that time, to be not in excess of cost- these are the 1997 accounts.

To November 1998- Additions £263,780. The problem is, is this inclusive of Training Ground or solely the stadium? The name of the company indicates the stadium solely!

Accounts extended to May 2000- to bring it back into line with the club. Additions are £151,190. 18 month accounts.

These are not Additions in total but solely under Land and Buildings.

Policy changed to 'Cost' from Investment Property in 2000-01 and thus heralded a period of no "Additions".

Finally come the financial year- now running until March 2007- some additions! £57,323. Unclear as to whether it was to the ground though as it's not clearly stated.

To March 2010, £2,672,762 in Additions. Still nothing definitive yet.

To March 2011, a stated £3,856,736 in additions. Again not specific as to whether it is to Fixtures, Fittings, Stadium, Training Ground or something else!

Come 2012, we have some movement. Some changes. Revalued on a DEPRECIATED REPLACEMENT COST basis- ie the same valuation method that Derby used.

Was before this, at a Cost of £16,480,307. The actual first valuation in some time shows it now worth £32,356,355, Additions- and this is definitively to the Stadium of £1,679,220- the size of the uptick in valuation is therefore equal to the Revaluation Reserve. Cost plus valuation comes to £34,035,575- the accumulated Depreciation is therefore eliminated due to the revaluation and we have valuation of £34m for accounting purposes or £34,035,575 if adding it all as a whole.

Additions of course will cover work done on the ground, ie Mel Morris's developments in 2015. They would be classed under Additions.

To March 2013- and remember no Depreciation as it is being held at valuation- Additions of £591,650 to the Stadium which means it's added to the £34m.

To March 2014- it's a further £308,580 in Additions to the Stadium. Now at £34,900,230.

To March 2015- it's a further £497,763 in Additions to the Stadium. However that is pre a Revaluation at DRC which comes to £33.1m- and that's if we don't include Plant and Machinery which brings it to £34m if we do.

Interestingly, the 2016 accounts referenced that Stoke planned to fill in the corner, with some 1,800 seats. One of the corners anyway between the DPD and Marston Pedigree Stands (no me neither!)

Additions in 2015/16- £211,414. The valuation also was inclusive of land with a net book value of £4,450,000- the first such mention but unchanged from 2015.

Additions in 2016/17- and the notes mentioned planned Stadium specific investment encompassing a Stadium South-East Corner Infill and Stadium seating.

Anyway that year, to March 2017, there was £2,729,905 of Investment to the Stadium.

Onto March 2018...Wow, quite the Addition that season- some £5,837,761 to the Stadium! £41,702,830 a new valuation but OTOH the valuation itself was £42.5m on a Depreciated Replacement Cost basis. The land itself was still £4.45m. Appeared to be an Impairment to the valuation on relegation of £792,757- hence the £41,131,653 valuation of the Stadium- inclusive of Plants and Machinery it was £42,031,653.

Given that the similar methods of valuation were used and some similarities in accounting policies- again I accept Pride Park worth more than Bet 365 but double??

In short, the challenge I put is to explain an apparent £15-20m rise between 2016/17 and 2017/18.

The accounting policy in 2016/17 was like that of Stoke- revaluation model, using DRC.

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Some relevant Accounting Policies state:


2.     Accounting Policies

2.1  Basis of preparation of financial statements

      The financial statements have been prepared under the historical cost convention modified to include certain items at fair value and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

For that, read Pride Park?


2.6  Tangible Fixed Assets

       Tangible Fixed Assets [excluding freehold property] under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses.

Once again, my basic assumption is that the certain item in 2.1 and freehold property in 2.6 is the same thing- Pride Park.


2.7  Revaluation of tangible fixed assets

       Freehold property is carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and any subsequent accumulated impairment losses.  Revaluations  are  undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date.

       Fair values are determined from market based evidence usually undertaken by professionally qualified valuers.

       Revaluation gains and losses are recognised in the Statement of Comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case  the excess losses are recognised in profit and loss.

They appear to have neglected to apply their own accounting policies here. :blush: 


3.  Judgements in applying accounting policies and key sources of estimation uncertainty.

       Stadium revaluation

        The freehold buildings known as Pride Park Stadium were valued by independent valuers Jones Lang LaSalle on 23 May 2013 on a depreciated replacement cost basis. Based on this valuation the directors have assessed the carrying value of the freehold buildings and determined that the current valuation is appropriate.

Now, what was the carrying value as of 2016/17?

Before Depreciation- accumulated or otherwise but also before additions and transfers between classes.


Additions- £728,204.

Transfers between classes- £1,993.299.

Therefore after that, but pre depreciation- accumulated or current- £66,519,478.

If we eliminate Depreciation on Sale then yeah...

If we don't...


My contention therefore is that either the Stadium was overvalued, or the carrying value was too low- or a bit of both! Clearly Gibson's comparison was way out but £81.1m absolutely seems too high!

The carrying value materially, absolutely materially, differs from the 2018 sale price which was supposed to be at 'fair value'! In wholesale contradiction to the accounting policy.

@Coppello how does this sit? Looks to me like the accounting policies might just have been disregarded IMO.

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Bit of interesting stuff on Price of Football podcast this week- I've read the layout/preview but I'm glad this is finally being noted somewhere. Still catching up on many weeks of podcast so won't hear this for some while! :laughcont:

As we already know, their auditors are Smith Cooper- James Delve by his own admission is a passionate Derby supporter. See Smith Cooper website. Why mention James Delve? Well he was the guy who signed them off in 2017/18- but so far so mundane.

Where it gets a bit more interesting is that Smith Cooper and possibly ANDREW Delve but certainly Smith Cooper were part of the advisory for Mel Morris on the takeover of Derby.

The auditors have also acted for Mel Morris for 20+ years.

The North Stand was for a time known as the Smith Cooper stand.

A partner in 2013/14, and stressed desire to continue for 2014/15 also.

Andrew Delve (also of Smith Cooper) signed them off for Derby for a few years until 2016/17- which was when it became JAMES Delve. I must stress in the interest of balance etc that he for all I know, may be totally unrelated to James Delve. He has though been someone who acted for or worked with Mel Morris a number of times down the years. I must also stress in the interest of balance that Andrew Delve could have no interest whatsoever in football for all I know.

The auditors Smith Cooper North Stand in all its glory! Though I'm sure that North Stand sponsorship is long gone.

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On 29/08/2020 at 22:42, Mr Popodopolous said:


Some relevant Accounting Policies state:

For that, read Pride Park?

Once again, my basic assumption is that the certain item in 2.1 and freehold property in 2.6 is the same thing- Pride Park.

They appear to have neglected to apply their own accounting policies here. :blush: 

Now, what was the carrying value as of 2016/17?

Before Depreciation- accumulated or otherwise but also before additions and transfers between classes.


Additions- £728,204.

Transfers between classes- £1,993.299.

Therefore after that, but pre depreciation- accumulated or current- £66,519,478.

If we eliminate Depreciation on Sale then yeah...

If we don't...


My contention therefore is that either the Stadium was overvalued, or the carrying value was too low- or a bit of both! Clearly Gibson's comparison was way out but £81.1m absolutely seems too high!

The carrying value materially, absolutely materially, differs from the 2018 sale price which was supposed to be at 'fair value'! In wholesale contradiction to the accounting policy.

@Coppello how does this sit? Looks to me like the accounting policies might just have been disregarded IMO.

Little more on this one.

2.1 was still in evidence in 2017/18.

Under Tangible Fixed Assets it shows some further additions- £13,361 and £245,561 in terms of Transfers between classes- this surely helps to puff up the valuation that little bit more.


+ £13,361

+ (Maybe) £245,561.

£66,778,400. Net of and before any depreciation that may or may not be applicable.

However the valuation of the disposal itself was stated at £56,205,091. This suggests that it also included other buildings- maybe the training ground?

Suppose I've not been factoring in fixtures and fittings relevant to Pride Park or bits of Assets under Construction- net of or before any depreciation in terms of the bits specifically bracketed- so I assume relevant to the disposal- we have £59,236,629.

As such, it doesn't stack up. Either the sale price is too high, the net book value or even book value is too low or a bit of both. Problematic given their accounting policies for 2016/17 appeared to have the Stadium at in or around fair value.

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Some interesting snippets.


79) On the same day

a) JLL provided a valuation letter to the Club confirming

i) Its assessment of Fair Value on a Profits basis at £81.1m, and

ii) Its assessment of Fair Value on a DRC basis at £74.4m

JLL also confirmed a market rent for Pride Park of £4.16m on a sale and leaseback of Pride Park to the Club on reasonable terms


83) On 30 June 2018 JLL provided a formal ‘Valuation Advisory’ of Pride Park. That document was reviewed by the Club and on 3 July 2018 the Club provided certain comments and corrections. JLL appears to have accepted those comments and corrections, and later that same day provided its ‘final’ valuation report to the Club (‘the 2018 JLL report’). We return to consider that report in greater detail below – it suffices for the time being to say that JLL

a) Continued to value Pride Park on a Profits basis at £81.1m

b) Continued to value Pride Park on a DRC basis at £74.4m

c) Continued to assess the market rent of Pride Park on the basis of a sale and leaseback agreement at £4.16m

JLL stood by certain valuations it seems- and the rent- hence the use of the word 'Continued' and in a prior point, 'confirmin'.

The proposed annual £4.16m rent seems fine anyway, based on suggested rent for other grounds- Hillsborough £3m on £60m transaction or St Andrews £1.25m on £22.76m transaction- it seems in the right ballpark. £1.1m however?? Only works if non football income does not go to Derby but to Mel Morris etc.

It also appeared that the Club corrected such a large valuation firm and their suggestions were accepted- which seems a bit odd!!

Part of those corrections clearly led to the following differences:


84) Before we leave the 2018 JLL report we return to the exchanges that took place between JLL and the Club, and the Club and the EFL, in late June 2018:

a) As we have said above, on 26 June 2018 Mr Holt of the Club sent an email to Mr Karran confirming ‘stadium valuations [by JLL] of £81.1m using a profits method and £74.4m using a DRC method’. Mr Holt’s email

i)Began ‘As discussed yesterday, please see the email below from JLL and attached workings’ which were said to confirm such valuation

ii) Set out below his text an email that purported to have been sent by JLL to the Club at 18.01 on 21 June 2018 titled ‘JLL – Pride Park Draft’ and which stated (under the heading ‘Fair value on basis of Depreciated Replacement Cost

(1) ‘Having reviewed evidence we have adopted a cost of £3,000 per seat for Pride Park, based on a total number of 33,435 at the venue’

(2) ‘We have assumed an economic life of 60 years’

(3) ‘In total we have calculated a [DRC] pf £74.4m’

iii) Attached inter alia a document titled ‘JLL – Derby County – Pride Park – Valuation Model 1 – 21 June 2018.pdf’ which comprised the calculation by which JLL had arrived at its DRC valuation of £74.4m

b) In the documents disclosed by the Club there was indeed an email sent by JLL to the Club at 18.01 on 21 June 2018, to which a document titled ‘JLL – Derby County – Pride Park – Valuation Model 1 – 21 June 2018.pdf’ was attached. However

i)That email stated (under the heading ‘Fair value on basis of Depreciated Replacement Cost’)

(1) ‘Having reviewed evidence we have adopted a cost of £3,000 per seat for Pride Park, based on a total number of 33,435 at the venue’

(2) ‘We have assumed an economic life of 50 years’ (not 60 years)

(3) ‘In total we have calculated a [DRC] pf £57.8m’ (not £74.4m)

ii) The attachment comprised the calculation by which JLL had arrived at a DRC valuation of £57.8m (not £74.4m). That calculation

(1) Used a cost per seat of £3,000

(2) Used a capacity of 33,455  

(3) Assumed economic life for the stadium of 50 years, giving an adjusted remaining economic life of 28 years

(4) Assessed depreciation at 44% and functional obsolescence at 5%

c) In the Club’s disclosure there was a further email sent by JLL to the Club at 15.17 on 25 June 2018, to which a document titled ‘JLL – Derby County – Pride Park Valuation Model – Cost v2 – 25 June 2018.pdf’ was attached:

i)The email (in response to a query from Mr Holt at the Club ‘How are you getting on with the revised DRC workings? Is it possible these could be sent across ahead of my 4.30pm meeting’) read ‘… as discussed, we are comfortable revising this as discussed this morning. See attached’

ii) The attachment comprised the calculation by which JLL had arrived at a DRC valuation of £74.4m. That calculation

(1) Still used a cost per seat of £3,000

(2) Still used a capacity of 33,455

(3) Assumed an economic life for the stadium of 60 years, applied a maintenance adjustment of a further 5 years ‘due to good cap-ex’, and so assumed an adjusted remaining economic life of 43 years

(4) Assessed depreciation at 28.3% and functional obsolescence at 5%


85) Without hearing from Mr Holt it is impossible to be certain exactly

a) How the ‘JLL email’ sent to the EFL on 26 June 2018 came to be sent as it was, or

b) How the attachment sent to the EFL on 26 June 2018 came to be labelled as it was.

The strong suspicion is however that (1) the wording of/figures in JLL’s 21 June 2018 email to the Club was changed by Mr Holt before he forwarded the same to the EFL, (2) the attachment to JLL’s 25 June 2018 email was relabelled by Mr Holt to make its nomenclature consistent with the other attachments sent by JLL on 21 June 2018, and (3) Mr Holt replaced the actual attachment to JLL’s 21 June 2018 email with that ‘renamed’ attachment; it is difficult to conceive of any other sensible explanation.


The Riverside is another good comparison- land value will be somewhat less but the methodology seems similar to Derby pre 2018.


86) The question then becomes – so what? We consider below whether that conduct has any consequence for any of the Club’s procedural defences. However, that matter aside, our view is that the manipulation described above, if that is what it was, is irrelevant. The Club was perfectly entitled to discuss with JLL, and challenge JLL on, the initial figures that JLL provided on 21 June 2018. JLL was perfectly entitled to reconsider its initial figures in the light of such discussions. That is in all probability what happened, and what caused JLL to provide a revised DRC valuation figure to the Club on 25 June 2018. There is certainly no criticism to be made of JLL for providing that revised figure as it did. While it was unwise of Mr Holt to have manipulated JLL’s email – if that is what he did – it is unlikely in our view that the ‘manipulated email’ actually contained any view that JLL had not by then expressed to the Club, or that the ‘manipulated email’ was in fact misleading. Certainly the ‘manipulated email’ reflected the views set out in the 2018 JLL report.


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iii) The valuation history of Pride Park

177) As well as the reports prepared for these proceedings by Mr Messenger and Mr Honeywill, we were also provided with a number of valuation reports that had been prepared for the Club in recent years:

a) In December 2007 Peter Clarke of King Sturge valued Pride Park. He did so on various bases, including the DRC method. The King Sturge report

i)Recorded (as one of ‘two particular features of the structure’ of Pride Park) that ‘construction has been completed all around the pitch including the corners which are areas where construction costs per seat are at the maximum’ (emphasis added)

ii) Estimated (as at December 2007) that the current replacement of the stadium and its facilities amounted to a little over £77million. The report noted ‘In making this assessment we have consulted with our building surveyors who have in turn used the various building cost indices to arrive at this overall figure. In addition to this we have added professional fees for the 82 construction and an appropriate allowance for finance during the construction period to arrive at an overall replacement cost

iii) Depreciated that sum by 10% for functional obsolescence, and further adjusted that sum to reflect the fact that Pride Park was by then 10 years old, out of an estimated overall lifespan of 60 years

iv) Concluded that the value of Pride Park on a DRC basis was £70,000,000, which equated to £2,029 per seat. In carrying out that calculation King Sturge used the stadium’s actual capacity of 33,455 as the multiplicand

v) Gave lower valuations for Pride Park on other bases (including a profits basis)

b) In May 2013 Mr Clarke – by then of JLLvalued Pride Park again. He again did so on various bases, including the DRC method, as at 31 December 2011 and 31 December 2012. The 2013 JLL report

i)Adopted a build cost of £2,750 for the year 2012 and £2,800 per seat for 2011. The 2013 JLL report recorded that ‘Generally the cost of stadiums has increased in the past few years … We are however now noting a stabilisation or even reduction in some cases of build costs for this type of specialist property, particularly for sub-40,000 capacity stadia’

ii) Estimated re-build costs’ of £93,500,000 for 2012 and £92,000,000 for 2011. That figure was thus up from £77m in the 2007 King Sturge Report

iii) Depreciated those sums by 23% for physical depreciation and a further 15% for functional depreciation – a total of 38% - before adding professional fees and finance costs, and a sum to reflect land value (at £350,000 per acre)

iv) Estimated the value of the stadium at £69,500,000 (as at 31 December 2011) or £66,500,000 (as at 31 December 2012) on a DRC basis, equivalent to £2,077/£1987 per seat

v) Gave lower valuations for Pride Park on other bases (including a profits basis).

In the 2012/13 accounts, Land and Buildings pre any depreciation came in at £61.42m- feels pretty much spot on once professional fees, finance costs and land value factored in. Unclear exactly what it includes in terms of Land and Buildings though.

The accounting policies for Fixed Assets had SOME similarities to those of Middlesbrough. Helpfully, in 2016/17, Middlesbrough's accounts showed how it might be laid out.

This is the Riverside, the training ground and other properties all together.


At valuation in 2015- £76,480,000

Additions- at cost 2016- £1,237,000

Additions- at cost 2017- £5,678,000

Total- £83,485,000.

That's pre depreciation ie the 2015 valuation and then additions at cost before any further depreciation would occur.


At valuation in 2015- £76,480,000

Additions- at cost 2016- £1,237,000

Additions- at cost 2017- £5,678,000

Additions- at cost 2017- £283,000

Revaluation- £2,232,000

Total- £86,000,000

Might see if I can draw up a similar matrix for Derby.

The final valuation appears to be after depreciation though.

Might also add, those (granted potential minority on Twitter, social media etc) Derby and Aston Villa fans are classy as ever...


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On 01/09/2020 at 15:22, Mr Popodopolous said:

I'd go as far as to say that Morris and some of their fans are almost Trumpian. Trumpian cherrypicking is what SOME of their fans and hierarchy are.

I don't mean in worldview or politics etc- no idea on that and nor is it relevant for this thread- more like style. Tone.

What should their tone be ?

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Not strictly Championship in the here and now related, but found this snippet when looking for another article- perhaps Fulham losing at Wembley might have worked a bit better for us than them winning. Was moot in the end of course due to a certain ex City LB- but...

They were perhaps close to FFP than might have been assumed. Despite Year 1 of Parachute Payments, despite a year in the PL at the higher- £35m- level!

Covid would have course have played a part (as with everyone), but they had in that 3 year period, the 4th year of Parachute Payments in 2017/18, the £100m in TV money- and the £35m loss limit in the PL and the first year of Parachute Payments having come straight back down- good profit on Sessegnon too, all to the books as he was an academy product!

As for Nottingham Forest, despite spending and not the biggest income they do seem to sell quite well- that Cash fee and the rolling up of 2019/20 and 2020/21 will keep them alright IMO.

£7m for Brereton?? This is THE prime example! Clear to see who got the better end of the deal there...think they have made some healthy profits on disposal in recent times though.


Fulham's transfer plans WILL suffer if they aren't promoted

Fulham will be desperate to secure promotion to the Premier League in the play-offs, otherwise their transfer plans could be badly hit

Cottagers boss Scott Parker has been warned the club will only be able to make loan signings during this summer's transfer window if they fail to win promotion back to the Premier League

Despite being owned by Shahid Khan, the club will have to curb their transfer spending next season if they remain in the Championship as they will be close to breaching the FFP regulations. The impact of the coronavirus crisis has also affected Fulham's finances, as it has with all clubs in the country.

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Good old Matt Hughes- seems I was not wrong about Derby releasing the written reasons ahead of time- I didn't know the specifics about the agreed release time but I knew they had acted unilaterally.


Derby break embargo

Derby's relationship with the Football League has become so toxic in the light of their spending charge that the club deliberately published the written reasons behind the independent panel's decision to clear them last week an hour before the embargo time that the two parties had mutually agreed.

The EFL have until Tuesday to lodge an appeal against the panel's verdict that Derby's sale of Pride Park for £80million and amortisation procedures did not constitute a breach of profit and sustainability rules.

If I'm honest, I'm not sure how big a chance they- the Football League would have- in any appeal but I hope they do so anyway. I also hope that clubs are taking note and continuing to consider whether Pearce is still appropriate for the role of a club rep on the Football League board. Not so much him, more his boss IMO!

However in the interests of balance it appears they are selling Bogle and Lowe- fees in total for the pair somewhere between £10-15m, unsure how much but looks like signs that they are doing the right thing on this score at last...

Now then, Reading and Stoke- these clubs are surely ones with P&S questions but the former appear to have neglected to sell anyone for any significant fees, even rejecting a bid for Swift or two bids for Swift and the latter it's still unclear.

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Still I wonder about the £81.1m valuation too- but independent valuations are probably extremely hard to unpick. One valuer vs another- even though comparables in the region make Pride Park look toppy IMO.

Probably choosing the charge they feel they have best chance on. Nonetheless, the valuer they chose- amateur hour or what! He didn't even go to Pride Park to value it!

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They're not happy on DCFCFans! 😍

The truth is, I believe quite a few clubs are happy about this. Having said that given the forecasted spike in amortisation for 2019/20 I'm not too fussed on some levels about this charge! Suppose the EFL want to set a standardised amortisation method for clubs moving forward.

On a serious note, I was expecting an appeal of some description and yes I do think the EFL will want to set some kind of legal grounds for a standardised amortisation method.

From memory:

Vs Bolton- EFL appealed and lost. Happy to check though.

Vs Birmingham- EFL appealed and won- but a reprimand. Nonetheless that stays on permanent record etc. Likely can cite it as another case in any future proceedings, certainly with the period if any should arise.

Vs Derby- Who knows??

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11 hours ago, Davefevs said:

Do you think that’s why they’ve sold Lowe and Bogle???

Those two being sold should mean we'll meet the 4 years to 2021 P&S limits. We were hoping to get more for Bennett and actually sell Malone and Jozefzoon, which may have meant keeping one of Lowe/Bogle.

The coronavirus impact and P&S period changing to 4 years appears to have saved us from a hefty penalty, for what would have been the 3 years to 2020. Although, if it wasn't for the extended season, we would have almost certainly sold players to stay within limits anyway.

We've got a paper thin squad now, with only 16 senior players, one of which we're doing whatever we can to offload, and another two of those having played fewer than 100 professional games. From the 16, 4 are currently injured, with 2 only just returning to the team following injuries.

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Another Derby statement.


This one is more reasonable. None of the woe is me, enemy of the EFL state stuff which was basically quite laughable.

A good post from a sensible poster on DCFC Fans, this predated the statement and is separate but a good post.


a) Mel Morris. Mr Morris has throughout the relevant period been the owner and Chairman of the Club. He gave evidence about his purchase of Pride Park from the Club and the background to that sale. His witness statement also contained a considerable amount of evidence about the Club’s wider relationship with the EFL – a relationship which he characterises as i) Involving ‘dislike’ of him and the Club by the EFL ii) Him being an ‘enemy of the EFL state’, and iii) The EFL having an ‘axe to grind against [him] personally

22) Although we return below to address the Club’s suggestion that the EFL has been motivated to bring these Charges against the Club by some improper stimulus, we also make it clear at the outset that we reject that suggestion. The evidence that we heard and the documentary evidence before us simply did not bear out such an assertion.


He needed to be bigger than this and IMO it was a mistake to articulate it.  It was poor judgement and served no purpose apart from making the club look paranoid.  I have a lot of time for Mel and the financial backing he has put into the club but does that make him immune from any criticism whatsoever?

Bolded bits a) and 22) were by the poster in q. It certainly did make Derby look paranoid, axe to grind etc- Panel dismissed much of this..

I've been critical of it in the past but DCFC Fans is actually in all honesty quite a good read! At times. 

Still have a fairly low opinion of Morris however, Pearce on the board given al the Derby controversy- seems incongruous. Clearly going out to clatter opposition players is wrong BUT it is worth noting that not that I condone it, Pulis did send out Stoke vs Arsenal in a certain frame of mind- according to Dave Kitson in any case,he said Pulis hated Arsenal, Wenger, their style etc.

Lastly given the comparable stadia in that region, in that timeframe etc- and even those sold and leased back a lot of which at suspect prices plus of course genuine arms length sales of grounds? Well £81.1m seems dubious! That said Gibson's £22m feels so low, it is quite likely to be worth more than Bet365 Stadium, KP Stadium- and when Coventry played there, the Ricoh Arena- however that sale price feels wrong to me. Sceptical- as for the rent fall from £4.16m to £1.1m...

I only think the rent fall has some merit if and only if all of the commercial revenue (ha, in these times no!) but in normal times flows to Mel Morris/Gabay/Dell/Uncle Tom Cobley and all :D- whoever!

Anyone but the club basically. Because IIRC it got adjusted down or the argument to adjust it down was because it would be charged based on 100 days of football usage. Therefore only football related revenue should count in the club/group accounts. Commercial revenue independent of that should flow to anyone on the above list- anyone at all except the club in order to justify the marked reduction in rent.

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Firstly - although I know that you will not accept it - the value of Pride Park has been agreed for FFP purposes - it really has.

Secondly - I think that the EFL missed a valuation issue on Pride Park - I would have expected the valuation to also be challenged on the basis of the rental value from DCFC - I doubt that in open market terms that the agreed rental value equates with the capital value given the over-riding dominance of the DCFC lease.

Thirdly I would expect in future that the EFL would appoint experts who are really experts - or maybe not.

Finally the EFL will lose their appeal.

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