Derby County

[Hxj]

35 minutes ago, Mr Popodopolous said:

I must be fundamentally misunderstanding it here.

Yep   But not far off.

Limited liability means that a shareholder can walk away from an insolvent company at no cost, subject to any guarantees they have given, and a director can do too, subject to any provisions of the Insolvency Act.  But if a company is dissolved the unsecured debts disappear, a charge holder can sell any land charged to recover the charged amount and any surplus belongs to the Crown. 

In this case Sevco 5112 owns the football club, not the stadium.  So if that company was dissolved then the club would be owned by the Crown, not by Morris, and the Crown could sell to whom ever they wanted and pocket the money.

[Mr Popodopolous]

33 minutes ago, Hxj said:

Yep   But not far off.

Limited liability means that a shareholder can walk away from an insolvent company at no cost, subject to any guarantees they have given, and a director can do too, subject to any provisions of the Insolvency Act.  But if a company is dissolved the unsecured debts disappear, a charge holder can sell any land charged to recover the charged amount and any surplus belongs to the Crown. 

In this case Sevco 5112 owns the football club, not the stadium.  So if that company was dissolved then the club would be owned by the Crown, not by Morris, and the Crown could sell to whom ever they wanted and pocket the money.

Ha thought so!

Yep, it does- so unsecured debts- ie small creditors etc vanish, £20m HMRC bill also vanishes? Football Creditors Rule...that's a condition of EFL membership I believe. Nice little bonus for the Crown if it comes to that.

Erik Alonso come on down! Do have to wonder if this is yet another attempt to swing FFP for 2019 and beyond in their favour again- "Can't charge us with overspending if you don't have the Consolidated data as we have deliberately let Sevco 5112 and the other 3 relevant companies be struck off"- kinda thing? Or "All you have to go on is the Club/Gellaw Newco 203 (as prepared by us) Revenue v Costs...Sevco 5112, Stadia and Club DCFC and the Academy are no more so that data has disappeared".

Rent reference

43/123

https://www.efl.com/siteassets/image/202021/general-news-images/efl-v-derby-county--decision.pdf

"Can't press for the full Rent if the companies- in this case Club DCFC and Stadia DCFC, have their Rental obligations hidden within those and Sevco 5112 and these 3 no longer exist- £1.1m per year it is".

They truly are slimy from Mel down as a Club though, reading their wording and their persecution complex. ******* pathetic in that Hearing, claiming the EFL had it in for him...a minority of their fans just and they can't help it clearly, and clearly there are many sensible and decent Derby fans out there too, I assume- just a mix of entitlement and outrage that the EFL would dare to question the mighty Mel I imagine. Mel Morris is a pompous arse and that's being kind. A sizeable minority- but minority is less than majority, are I dunno words can't describe.

Edited August 19, 2021 by Mr Popodopolous

[downendcity]

16 minutes ago, Hxj said:

Yep   But not far off.

Limited liability means that a shareholder can walk away from an insolvent company at no cost, subject to any guarantees they have given, and a director can do too, subject to any provisions of the Insolvency Act.  But if a company is dissolved the unsecured debts disappear, a charge holder can sell any land charged to recover the charged amount and any surplus belongs to the Crown. 

In this case Sevco 5112 owns the football club, not the stadium.  So if that company was dissolved then the club would be owned by the Crown, not by Morris, and the Crown could sell to whom ever they wanted and pocket the money.

Im guessing I'm right in thinking that your wealth of knowledge didn't come from a skim read of "Accounting for Dummies"? 

[Hxj]

1 minute ago, downendcity said:

Im guessing I'm right in thinking that your wealth of knowledge didn't come from a skim read of "Accounting for Dummies"? 

Nope - it was very long read! And no I am not an accountant.

[Mr Popodopolous]

Just putting aside my slating of Derby, a substantial minority of their fans, a certain forum and so on- he's become a proper rogue owner hasn't he, FFP or otherwise.

Not a loveable rogue, of course.

Edited August 19, 2021 by Mr Popodopolous

[Hxj]

23 minutes ago, Mr Popodopolous said:

Do have to wonder if this is yet another attempt to swing FFP for 2019 and beyond in their favour again- "Can't charge us with overspending if you don't have the Consolidated data as we have deliberately let Sevco 5112 and the other 3 relevant companies be struck off"- kinda thing? Or "All you have to go on is the Club/Gellaw Newco 203 (as prepared by us) Revenue v Costs...Sevco 5112, Stadia and Club DCFC and the Academy are no more so that data has disappeared".

I doubt that the Treasury Solicitor will care what happens to the football club, and they definitely wont fund the ongoing losses.

[Mr Popodopolous]

9 minutes ago, Hxj said:

I doubt that the Treasury Solicitor will care what happens to the football club, and they definitely wont fund the ongoing losses.

My 2nd part of the 'cunning plan' would be that because Gellaw Newco 203 might be the controlling entity, you keep up obligations for those two, let the other half fall away and debts fall away as do past costs making FFP assessment from 2019 to 2020 and maybe 2021 that much harder.

IIRC it's:

Quote

Derby County FC

Under

Gellaw Newco 203

Quote

Club DCFC

Stadia DCFC

DCFC Academy

Under

Sevco 5112

Then finally.

Quote

Club and Sevco 5112

Under

Gellaw Newco 203

EFL for one surely will have views here!! That whole 2nd bit with lines through it all disappears in this theory...maybe it still needed to be consolidated under Gellaw Newco 203 however.

How would my wild theory fit with their insolvency Regulations- and FFP. I've got a feeling not very well.

Edited August 19, 2021 by Mr Popodopolous

[Hxj]

The football club is directly owned by Sevco 5112 which is directly owned by Gellaw Newco 203 Ltd which is directly owned by Morris.

 

[Mr Popodopolous]

Ah okay I stand corrected!

I just wonder what the angle/action plan of Mel Morris is here...there must be a significant benefit at someone's expense in letting Sevco 5112 and others fall away?

Edited August 19, 2021 by Mr Popodopolous

[Hxj]

1 hour ago, Mr Popodopolous said:

I just wonder what the angle/action plan of Mel Morris is here

There isn't one!  This is just a computer in Companies House applying the Companies Acts and saying your accounts are so late we will now strike you off if you don't submitt the accounts soon.

[Mr Popodopolous]

16 minutes ago, Hxj said:

There isn't one!  This is just a computer in Companies House applying the Companies Acts and saying your accounts are so late we will now strike you off if you don't submitt the accounts soon.

Seems so but then the same hasn't been applied to either Derby County FC or Gellaw Newco 203 Limited yet so I have to wonder if he's given assurances there to CH that he hasn't for the others.

Edited August 19, 2021 by Mr Popodopolous

[Hxj]

18 minutes ago, Mr Popodopolous said:

Seems so but then the same hasn't been applied to either Derby County FC or Gellaw Newco 203 Limited

I think (but cannot guarantee) that that is because they've been issued where both the accounts and confirmation statements are overdue.

[Mr Popodopolous]

1 hour ago, Hxj said:

I think (but cannot guarantee) that that is because they've been issued where both the accounts and confirmation statements are overdue.

Could be.

From memory, the following is the case:

*Club DCFC, Derby County FC Academy, Stadia DCFC- no Confirmation Statement for 2021, no Accounts for 2019 and 2020.

*Sevco 5112- No Accounts for 2019 and 2020, no Confirmation Statement for 2021 or 2020.

*Gellaw Newco 203- No Accounts for 2019 and 2020, no Confirmation Statement for 2021.

Derby County Football Club- No Accounts for 2019 and 2020, no Confirmation Statement until November 2021...the most recent one on time.

Happen to think he's up to something.

As for some Derby fans they're proposing what they would see as an acceptable compromise.

1) A 3-6 points deduction.

2) In exchange for all Embargo conditions lifted.

3) Case or cases otherwise closed.

Now I don't know if they mean just to 2018 or to also include in it any assessment periods to 2019, 2020 and 2021 combined average, maybe to 2017 if you work backwards and maybe parts of the deduction suspended too.

Any merit in that proposed compromise or thoughts as to whether the EFL would consider? Seems a bad deal for the EFL to me!!

[Hxj]

1 hour ago, Mr Popodopolous said:

Happen to think he's up to something.

Keep dreaming!

[Mr Popodopolous]

8 minutes ago, Hxj said:

Keep dreaming!

Haha, eh? Well maybe but...

He does appear to like to push the limits let's say- 'cunning plan'?

[AnotherDerbyFan]

19 hours ago, Mr Popodopolous said:

Don't even know how much they tried to cut back after the Stadium sale in reality.

Season on season or overall from then 'til now?

Season on season
18/19 would have seen a modest decrease in the wage bill. Vydra, Weimann, Jerome, Shackell, Bent, Baird, Ledley all out permanently. Hard to see the wages of Waghorn, Marriott, Malone, Jozefzoon, Holmes, Evans, Wilson, Mount and Tomori exceeding what we offloaded.
19/20 would have been another decrease. Nugent, Butterfield, Blackman, Pearce, Johnson, Bryson, Thorne, Keogh, Olsson all out. Bielik, Shinnie, Rooney and a few cheap loans in.
20/21 another decrease. Martin, Anya, Huddlestone out, with Jozwiak, Byrne, Marshall and Kazim in.
21/22 another decrease. Malone, Carson, Marriott, Waghorn, Jozefzoon, Wisdom out. Allsop, Stearman, Jagielika, Morrison and Baldock in.

 

Overall
Squad list at the time of the stadium sale:
Carson, Roos, Mitchell, Keogh, Davies, Shackell, Pearce, Wisdom, Forsyth, Olsson, Huddlestone, Thorne, Baird, Johnson, Ledley, Butterfield, Bryson, Hanson, Palmer (loan), Anya, Lawrence, Weimann, Russell, Bennett, Blackman, Vydra, Martin, Nugent, Jerome, Bent, Winnall (loan)

Squad list now:
Roos, Allsop, Marshall, Davies, Jagielka, Stearman, Byrne, Ebosele, Forsyth, Buchanan, Bielik, Bird, Shinnie, Knight, Sibley, Morrison, Watson, Hutchinson, Jozwiak, Lawrence, Baldock, Kazim, Stretton

 

I think it's fair to say we've made considerable cutbacks.

[NcnsBcfc]

And now Reading sign Junior Hoillett on a free as well.

I guess they're taking their cost cutting seriously.

[Davefevs]

1 minute ago, NcnsBcfc said:

And now Reading sign Junior Hoillett on a free as well.

I guess they're taking their cost cutting seriously.

I doubt he’s got £60k p.w. this time around

[NcnsBcfc]

53 minutes ago, Davefevs said:

I doubt he’s got £60k p.w. this time around

Indeed.

But still a decent wage, and Reading are well over then FFP threshold, plus on some sort of embargo i think? @Mr Popodopolous?

It just makes a bit of a mockery of us, playing by the rules.

Just like Derby signing Baldock, because of an injury to Kasim-Richards. Just deal with injury like we had to last season.

Either you are on a hard embargo or you're not.

[Davefevs]

Just now, NcnsBcfc said:

Indeed.

But still a decent wage, and Reading are well over then FFP threshold, plus on some sort of embargo i think? @Mr Popodopolous?

It just makes a bit of a mockery of us, playing by the rules.

Just like Derby signing Baldock, because of an injury to Kasim-Richards. Just deal with injury like we had to last season.

Either you are on a hard embargo or you're not.

Couldn’t agree more.

[CyderInACan]

1 hour ago, NcnsBcfc said:

Indeed.

But still a decent wage, and Reading are well over then FFP threshold, plus on some sort of embargo i think? @Mr Popodopolous?

It just makes a bit of a mockery of us, playing by the rules.

Just like Derby signing Baldock, because of an injury to Kasim-Richards. Just deal with injury like we had to last season.

Either you are on a hard embargo or you're not.

It’s a massive pisstake. Hopefully justice will be done. 

[Respectful visitor]

In the interests of balance...

https://ramsreviewpodcast.wixsite.com/home/post/the-wrong-coloured-shorts

 

 

[Mr Popodopolous]

On 20/08/2021 at 15:26, NcnsBcfc said:

Indeed.

But still a decent wage, and Reading are well over then FFP threshold, plus on some sort of embargo i think? @Mr Popodopolous?

It just makes a bit of a mockery of us, playing by the rules.

Just like Derby signing Baldock, because of an injury to Kasim-Richards. Just deal with injury like we had to last season.

Either you are on a hard embargo or you're not.

In terms of Reading- though I largely agree with the point you are making.

Nixon said a few weeks ago that they're capped at £8.5k per week, 1 year deal- free agent or loans without loan fees etc.

Derby adding Baldock and Jagielka feels one too many...pick one, they were allocated 5 signings on EFL terms, Baldock is number 6.

It's there in Black and White "Breach of Profit and Sustainability Rules"- btw Derby's is egregious, outstandingly bad but Reading under those Embargo conditions, they differ a bit to Derby's...

Reading have under 24 Established Players as it stands so...but Charges these absolutely should follow.

Edited August 21, 2021 by Mr Popodopolous

[Mr Popodopolous]

Won't add much to this as I was initially intending to take a bit of a vow of silence on Derby for a while but I did read the other day that Rooney would like to add- he was asked ideally basically- as many as 8 new players.

Can sign all the players he wants...if the EFL get what they want in the manner in which they want it- otherwise I'd urge the EFL to keep these conditions in place indefinitely if necessary, but overall for as long as it takes.

Edited August 21, 2021 by Mr Popodopolous

[chinapig]

Iirc the original deadline for Derby to present their revised accounts was 18th August  The EFL reportedly gave them a 6 day extension, though I have not seen any reports as to why. Perhaps Derby's pet auditor is on holiday?

So presumably the accounts should be presented this week. Unless:

1. I have my timeline wrong.

2. The EFL grant another extension without explanation.

3. A plea bargain is being negotiated to allow the EFL to claim to be tough while minimising the actual punishment.

Thought I suspect the process will drag on a long while yet. A points deduction when Derby are already down or comfortably safe would suit both parties perhaps.

[Mr Popodopolous]

3 hours ago, chinapig said:

Iirc the original deadline for Derby to present their revised accounts was 18th August  The EFL reportedly gave them a 6 day extension, though I have not seen any reports as to why. Perhaps Derby's pet auditor is on holiday?

So presumably the accounts should be presented this week. Unless:

1. I have my timeline wrong.

2. The EFL grant another extension without explanation.

3. A plea bargain is being negotiated to allow the EFL to claim to be tough while minimising the actual punishment.

Thought I suspect the process will drag on a long while yet. A points deduction when Derby are already down or comfortably safe would suit both parties perhaps.

There are 5 threats to Audit Independence and these are as follows:

1. Self-Interest Threat
2. Self-Review Threat
3. Advocacy Threat
4. Familiarity Threat
5. Intimidation Threat

I'll leave any commentary to others.

Should be this Tuesday, and a rumour is that their Embargo will be lifted on the same day- there is also a counter-rumour that there will be a 3 point deduction as well as the Embargo being lifted.

What is unclear is how 2019, 2020 and 2021 joint period would fit into this, or how it feeds into 2021/22 or even working back to 2016/17, that particular 3 year period. It's unclear as to what any final settlement would look like or what periods it would cover...

Edited August 22, 2021 by Mr Popodopolous

[Mr Popodopolous]

Is Derby's wage bill now actually <£10m??

That would be in reference to a mooted £1.5m sell on clause for Will Hughes- could it really have dropped by 80% or so in just 3-4 years? Inclusive of all the non playing staff, non football staff, PAYE bits- what about Keogh compensation, Cocu and his mates etc. Remember the total consolidated wages in 2017/18 were £46m or thereabouts. Decent numbers of their fans seem to think their wage bill is now a bit of a pittance etc.

I remember reading this on Friday but phone died before I could respond properly. A constructive post in parts merits a constructive response. Charlotte Ram, well the less said about them the better!

"A clear hate for Derby and their fans".

Not entirely fair. I certainly have no time whatsoever for Mel Morris and since Derby started to get Billy big stuff in 2018 onwards, naturally I have grown in antipathy- and a lot of the fans seem to laud and condone and praise it, not least the loopholes and Mel has EFL on strings and that too deserves a certain level of slating let's say. Strike me as having a pretty arrogant chunk to their fanbase, with a decent level of entitlement- in these respects anyway.

On the other hand there are sensible Derby fans absolutely- maybe I'm unfairly blaming a majority for a loudmouth minority, but a decent majority of fans aside? Mel Morris is a slimy weasel with a pet auditor, a decent number of the fans seem to condone and laud attempts to get one over and the Club itself are pompous and entitled. Unsure what to make of Stephen Pearce- article I read said even his critics said he was a nice chap but he was at the wheel during this time, Financial Director IIRC?

Stephen Pearce did mention a substantial additional Profit potentially- Kieran Maguire flagged the £30m from 2007/08, ie the Remainder of the Revaluation Reserve on disposal- an issue is that feels like Double Counting, potentially in some respects. Seems pretty sketchy to suddenly bring up to an extra £30m into the FFP calcs...

It's due to a lack of Accounts and Confirmation Statements probably- though interestingly not for the Club itself and Gellaw Newco 203- but the problem with this is that allowing them to be struck off can potentially obscure the FFP figures for 2019, 2020 and 2021 even- but certainly the first two. There are costs contained within Sevco 5112 Limited yet the Club itself (Kieran Maguire again) account for the income in their own Accounts. 2018 is the best example of this- the income for Sevco 5112 and the Club are virtually the same, but the gap is about £14-15m in terms of Profit or Loss before tax. It's unacceptable if the Club are seeking to hide this from the EFL for the 2019, 2020 and maybe 2021 Accounts.

Likewise there was a dispute in respect of Impairment in Gellaw Newco 203 Limited- one of the many sets of Written Reasons out in May covered this but there was a substantial additional Impairment in these which the EFL alleged was Player Amortisation tied up with Goodwill and an attempt to exclude it from the calculations entirely.

Accept? EFL hold certain cards, they can just keep the Embargo going I assume if they don't believe the Accounts reflect what they should, keep it going pending further enquiries and the like and that seems reasonable to me- a minor agreed punishment given how many years there are that need to be recalculated potentially I wonder about- what about the 2019 Accounts? These showed a £31m loss as per the 2020 Written Reasons even before we get onto extra Amortisation analysis but also a possible uplift in Profit on certain Player Disposals, what about the period to 2017 prior to the Stadium Sale but which would require some adjusted Amortisation?

I will though agree that the EFL made plenty of blunders. In 2018 they allowed Derby to pick two valuations. They allowed them to go with the DRC for P&S, but apply to uplift to the Profits method- £74.4m and £81.1m- for P&S you make them pick the lower and budget accordingly. They also allowed the issue to be kicked down the road as Derby wanted the issue shut off ahead of the Summer window- this was at the EFL's privilege so to speak, what should have happened was that outstanding issues were thrashed out before Derby were deemed good to go, compromise might be the more commonly used DRC ie £74.4m for FFP but £81.1m- Profits method- in the Accounts if they wish.

Rent, there's another one- the Independent Valuer themselves stated Annual Rent of £4.16m per season (Paper Transaction or not, it'd still show). Yet the EFL let Derby haggle them down to £1.1m for the spurious bits about days usage for Football- again as a condition to include in P&S I'd be insisting on the Independent Valuation and Rent even if only for P&S purposes and further to that, the more commonly used valuation for the Football Industry. Otherwise enquiries go on through 2018 and restrictions stay in play to give the EFL a proper period to analyse.

Edited August 22, 2021 by Mr Popodopolous

[chinapig]

50 minutes ago, Mr Popodopolous said:

Should be this Tuesday, and a rumour is that their Embargo will be lifted on the same day- there is also a counter-rumour that there will be a 3 point deduction as well as the Embargo being lifted.

My expectation has long been that a deal would be done in a (non) smoke-filled room. A 3 point deduction fits nicely with that. We shall see.

Of course it would send a message to other clubs that egregious behaviour leads to no serious consequences but maybe that suits all parties.

[Mr Popodopolous]

Bit that I couldn't add to that post as ran out of edit time.

FFP and wages? How do you mean? The EFL 2020 Written Reasons showed that Consolidated Accounts were the ones to be used- Sevco 5112 Limited- and this was inclusive of the full wage bill except probably for Academy wages under Allowables. The striking off of certain companies, or potential striking off anyway could well be due to a lack of Accounts or Confirmation Statements for varied periods but interestingly does not include Derby County FC ie the Club or Gellaw Newco 203 last time I looked even though they too have not submitted and the only ones without an overdue Confirmation Statement=the Club as it's due in November sometime.

Could that be a deliberate ruse by the owner to obscure FFP costs- ie "Can't assess the Consolidated Accounts to 2019, 2020 and 2021 if they no longer exist". "Can't check the Rent due for Sale and leaseback if Club DCFC and Stadia DCFC no longer exist". I'd hope the EFL keep all the pressure on if the Club are attempting to deceive them in this manner.

Accept a minor punishment? Well maybe but are you factoring in that Restatement messes up multiple periods? Some for the better and some for the worse but I make it a minimum of 3 FFP periods that have to be re-analysed as a result:

1. 2015/16, 2016/17 and 2017/18
2. 2016/17, 2017/18 and 2018/19
3. 2017/18, 2018/19 and combined average of 2019/20 and 2020/21.

Then if we work back, the EFL site says that 2016/17 is the first year in which the rules take place...

Could therefore be argued that:

2014/15, 2015/16 and 2016/17

Would be adversely or positively affected- but nonetheless affected all the same by the need to Restate.

Hell it could even feed into:

2018/19, combined average of 2019/20 and 2020/21 and 2021/22.

Because what is restated in one period could knock on for better, worse or a mix of the two into subsequent periods and one prior period.

I'm glad you mentioned the EFL and their errors as they have made a lot.

1. When Derby and other Clubs approached them in Summer 2018 or Spring 2018, they held a certain amount of leverage.
2. They IMO could have been within rights to insist that loose ends were tied up before lifting Embargo conditions- read the Written Reasons.
3. Derby wanted it lifted quickly due to the Summer Window opening up- this left a lot of uncompleted issues to return to.
4. EFL seemed to permit two valuations to come into consideration for P&S calcs. The DRC (£74.4m) and the Profits method (£81.1m). They needed positive answers more quickly than the EFL needed to be bounced into it- DRC is much more commonly used for Football Stadia Valuation and Profits method looks a bit of a joke now what with Covid etc decimating Revenues- they seemed keen to let Derby have their cake and eat it to an extent "Yes you can do this and yes we can discuss the higher valuation later- now go and spend!" A better solution might have been to make the case for £74.4m at DRC for P&S purposes and to hold the Embargo in play while negotiations still ongoing...played their hand poorly I think, the EFL. Look at how reluctant they are to lift Embargoes now- this is the way it should have been in Summer 2018, better to get things right at the time than have to argue later. It's a give and take- Mel and Derby just wanted to take, insist on a condition of accepting and lifting the embargo swiftly the £74.4m DRC for P&S.
5. The Rent! Independent Valuer themselves stated £4.16m per season. Now even if this is a Paper Transaction, it ended at £1.1m per season due to some spurious reasons- there was also reference to rent in terms of Club DCFC and Stadia DCFC but this could disappear if the Accounts do- unclear if that was in addition to or part of the £1.1m.

[Davefevs]

City up to 14th