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18 hours ago, Mr Popodopolous said:

Big news.

Seems that Derby are going to try to get the minus 12 halved citing Covid.

Nixon article. Says that will cost them £300k, says that they will have to produce 6 years worth of accounts as evidence. Doesn't say anything about the 7 day limit but says that minus 9 might have been baked in ie halved administration deduction plus another 9 for FFP ie that Settlement and they think Derby can survive with minus 15.

I hope that the EFL use anything and everything they can against Derby. Including the 23 man limit now and beyond.

That aside, this sets a troubling precedent for the EFL if the appeal gets the deduction halved.

This might be a simplistic take on this.

When the new ffp rules and limits were introduced Morris, in common with the owners of every other club, had 3 years in which to take the appropriate steps to bring Derby’s finances into line by the time of the first ffp reckoning. As we now know he did none of that, choosing instead to continue to spend, spend, spend in an attempt to gain promotion to the prem so that he had to resort to the convoluted “sale” of Pride Park to avoid them hitting the ffp buffers.

Had he taken the right steps financially at the outset, yes it would have compromised their promotion aims, but that was the case for every other club that did comply, but more importantly, with better financial controls back then would Derby’s position have become so dire that administration become the only option?

I used to be a mortgage adviser and remember seeing various clients following the “credit crunch” in 2008 onwards. Many of them had been living beyond their means for a few years, racking up overdraft, credit cards and personal loans and then re-mortgaging when they reached their credit limits, to consolidate their debts and bring monthly payments down. They would rinse and repeat this excercise whenever the debts reached a critical level. Unfortunately with the collapse of  property values they were no longer able to do this and their financial chickens would inevitably come home to roost. Funnily enough, according to the clients it was never their own actions that caused the problem, but they would usually cite the impact of the credit crunch/recession/ less overtime etc. etc..

I can understand the administrator looking for every means by which to improve Derby’s appeal to a prospective purchaser, but It seems to me that Covid is a convenient reason on which to hang an appeal ( and yet another option for Derby to play the victim being pursued by the heartless EFL), but it does seem to me that, like many of my mortgage clients,  Morris bought most of this on the club due to his profligacy at a time when the new financial rules should have caused him to be more financially cautious and responsible.

 

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2 hours ago, downendcity said:

This might be a simplistic take on this.

When the new ffp rules and limits were introduced Morris, in common with the owners of every other club, had 3 years in which to take the appropriate steps to bring Derby’s finances into line by the time of the first ffp reckoning. As we now know he did none of that, choosing instead to continue to spend, spend, spend in an attempt to gain promotion to the prem so that he had to resort to the convoluted “sale” of Pride Park to avoid them hitting the ffp buffers.

Had he taken the right steps financially at the outset, yes it would have compromised their promotion aims, but that was the case for every other club that did comply, but more importantly, with better financial controls back then would Derby’s position have become so dire that administration become the only option?

I used to be a mortgage adviser and remember seeing various clients following the “credit crunch” in 2008 onwards. Many of them had been living beyond their means for a few years, racking up overdraft, credit cards and personal loans and then re-mortgaging when they reached their credit limits, to consolidate their debts and bring monthly payments down. They would rinse and repeat this excercise whenever the debts reached a critical level. Unfortunately with the collapse of  property values they were no longer able to do this and their financial chickens would inevitably come home to roost. Funnily enough, according to the clients it was never their own actions that caused the problem, but they would usually cite the impact of the credit crunch/recession/ less overtime etc. etc..

I can understand the administrator looking for every means by which to improve Derby’s appeal to a prospective purchaser, but It seems to me that Covid is a convenient reason on which to hang an appeal ( and yet another option for Derby to play the victim being pursued by the heartless EFL), but it does seem to me that, like many of my mortgage clients,  Morris bought most of this on the club due to his profligacy at a time when the new financial rules should have caused him to be more financially cautious and responsible.

 

Agree with all that you say. His prolifigacy and attempts to fudge it, to kick the can down the road is all somewhat self-inflicted.

Chickens home to roost is a good way to put it. One of the sets of written reasons basically had Derby claiming that the ongoing saga had an effect on their reputation, their valuation, many things. That the lengthy embargo type conditions were damaging- many things. They also argued the time under embargo could be considered to be a mitigating factor.

Now I dare say that was true but the truth is that it was self-inflicted- the League Arbitration Panel basically said as much.

Had he been a bit more cautious in the run-up then as you say, more headroom to deal with this.

Administrators will of course try anything to enhance prospects of a takeover. I hope that the appeal fails of course, and again seems at odds with the seven day limit.

Anyway I hope it fails and hardens the position of the EFL and other clubs against them as they may well need goodwill depending on the structure of the takeover.

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3 hours ago, downendcity said:

This might be a simplistic take on this.

When the new ffp rules and limits were introduced Morris, in common with the owners of every other club, had 3 years in which to take the appropriate steps to bring Derby’s finances into line by the time of the first ffp reckoning. As we now know he did none of that, choosing instead to continue to spend, spend, spend in an attempt to gain promotion to the prem so that he had to resort to the convoluted “sale” of Pride Park to avoid them hitting the ffp buffers.

Had he taken the right steps financially at the outset, yes it would have compromised their promotion aims, but that was the case for every other club that did comply, but more importantly, with better financial controls back then would Derby’s position have become so dire that administration become the only option?

I used to be a mortgage adviser and remember seeing various clients following the “credit crunch” in 2008 onwards. Many of them had been living beyond their means for a few years, racking up overdraft, credit cards and personal loans and then re-mortgaging when they reached their credit limits, to consolidate their debts and bring monthly payments down. They would rinse and repeat this excercise whenever the debts reached a critical level. Unfortunately with the collapse of  property values they were no longer able to do this and their financial chickens would inevitably come home to roost. Funnily enough, according to the clients it was never their own actions that caused the problem, but they would usually cite the impact of the credit crunch/recession/ less overtime etc. etc..

I can understand the administrator looking for every means by which to improve Derby’s appeal to a prospective purchaser, but It seems to me that Covid is a convenient reason on which to hang an appeal ( and yet another option for Derby to play the victim being pursued by the heartless EFL), but it does seem to me that, like many of my mortgage clients,  Morris bought most of this on the club due to his profligacy at a time when the new financial rules should have caused him to be more financially cautious and responsible.

 

Perhaps they shouldn’t have made all the signings they made last summer ??‍♂️

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2 hours ago, downendcity said:

This might be a simplistic take on this.

When the new ffp rules and limits were introduced Morris, in common with the owners of every other club, had 3 years in which to take the appropriate steps to bring Derby’s finances into line by the time of the first ffp reckoning. As we now know he did none of that, choosing instead to continue to spend, spend, spend in an attempt to gain promotion to the prem so that he had to resort to the convoluted “sale” of Pride Park to avoid them hitting the ffp buffers.

Had he taken the right steps financially at the outset, yes it would have compromised their promotion aims, but that was the case for every other club that did comply, but more importantly, with better financial controls back then would Derby’s position have become so dire that administration become the only option?

I used to be a mortgage adviser and remember seeing various clients following the “credit crunch” in 2008 onwards. Many of them had been living beyond their means for a few years, racking up overdraft, credit cards and personal loans and then re-mortgaging when they reached their credit limits, to consolidate their debts and bring monthly payments down. They would rinse and repeat this excercise whenever the debts reached a critical level. Unfortunately with the collapse of  property values they were no longer able to do this and their financial chickens would inevitably come home to roost. Funnily enough, according to the clients it was never their own actions that caused the problem, but they would usually cite the impact of the credit crunch/recession/ less overtime etc. etc..

I can understand the administrator looking for every means by which to improve Derby’s appeal to a prospective purchaser, but It seems to me that Covid is a convenient reason on which to hang an appeal ( and yet another option for Derby to play the victim being pursued by the heartless EFL), but it does seem to me that, like many of my mortgage clients,  Morris bought most of this on the club due to his profligacy at a time when the new financial rules should have caused him to be more financially cautious and responsible.

 

Past spending is irrelevant if the club could have avoided administration completely if it wasn't for Covid. In my opinion there are two key questions:

  1. At which point do you take that snapshot?
  2. Could we have avoided administration despite Covid?

Would that snapshot be the start of Covid lockdowns (March 2020), the start of the 20/21 season, or do you also factor in the belief that we wouldn't have been in lockdown for anywhere near as long (end of 19/20 we were hoping to have fans in from the start of the 20/21 season, then it was pushed back a few months...?
We could have not bought players last summer such as Jozwiak and Byrne for fees plus others for free, but this could be ignored depending on when the snapshot is taken. We definitely could have sold players inn the summer window just gone (notably Buchanan and Lawrence who both had bids rejected) and I think they have to look into whether Mel could have carried on funding the club.

I personally think we'll be unsuccessful purely based on those final two reasons. I am hoping to be wrong though ?

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Mel has quite good wealth still so I've read? Read differing things on that, he's hardly likely to be down to his last few million. Clearly wealth is in the form of cash and assets and takes different forms but I find it hard to believe that he literally couldn't fund them anymore.

The club's cash position. In 2017/18 this was only propped up by the Pride Park sale. By the club I actually mean the consolidated, it suggests that the club were burning through a lot of cash even prior to Covid.

Now whether that's actually been paid either in part or full is a matter of debate but that being the case it should not have been included in the Cash Flow for that year surely. It literally says £81.1m, which implies that it was or should've been paid at the time- cannot have it both ways.

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43 minutes ago, AnotherDerbyFan said:

Past spending is irrelevant if the club could have avoided administration completely if it wasn't for Covid. In my opinion there are two key questions:

  1. At which point do you take that snapshot?
  2. Could we have avoided administration despite Covid?

Would that snapshot be the start of Covid lockdowns (March 2020), the start of the 20/21 season, or do you also factor in the belief that we wouldn't have been in lockdown for anywhere near as long (end of 19/20 we were hoping to have fans in from the start of the 20/21 season, then it was pushed back a few months...?
We could have not bought players last summer such as Jozwiak and Byrne for fees plus others for free, but this could be ignored depending on when the snapshot is taken. We definitely could have sold players inn the summer window just gone (notably Buchanan and Lawrence who both had bids rejected) and I think they have to look into whether Mel could have carried on funding the club.

I personally think we'll be unsuccessful purely based on those final two reasons. I am hoping to be wrong though ?

I would hope that regular snapshots and projections were done, on various scenarios:

  • best case, season started but full crowds by Sept/Oct
  • worst case, no crowds in 20/21
  • sone scenarios in between

But, even if this scenario planning did take place, Mel just went with the most risky / reckless option.  Other clubs didn’t, they scaled back.  So did Derby to some extent, but you still sacked Cocu at a huge cost.  You still spent more than us on signings.

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1 minute ago, Davefevs said:

I would hope that regular snapshots and projections were done, on various scenarios:

  • best case, season started but full crowds by Sept/Oct
  • worst case, no crowds in 20/21
  • sone scenarios in between

But, even if this scenario planning did take place, Mel just went with the most risky / reckless option.  Other clubs didn’t, they scaled back.  So did Derby to some extent, but you still sacked Cocu at a huge cost.  You still spent more than us on signings.

Good post. Should add that they're trying to get out of paying Cocu his full whack claiming that he's an Unsecured Football Creditor. At least according to John Percy the other week.

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19 minutes ago, Mr Popodopolous said:

Good post. Should add that they're trying to get out of paying Cocu his full whack claiming that he's an Unsecured Football Creditor. At least according to John Percy the other week.

I think that is just poor terminology/ ambiguity from Percy.  He’s not secured like a charge over a loan, but he is a football creditor….and will be ahead on non-football creditors….imho.

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29 minutes ago, Davefevs said:

I would hope that regular snapshots and projections were done, on various scenarios:

  • best case, season started but full crowds by Sept/Oct
  • worst case, no crowds in 20/21
  • sone scenarios in between

Maybe the way to look at it milestones. So were the club's actions at that exact point in time in line with what they're saying.
If there wasn't any lockdown at all from March 2020 onwards, would we have been fine?
Did our transfer activity in summer 2020 mean that we would have been fine if stadiums were opened up as expected at the time?
Did our transfer activity in Jan 2021?
Did our transfer activity in summer 2021?

Arguments could be made for either side for most of those. However, other than reducing the wage bill in summer 2021, we'll have a big task arguing in favour of not needing to sell players when we had bids for them.

29 minutes ago, Davefevs said:

But, even if this scenario planning did take place, Mel just went with the most risky / reckless option.  Other clubs didn’t, they scaled back.  So did Derby to some extent, but you still sacked Cocu at a huge cost.  You still spent more than us on signings.

I doubt any money has made its way to Cocu to date, so I wouldn't put that as a factor against the admin appeal.

 

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1 hour ago, Davefevs said:

I think that is just poor terminology/ ambiguity from Percy.  He’s not secured like a charge over a loan, but he is a football creditor….and will be ahead on non-football creditors….imho.

Agreed. Although I did some googling and digging into past admins and John Hollins only got a small slug from Swansea in 2001 or 2002 time, Paul Hart also voted against a CVA at Portsmouth in 2010- but surely by 2021 former managers should be classed as football creditors.

FWIW, my view is simple on this- the Arsenal Bielik favour was not IMO inevitable, because as I understand it, the EFL and the PL have power if required to deduct from central awards, distributions that are due to football creditors once a club are in administration.

My take on this is that if Central Awards are paid I dunno quarterly- not sure how it shakes down, Central Awards distribution. For this argument, let's just say that TV cash + Solidarity Cash at our level=£10m per year in total and is paid quarterly.

Arsenal have an instalment of £1.4m due and DCFC cannot pay for a while- quarterly of £10m=£2.5m. You simply as the EFL divert £1.4m of that from Derby County direct to Arsenal- instalment paid, a problem solved or at least kicked down the road a bit.

If the same is applicable to other football creditors then I'd have no problem with the approach being applied there too.

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2 hours ago, AnotherDerbyFan said:

Maybe the way to look at it milestones. So were the club's actions at that exact point in time in line with what they're saying.
If there wasn't any lockdown at all from March 2020 onwards, would we have been fine?
Did our transfer activity in summer 2020 mean that we would have been fine if stadiums were opened up as expected at the time?
Did our transfer activity in Jan 2021?
Did our transfer activity in summer 2021?

Arguments could be made for either side for most of those. However, other than reducing the wage bill in summer 2021, we'll have a big task arguing in favour of not needing to sell players when we had bids for them.

I doubt any money has made its way to Cocu to date, so I wouldn't put that as a factor against the admin appeal.

 

You could also add “Did Derby get refused the loan/aid to help with the loss of income from COVID, and if they  hadn’t cheated, and were eligible for that cash,would that have staved off administration?”

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2 hours ago, AnotherDerbyFan said:

Maybe the way to look at it milestones. So were the club's actions at that exact point in time in line with what they're saying.
If there wasn't any lockdown at all from March 2020 onwards, would we have been fine?
Did our transfer activity in summer 2020 mean that we would have been fine if stadiums were opened up as expected at the time?
Did our transfer activity in Jan 2021?
Did our transfer activity in summer 2021?

Arguments could be made for either side for most of those. However, other than reducing the wage bill in summer 2021, we'll have a big task arguing in favour of not needing to sell players when we had bids for them.

I doubt any money has made its way to Cocu to date, so I wouldn't put that as a factor against the admin appeal.

 

I guess the point I’m making is if your “risk based approach” is to always look at the best case scenario, then you’re gonna make mistakes.  If Covid / Brexit has taught the average person something it’s about planning and the use of terms like “most likely worst case scenario” etc.  It appears that there was little thought about mitigating against the wearing of rose-tinted specs.

And then you (Derby / Mel / Administration team, not you literally) moan about it.

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5 minutes ago, hertsexile said:

Here we go again Derby trying to stop due process by appealing. Why do they think ? they are a special case every other club that has gone into administration has excepted their 12 point deduction and got on with it ! 

Because they`re Derby County you old silly!

In an ideal world it would be like frivolous appeals against red cards and the penalty would be doubled.

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Wigan appealed and failed- quite rightly so. Had they ironically pushed for a smaller deduction instead of an annulment you never know but no their case was always a non-starter.

In this case, there are legitimate and valid questions owing to the lack of transparency as to whether the appeal was in the correct timeframe- Nixon said it was but if it was after seven days then it should be automatically struck down- a reminder.

image.thumb.png.3a9b4dd62062c9c0b12deff057d574ff.png

Quote

12.2.3 "the reputation of the League and the need to promote the game of association football generally;"

This alone strikes me as having a need to dismiss the appeal.

Quote

Club Income definition- Maybe but then again "This could only be grounds for appeal, however, if the loss occurs during the currency of a binding agreement (i.e. not upon expiry).

On a side note though, Wigan had one thing and they appealed- and lost. Derby though have been trying to squirm, spawn, slime their way out of punishments for 2-3 years, sacking people potentially not in accordance with employment regs- Keogh.

Horrible club. Under Mel anyway. EFL regulations are a good way to keep the pressure on. Their fans need to learn the hard way, a lot of them.

Also see.

image.thumb.png.43787d58559ace6ca047f328650ac412.png

image.png.29c86757de73cee02b9036ec3dae1427.png

Seven days. The EFL IMO need to clarify that everything in this has been met within seven days and no longer...if not then it breaches their own regulations.

https://www.efl.com/contentassets/b3cd34c726c341ca9636610aa4503172/regulations-season-2021-22-final.pdf

Burden of proof is on the club and based on balance of probabilities it seems.

If the Club need to bear the burden of proof, does this mean that it is they who need to prove that it was Force Majeure that tipped them into administration?

Quote

The burden of proof is on the claimant, who must prove that on the balance of probabilities, his/her case is true. This means that the court must be satisfied that on the evidence, the occurrence of an event was more likely than not.28 Feb 2019

 
Edited by Mr Popodopolous
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There is a lot of nonsense flying around on various boards in relation to this.

So - in order to succeed DCFC need to prove that 'the relevant insolvency arose solely from a Force Majeure event'.

Prove in this sense means on the balance of probabilities.

So it is not sufficient for DCFC to show that they went into Administration because of the shutdown of the league, they need to show that this was the only reason.

People also seem outraged that 6 years worth of accounting data has been asked for.  Difficult to see how the 'independent accountant's report' as detailed in the regulations can be prepared without it, but it can always be called part of an EFL conspiracy if they so wish.

However the biggest problem Derby have is the HMRC debt and the attempted winding up order in Jan 2020 and the subsequent withdrawal of that order, along with the lifting of the moratorium on HMRC winding up actions at the end of September 2021.  If the club was in serious financial difficulties in January 2020, what happened to that debt and what does the correspondence with HMRC say.  If it says we are not going to wind you up because of Covid but in the ongoing correspondence it says we still want our money and then the later correspondence says we can wind you up in October the appeal is stuffed.  iT is a pre-covid debt that still han't been paid.

The second problem is Morris.  If he was funding the club at say £2 million a month, which he is allowed to do, and then cut that back to £1 million a month then that is not Covid related.  So the appeal is stuffed.

Oh and to say that the appeal has been brought because the Administrators know all the facts and can prove the position is nonsense.  The Administrators have brought the appeal because a club with an appeal against a 12 point deduction is more valuable than a club with a 12 point deduction.   

Edited by Hxj
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1 hour ago, Hxj said:

There is a lot of nonsense flying around on various boards in relation to this.

So - in order to succeed DCFC need to prove that 'the relevant insolvency arose solely from a Force Majeure event'.

Prove in this sense means on the balance of probabilities.

So it is not sufficient for DCFC to show that they went into Administration because of the shutdown of the league, they need to show that this was the only reason.

People also seem outraged that 6 years worth of accounting data has been asked for.  Difficult to see how the 'independent accountant's report' as detailed in the regulations can be prepared without it, but it can always be called part of an EFL conspiracy if they so wish.

However the biggest problem Derby have is the HMRC debt and the attempted winding up order in Jan 2020 and the subsequent withdrawal of that order, along with the lifting of the moratorium on HMRC winding up actions at the end of September 2021.  If the club was in serious financial difficulties in January 2020, what happened to that debt and what does the correspondence with HMRC say.  If it says we are not going to wind you up because of Covid but in the ongoing correspondence it says we still want our money and then the later correspondence says we can wind you up in October the appeal is stuffed.  iT is a pre-covid debt that still han't been paid.

The second problem is Morris.  If he was funding the club at say £2 million a month, which he is allowed to do, and then cut that back to £1 million a month then that is not Covid related.  So the appeal is stuffed.

Oh and to say that the appeal has been brought because the Administrators know all the facts and can prove the position is nonsense.  The Administrators have brought the appeal because a club with an appeal against a 12 point deduction is more valuable than a club with a 12 point deduction.   

In a nutshell….great post.

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1 hour ago, Hxj said:

Oh and to say that the appeal has been brought because the Administrators know all the facts and can prove the position is nonsense.  The Administrators have brought the appeal because a club with an appeal against a 12 point deduction is more valuable than a club with a 12 point deduction.   

True though the other side of the coin is that markets don't like uncertainty. So if the process is dragged out for another few months is any potential buyer going to commit? And do the Administrators have to borrow to fund the club for another few months, assuming they have achieved their original aim of raising a loan to fund it until January?

Just looks like a continuation of Morris' delaying tactics to me.

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18 minutes ago, chinapig said:

True though the other side of the coin is that markets don't like uncertainty. So if the process is dragged out for another few months is any potential buyer going to commit? And do the Administrators have to borrow to fund the club for another few months, assuming they have achieved their original aim of raising a loan to fund it until January?

Just looks like a continuation of Morris' delaying tactics to me.

…..and delaying tactics look to be exactly the opposite of what is required at this point.

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23 minutes ago, chinapig said:

True though the other side of the coin is that markets don't like uncertainty.

They don't but this a one way only adjustment on this matter, it's 12 points or less than 12 points, so that is overall positive.  The FFP points deduction would be more of an issue due to the uncertainty and cummalative effect.

25 minutes ago, chinapig said:

Just looks like a continuation of Morris' delaying tactics to me.

We are 80 days and counting to the January transfer window.  At which point the squad will be destroyed by offers on the better players that the Administrators will have little option but to accept and in respect of players who want to move on.

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2 hours ago, AnotherDerbyFan said:

Wigan's was about a month iirc

Sounds right. It shouldn't drag in any case.

I suppose a question might be, a tweet by Nixon aside-which is something we'll go with- is it cast iron guaranteed that Derby have submitted all of their evidence including the several years of accounts required within the prerequisite seven days?

I won't post it again but a deadline is a deadline is a deadline. The regs stated everything that needed to be submitted within that seven day window.

Edited by Mr Popodopolous
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Interestingly, skim reading the Derby forum.

Ghost of Clough talks a lot of sense, as per tbh. That aside an interesting quote, although I certainly haven't fact checked. Not a quote but a claim. Rooney declared in the summer that no players would leave without his say so

That could be seen as putting competitiveness on the pitch over aversion of financial difficulties potentially. I hope that the EFL pick up on it- provided that it is true and a fair reflection of course.

Rooney said that Lawrence not for sale at any price in August.

https://footballleagueworld.co.uk/wayne-rooney-addresses-derby-county-player-sale-talk-amid-west-brom-interest/

Any other quotes along these lines?

Edited by Mr Popodopolous
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