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Derby Deserve Relegation; Are the Football League going to bungle this one too?


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1 minute ago, Davefevs said:

I’m just waiting to see whether they have anyone credible interested.  I suspect not at this point.  In some respects a series of defeats might make things easier.  Results are making the -12 look like it can be overcome.

That is my fear too @Davefevs they just may survive this, which would be appalling.

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10 minutes ago, ScottishRed said:

That is my fear too @Davefevs they just may survive this, which would be appalling.

I don’t think they will survive once the -9 gets added too, but it gives them hope…and the Administrators are using that to try anything at the mo’.  I pray they lose every game this season.

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10 minutes ago, ScottishRed said:

That is my fear too @Davefevs they just may survive this, which would be appalling.

It would also likely be the death of P&S so unless the government agrees Tracey Crouch's recommendation* for an independent regulator it will be a free for all.

*they won't as the Premier League will object and money talks. They just have to agree to pay for Boris' next holiday. 😉

 

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1 hour ago, ScottishRed said:

That is my fear too @Davefevs they just may survive this, which would be appalling.

 

1 hour ago, Davefevs said:

I don’t think they will survive once the -9 gets added too, but it gives them hope…and the Administrators are using that to try anything at the mo’.  I pray they lose every game this season.

 

1 hour ago, chinapig said:

It would also likely be the death of P&S so unless the government agrees Tracey Crouch's recommendation* for an independent regulator it will be a free for all.

*they won't as the Premier League will object and money talks. They just have to agree to pay for Boris' next holiday. 😉

 

Are we all a bit cross purposes?

No way that they survive - 21. The hoped for - 9 with 3 more suspended  P&S deduction should also come with a business plan.

In addition, there will be embargo type regulations still in play until such time as these are satisfied.

Finally @chinapig how does it end P&S? The EFL have significantly more leeway now. ie Fixed Asset loophole shut, plus no need to rush to get it done by June 30th unlike Harvey seemed happy to do- there is no upper limit as the EFL have said.

Though it would be funny if Derby got severely punished over amortisation then the amortisation laws were reformed. :)

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One more message, well it's two fold.

To some of the charmers on DCFCFans

By no means all, but a few objectionable ones- your knuckles must really drag given your reaction to critical if valid points. Derby away is next Spring is it?

To David

  1. Ah yes- the King- well so he thinks. Ads stopping for the site as club into admin- or potentially. A few words of comfort- "Get a proper job" as a chant has gone in the past.
  2. Secondly. Say what you will some of it is blah blah, but anyway whatever it is, one good thing that I am highly grateful for- at least I don't live in Grimsby. That is a place that has really seen better days although I expect the fish and chips are excellent...
  3. PS- when are you going to release the minutes- one of Mel's favoured sons (not literally), the Mel has now gone- yet still you sit on these. Letting down your loyal fans eh, bless.
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6 hours ago, Hxj said:

The actual transactional data is considerably more valuable than the accounts.  This is because the accounts can be constructed from the data, but the data cannot be obtained from the accounts.

No other EFL clubs (all three divisions) currently have any embargoes for missing accounts or FFP data.

Ok so Derby County’s administrators are mounting an appeal based upon no accounts for previous years.
 

In your words transactional data that has not to this point been seen and the idea that this ‘data’ will show that they were never in financial difficulty despite never having produced accounts for the several years in advance of Covid.

Is that a fair summary?

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9 hours ago, Mr Popodopolous said:

Finally @chinapig how does it end P&S?

It's a worst case scenario but my thought is if Derby win their appeal against the 12 point deduction on grounds other clubs regard as spurious owners may decide it's not worth complying if there are no or insufficient consequences.

Given the Sheff Wed precedent there is also the possibility the 9 point penalty could be reduced on appeal.

So we could reach a point where owners are so exasperated they conclude that no regime will work so simply give up on it and we are back to a free for all.

Of course the clubs could significantly beef up the powers and resources of the Board and Executive but I doubt that will happen unless there is government pressure. I have already said why I think that won't happen.

Who knows in the meantime what the knock on effect of potential changes in UEFA policy might be?

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7 hours ago, REDOXO said:

Ok so Derby County’s administrators are mounting an appeal based upon no accounts for previous years.
 

In your words transactional data that has not to this point been seen and the idea that this ‘data’ will show that they were never in financial difficulty despite never having produced accounts for the several years in advance of Covid.

Is that a fair summary?

That's not quite right. It's not about 'financial difficulty', but whether in balance of probabilities, we entered administration solely because of Covid.

There are many ways that statement can be interpreted.

In the basic sense, if we had the £20m cash we missed out on as a result of Covid, would we avoid admin completely?

A little example here of how much money if left in Mel's piggy bank. Let's say he had £30m at the start of 2020 (before lockdown). The plan being to slowly reduce his input so that the club will run at an organic profit. By the end of the 21/22 season, that goal was set to be achieved, and no more money ever needs to be taken from his piggy bank.

image.png.8bc80fdefa31e2b5191778cea7155f06.png

However, Covid struck which ruined those plans. Sales made in the summer to get some cash in and others let go to cut the wage bill. Fans still not allowed in so further sales and cutbacks necessary in the Jan window. But still, not money left by Autumn 2021.

image.png.4580555beda2d718a6790d266a72c123.png

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3 hours ago, AnotherDerbyFan said:

That's not quite right. It's not about 'financial difficulty', but whether in balance of probabilities, we entered administration solely because of Covid.

There are many ways that statement can be interpreted.

In the basic sense, if we had the £20m cash we missed out on as a result of Covid, would we avoid admin completely?

A little example here of how much money if left in Mel's piggy bank. Let's say he had £30m at the start of 2020 (before lockdown). The plan being to slowly reduce his input so that the club will run at an organic profit. By the end of the 21/22 season, that goal was set to be achieved, and no more money ever needs to be taken from his piggy bank.

image.png.8bc80fdefa31e2b5191778cea7155f06.png

However, Covid struck which ruined those plans. Sales made in the summer to get some cash in and others let go to cut the wage bill. Fans still not allowed in so further sales and cutbacks necessary in the Jan window. But still, not money left by Autumn 2021.

image.png.4580555beda2d718a6790d266a72c123.png

Hi @AnotherDerbyFan  yes on the balance of probability not entering accounts to the EFL for several seasons and continuing not to, was not the action of a club that were acting within the spirit or the letter of the rules, most would suggest. 
 

However the administrators and/or independent accountants will now attempt to prove that this flouting of the rules was not related to the eventual entering administration, which was solely losses from Covid?

Is this a fair summary?


 

 

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It seems to me that Morris took the club into administration when he was unable to find a buyer and was no longer prepared to underwrite the club's losses. I say no longer prepared to as from the figures I've seen quoted re his personal wealth it would appear he would have been able to. 

As far as I can see, the primary reasons he couldn't find a buyer were  the club's debt levels and the jeopardy caused by the EFL's pursuit of rule breaches, punishment for which (embargo and points deduction) could seriously jeopardise their championship status. 

Both these issues were caused by Morris's decision to ignore Ffp rules, but to continue spending to try and secure promotion, all of which occurred well before the pandemic struck. 

Also if the pandemic was deemed the cause of administration, why did it not take place until we are into the first season when crowds have returned and cash flow would be returning to levels close to pre Covid levels? 

Finally, I think I'm right in saying that Derby has a substantial tax liability outstanding. If this, or a sizeable chuck of it, predates the pandemic then I'd say it was a clear indicator of financial problems being there for some time and that Covif is a red herring. 

Lastly, if Covid is the cause of Derby's administration, then where is the list of all the other less wealthy EFL clubs that have similarly failed over the last 18 months?

 

 

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13 minutes ago, downendcity said:

It seems to me that Morris took the club into administration when he was unable to find a buyer and was no longer prepared to underwrite the club's losses. I say no longer prepared to as from the figures I've seen quoted re his personal wealth it would appear he would have been able to. 

As far as I can see, the primary reasons he couldn't find a buyer were  the club's debt levels and the jeopardy caused by the EFL's pursuit of rule breaches, punishment for which (embargo and points deduction) could seriously jeopardise their championship status. 

Both these issues were caused by Morris's decision to ignore Ffp rules, but to continue spending to try and secure promotion, all of which occurred well before the pandemic struck. 

Also if the pandemic was deemed the cause of administration, why did it not take place until we are into the first season when crowds have returned and cash flow would be returning to levels close to pre Covid levels? 

Finally, I think I'm right in saying that Derby has a substantial tax liability outstanding. If this, or a sizeable chuck of it, predates the pandemic then I'd say it was a clear indicator of financial problems being there for some time and that Covif is a red herring. 

Lastly, if Covid is the cause of Derby's administration, then where is the list of all the other less wealthy EFL clubs that have similarly failed over the last 18 months?

 

 

It does seem that simple. Doesn’t it?

But hey maybe we will all get a surprise!

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Beautiful summary @downendcity 👍🏻👍🏻👍🏻.

Looks like Morris continued to pay the players, but not the Tax and NI (plus probably Employers NI too).  That’s a conscious decision isn’t it, knowing failure to pay players could lead to players walking out of their contract and potential points deduction too.

I guess Mel just walks away.

Could he have found a buyer if he’d priced it as a Lg1 club?  Or is that the problem, nobody would buy it as a Lg1 club with the debts associated?

 

 

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4 hours ago, hertsexile said:

Derby Just trying to dodge the bullet once again looking for every loop hole in the book to upset  legal process rather than facing the music. 

Don't disregard either who their administrator is- or one of them anyway. Mr. Andronikou has form for this so in a way him and Derby are a perfect match.

He made noises about appealing their -9 in the PL in 2009/10.

Quote

Speaking about the expected nine-point deduction for entering administration, Mr Andronikou said: "Yes, it is a Premier League rule but that rule has never been tested, and that's what I will do."

http://news.bbc.co.uk/1/hi/business/8570134.stm

He appealed about their non-granting of a European license in 2010- being in the FA Cup final could have seen them in line for a Europa League place albeit UEFA rules surely would have took it off the table- and the PL and FA weren't backing it anyway.

https://www.theguardian.com/football/2010/apr/23/portsmouth-europa-league-appeal-blocked

He threatened to go the CAS regarding it.

https://www.thetimes.co.uk/article/portsmouth-told-there-can-be-no-late-application-for-europa-league-place-jp3kfk95zgh

https://www.express.co.uk/sport/football/172098/Andrew-Andronikou-They-keep-on-punishing-us

He complained about the Football Creditors rule.

https://www.theguardian.com/football/2010/apr/23/portsmouth-premierleague

Lastly, he was on the record as criticising the EFL for conditions stalling prospective takeovers.

Well I cannot find it now but I remember seeing it the other day.

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I should also add, could the EFL act in a difficult manner- ie within their regulations- in terms of the takeover.

https://www.efl.com/-more/governance/efl-rules--regulations/efl-regulations/appendix-3-owners-and-directors-test/

This offers a fair few hoops to jump through these days for any prospective new owners- although with Mike Ashley, it might he hard to find a hoop large enough for him to fit through. :)

Quite like parts of Section 3 in particular.

Quote

3              Acquiring of Control

3.1          If any Person proposes to acquire Control of a Club:

(b)           submit to the League up to date Future Financial Information (as defined in Regulation 16) prepared to take into account the consequences of the change of Control on the Club’s future financial position; and

3.1.2      the League shall have the power to require the Club and/or the Person who proposes to acquire Control to appear before it and to provide evidence of the ultimate source and sufficiency of any funds which that Person proposes to utilise to acquire Control and/or invest in or otherwise make available to the Club.

3.2          In relation to any proposed acquisition of Control of a Club by a Person, The League shall have:

3.2.1      the powers set out in Regulation 16.20; and/or

3.2.2      the ability to impose such other conditions,

as in each case it may determine, in order to monitor and/or ensure compliance with Regulations 16 to 19, 21, 22 (including Appendix 3) and 103 to 113 inclusive (and their successor or replacement provisions).

3.3          No Person may acquire Control of a Club and no Club may permit a Person to acquire Control of it until such time as:

3.3.2      The League provides confirmation of its satisfaction with the information provided pursuant to Rule 3.1.1(b); and

3.3.3      The Club and any Person proposing to acquire Control have acceded to any powers and/or accepted any conditions imposed pursuant to Rule 3.2.

I expect that these Regulations could tie a club and prospective new owners up in red tape for a while.

If the new owners are tricky, the EFL can simply impose a full on registration embargo- like with Charlton- until such time as they are satisfied basically.

I also believe that the EFL need to apply every single letter of every single regulation to this club and their new owners, until such time as they are satisfied.

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Well ran out of time to edit- again- but in so far as is possible, might be an idea to treat the new owners or the club under new ownership the same as if it were still run by Mel Morris.

What's your take on the Owners and Directors requirements @AnotherDerbyFan ? Strikes me that the EFL could use those to be pretty difficult- as they should if they have any misgivings whatsoever, my above line notwithstanding and disregarded. You may or may not be able to tell but if I was in a position of power at the EFL what with Derby's recent history and what with outstanding issues, I would be as difficult as the regulations would allow me to be. Not vindictively you understand, just to play as hardball as possible as Derby plainly can't be trusted.

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3 hours ago, downendcity said:

It seems to me that Morris took the club into administration when he was unable to find a buyer and was no longer prepared to underwrite the club's losses. I say no longer prepared to as from the figures I've seen quoted re his personal wealth it would appear he would have been able to. 

As far as I can see, the primary reasons he couldn't find a buyer were  the club's debt levels and the jeopardy caused by the EFL's pursuit of rule breaches, punishment for which (embargo and points deduction) could seriously jeopardise their championship status. 

Both these issues were caused by Morris's decision to ignore Ffp rules, but to continue spending to try and secure promotion, all of which occurred well before the pandemic struck. 

Also if the pandemic was deemed the cause of administration, why did it not take place until we are into the first season when crowds have returned and cash flow would be returning to levels close to pre Covid levels? 

Finally, I think I'm right in saying that Derby has a substantial tax liability outstanding. If this, or a sizeable chuck of it, predates the pandemic then I'd say it was a clear indicator of financial problems being there for some time and that Covif is a red herring. 

Lastly, if Covid is the cause of Derby's administration, then where is the list of all the other less wealthy EFL clubs that have similarly failed over the last 18 months?

 

 

Unsure how it breaks down but reportedly as high as £28m in a total debt to HMRC. Winding up order from HMRC reportedly in Jan 2020- something very odd, usually these make the news at the time- for professional football clubs certainly.

Very good points though.

On a side note, Rooney is at it again- saying the administrators need to find the right buyer and he mentions building up the team- I don't see how given that any prospective new owners will have to agree a 2 year business plan with the EFL or failing that would fall into an embargo. I doubt that in the near, perhaps medium term any business plan would allow extravagant spending.

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1 hour ago, Mr Popodopolous said:

Unsure how it breaks down but reportedly as high as £28m in a total debt to HMRC. Winding up order from HMRC reportedly in Jan 2020- something very odd, usually these make the news at the time- for professional football clubs certainly.

Very good points though.

On a side note, Rooney is at it again- saying the administrators need to find the right buyer and he mentions building up the team- I don't see how given that any prospective new owners will have to agree a 2 year business plan with the EFL or failing that would fall into an embargo. I doubt that in the near, perhaps medium term any business plan would allow extravagant spending.

There is something odd there re HMRC. My understanding, could be wrong, is that they have been ‘ after’ football for a while as they believe there  are a number of things effecting both clubs and players that are breaking the rules.

They tried to ‘get’ Glasgow Rangers and, to an extent succeeded, but not to the full extent that they should have - have a Google of Employee Benefit Trusts!

Rangers should have had to start back in the West of Scotland league but the SFA and the SPFL tried to simply get them demoted to the Scottish Championship - this required a vote by all SPFL clubs, which looked initially that it would be successful.

Then the fans of every other club stepped in and made it crystal clear that should their club vote in agreement there would be no point because they would no longer be attending ANY games, not just against the cheats.

 

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20 minutes ago, ScottishRed said:

There is something odd there re HMRC. My understanding, could be wrong, is that they have been ‘ after’ football for a while as they believe there  are a number of things effecting both clubs and players that are breaking the rules.

They tried to ‘get’ Glasgow Rangers and, to an extent succeeded, but not to the full extent that they should have - have a Google of Employee Benefit Trusts!

Rangers should have had to start back in the West of Scotland league but the SFA and the SPFL tried to simply get them demoted to the Scottish Championship - this required a vote by all SPFL clubs, which looked initially that it would be successful.

Then the fans of every other club stepped in and made it crystal clear that should their club vote in agreement there would be no point because they would no longer be attending ANY games, not just against the cheats.

 

Very interesting stuff about the Rangers situation thanks. Didn't know that. Fair play to the fans, I think that they got off lightly still- and the fact that Ibrox and Murray Park were not sold off to the highest bidder as part of the liquidation process, dunno why.

I have to wonder if the action of fans could set a precedent with cases that are egregiously bad. Derby County fit the bill in this regard IMO. It probably won't but a mass refusal to play or acknowledge the club until certain conditions met, I wonder?

Regarding HMRC, they've long hated the Football Creditor Rule but lost a court case in 2012 about this matter. I wonder if the current national financial position plus the Crown Preference for certain categories of HMRC debt, well I wonder if they could be setting up for another go at it.

A bit that I find odd about the Derby winding up order is that no media outlet picked up on it back in January 2020.

Google eg Southend winding up order, or Birmingham winding up order or likely many clubs and there will be articles from around the time it was dismissed, granted rolled over- whatever. News of Derby's didn't emerge for 18 months!? 

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One thing that struck me when thinking about the Derby situation. 

While the EFL will want to ensure that Derby receive full and proper punishment for rules breaches, what will be their view if those penalties, and likely relegation, put off potential buyers? 

Will the EFL want to see a major club go under on its watch? Will they want to attract criticism that its actions lead to a clubs demise? 

I'm not suggesting that the EFL has done anything wrong in its pursuit of Derby over Ffp issues, but could well imagine it being prepared to rein back some of the penalties, especially if pressured by the administrator that liquidation would be the only option if no buyer is secured. 

By the same token, I would not put it past a prospective buyer to "suggest" such an approach to the administrator, as leverage to get the club on a better footing before purchase, i. e. half a chance of staying in the championship. 

I hope I'm proved wrong, but am  increasingly feeling that Derby will start next season as a championship. If that happens then who said crime doesn't pay? 

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1 hour ago, downendcity said:

One thing that struck me when thinking about the Derby situation. 

While the EFL will want to ensure that Derby receive full and proper punishment for rules breaches, what will be their view if those penalties, and likely relegation, put off potential buyers? 

Will the EFL want to see a major club go under on its watch? Will they want to attract criticism that its actions lead to a clubs demise? 

I'm not suggesting that the EFL has done anything wrong in its pursuit of Derby over Ffp issues, but could well imagine it being prepared to rein back some of the penalties, especially if pressured by the administrator that liquidation would be the only option if no buyer is secured. 

By the same token, I would not put it past a prospective buyer to "suggest" such an approach to the administrator, as leverage to get the club on a better footing before purchase, i. e. half a chance of staying in the championship. 

I hope I'm proved wrong, but am  increasingly feeling that Derby will start next season as a championship. If that happens then who said crime doesn't pay? 

They almost went down last season with no points deduction.

Ive always said eventually a “big club” (imho Derby are) will go to the wall.  Derby might be it.  Sometimes a lesson has to be learned the hard way.

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This situation has its similarities with Portsmouth IMO. Huge HMRC claim, Andronikou. Yes Derby a bigger club but football doesn't learn it seems.

There was a feeling back in 2010 that Portsmouth might have been the lesson- their final set of accounts in the PL prior to really going wrong had wages at over 100% of turnover in the PL...2008/09!?

As for the here and now, any watering down would bring issues of its own. Lack of credibility to the League, if administration is watered down then expect a lot to try it.

I also think that as a club they have acted appallingly and should be treated as such. Overspending is one thing but their overall conduct and attitude has been truly shocking. So are a lot of their fans.

Also possible that they have burnt one too many bridges at the EFL. If I was at the EFL I would be seeking to enforce everything to the max for some time to come.

I can imagine that if some of those in the game read their forum as well their position would remain pretty hard. The blame game, deflection, obfuscation, arrogance to name a few, goes beyond anything I've seen at our level.

PPS. The questions and observations by RamsTrust in their meeting with the EFL, some were truly hard to fathom.

Edited by Mr Popodopolous
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I believe a few on the Derby forum have jumped the shark tbh.

One sage suggested that Kieran Maguire and his input is less than trustworthy because he is...you'll laugh I expect- a stooge for the EFL!? 

One also claimed that the EFL might kill Derby off as a final vindictive act, although I apologise if it's out of context.

Derby's position is largely the result of their own actions and therefore the actions that may or may not occur are largely down their actions as a club. If their club goes down, it's mostly a result of the actions that Mel took.

Additionally saw a bit which I haven't been able to find or looked for in great depth which suggested Rooney asked if the EFL have an agenda against Derby or asked if off field disputes are reflected in on field decisions.

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https://www.thesun.co.uk/sport/football/16446073/efl-derby-administrators-prove-complete-season/

Now isn't this supposed to be done back in the summer/August? As in proof of funds to start the season...why did the EFL not take a bigger stand at that time?

However it seems like it is in accordance with the regulations so the club or fans can have no cause for complaint. I might also add that the devil is in the detail a bit, eg is this £13.5m just wages or total running costs, applicable to the club accounts only or to the consolidated- because the club will gain or will have gained revenue from the subsidiaries of the consolidated accounts- namely Club DCFC, Stadia DCFC- DCFC Academy Limited has costs but does it directly bring in revenue?

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40 minutes ago, Mr Popodopolous said:

https://www.thesun.co.uk/sport/football/16446073/efl-derby-administrators-prove-complete-season/

Now isn't this supposed to be done back in the summer/August? As in proof of funds to start the season...why did the EFL not take a bigger stand at that time?

However it seems like it is in accordance with the regulations so the club or fans can have no cause for complaint. I might also add that the devil is in the detail a bit, eg is this £13.5m just wages or total running costs, applicable to the club accounts only or to the consolidated- because the club will gain or will have gained revenue from the subsidiaries of the consolidated accounts- namely Club DCFC, Stadia DCFC- DCFC Academy Limited has costs but does it directly bring in revenue?

The article is contradicting itself….say £13.5m for a few months (assume to January) but headline says season.

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24 minutes ago, chinapig said:

Didn't the administrators say they needed to raise a £5m loan to get to January?

Dunno, I know they said they could run to January with some funding….wasn’t sure of the amount.  The Wigan Administrators were seen by most neutrals as being decent folk with a good pragmatic approach.  This lot seem like Mel’s dodgy mates.

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