Derby County

[downendcity]

This is a real acid test for and of the EFL.

Outside of Derby’s fan base I think there is general acceptance that with the advent of the new ffp rules Derby/Morris made a conscious decision to ignore the rules, choosing instead to embark on a campaign to secure promotion by continued spending. It appears they did so knowing the financial position ( both in general terms, but particularly with regard to ffp limits) it would place the club, but were banking on promotion as the means of “balancing the books” before the day of reckoning arrived. 

Unfortunately, the day of reckoning arrived before promotion and while Derby fans are almost brazen about having had one over on the EFL, let’s be honest, the sale of Pride Park was a desperate last ditch measure to save the club from ffp embarrassment and depriving them of the chance of promotion. The irony is, of course, that had they bitten the bullet back then and taken a likely points deduction, while it would have meant them missing out on promotion ( which they did anyway) the consequences would have been less severe than they are now looking. In particular, I wonder whether they would have avoided the EFL looking more closely at their accounting techniques, especially around amortisation?

Reading followed a similar course, and while “punished” by the EFL for their transgressions, appear to be making a mockery of the so called embargo, by being able to recruit loanees who are far better ( and affordable) than anything we, and most championship clubs,  could afford to bring in.

That being the case, if  Derby are seen to have escaped full punishment,  by having points deductions reduced, then not only would it put the EFL’s credibility in the same place as requires a whisk to get out of the pan, but it would throw the financial rules into disarray, as I could understand if other clubs take the view “what’s  the point in us complying of other clubs are getting away with it”.

 

 

 

[Hxj]

Not at all convinced that Kirchner will end up with DCFC, something's not right.

There is nothing to indicate that he has real free net worth anywhere near what is required to fund a Championship football club.

[Mr Popodopolous]

Very good post @downendcity

I am hoping that the sheer brazen nature of Derby and their antics means that no quarter is given. More than that though, it's a real acid test as you say for the credibility of the EFL.

IF the deduction comes to Reading at a suitable time it could easily plunge them into a relegation scrap. Mooted as between 6-9 pts and a business plan, with a risk of further deductions next season according to one bit I saw online.

Rahman and Drinkwater, blame Chelsea they must have subsidised it massively. Talking 90% at least which is very odd.

As for Derby, an acid test is what it is. They arguably bottled it in 2018 with Aston Villa, or messed it up or similar whatever interpretation..the change of owners should not have provided a final shot at promotion. Articles from the time said that they were under pressure to cut their wage bill from £45m...that was already significantly down on the prior season.

They ended up getting promoted with a basic wage bill before bonuses of £78m!! By wages I mean total group wages including everyone, NI etc but excluding bonuses. Bonuses saw them shell out £94m!!

The EFL had a business plan, the club themselves were reportedly under Xia looking to slash it to £30m, new owners plus a loophole in and it seems like it is suspended for a year!?

A combination of HS2 and Villa Park revaluation revenue, the latter a sale and leaseback but given the rolling nature of the FFP regs they could easily have restricted them more under the new owners given regard for the following season and maybe 2 seasons. The EFL however did not.

Edited October 26, 2021 by Mr Popodopolous

[chinapig]

1 hour ago, downendcity said:

That being the case, if  Derby are seen to have escaped full punishment,  by having points deductions reduced, then not only would it put the EFL’s credibility in the same place as requires a whisk to get out of the pan, but it would throw the financial rules into disarray, as I could understand if other clubs take the view “what’s  the point in us complying of other clubs are getting away with it”.

Exactly. I have posted before that if the EFL weakens (and who would bet against it?) it could be the effective end of P&S.

[Mr Popodopolous]

Why should the EFL weaken exactly? They have a fair few points in their favour.

@Davefevs We discussed yesterday. I've looked at Nixon's article again and it seems £50m, that would include the ground.

Two massive problems with this if I'm the EFL:

1) The £81m, successfully defended at a Tribunal as well as defended in the Gellaw Newco 202 accounts and by Mel on Talksport.

2) What I've said before, one of the conditions for approval was that it could/would not be a material part of operations. Can you just reverse that on a whim?? Given that the burden of compliance is with a club and not an owner whoever that may be, I don't see how.

As for the prospective new owner, he would like what he calls a sensible discussion on the points penalties. Plus the chance to sign players in January, to give Derby a chance to stay up.

There aren't really that many discussion points tbh. The EFL should make this crystal clear:

1) The terms on offer are the terms on offer.

2) The alternative is continued haggling and eventually a Disciplinary Commission for each and every 3 year period for which questions remain. In each one we will push for the maximum possible penalty.

3) This is no quick process. After all, justice rushed is justice crushed.

4) The current conditions in as far as possible will remain in play while this situation is unresolved.

5) There is also the matter of the Stadium valuation and material part of operations condition in respect of the 2018 transaction. We have a severe problem with this from an FFP perspective, if the ground goes back to the club well under the valuation. Maybe it is new evidence and we will reinvestigate if required.

6) There are multiple conditions still on the Embargo Reporting service still to be resolved. Nothing changes until such time as they are.

The EFL need to lay out a real tough line and stick with it...clubs are watching closely I expect.

Edited October 26, 2021 by Mr Popodopolous

[Davefevs]

So you sell the ground to get around FFP, but wanna include it again for zilch.

Eff off Derby County!

Edited October 26, 2021 by Davefevs

[Clevedon Red]

3 minutes ago, Davefevs said:

So you sell the ground to get around FFP, but wanna include it again for zilch.

Eff off Derby County!

Language David.

[Davefevs]

8 minutes ago, Clevedon Red said:

Language David.

Sorry - language Timothy!

[Desso]

17 minutes ago, Davefevs said:

Sorry - language Timothy!

Glad you don't sit near us.

[Mr Popodopolous]

1 hour ago, Davefevs said:

So you sell the ground to get around FFP, but wanna include it again for zilch.

Eff off Derby County!

Derby fans a few on Kieran Maguire's feed the other week seemed to suggest it had nothing to do with the EFL etc.

Kieran remained silent on it.

@Hxj You mentioned consolidation a while ago or otherwise, could the EFL strongly suggest that to avoid further FFP complications that it remains deconsolidated from the group, even if the new owner himself purchases it below the successfully defended Fair Value? Reconsolidating it 3-4 years into a 20 year lease makes a total mockery...let alone at a lower valuation. Example of deconsolidation would be Gellaw Newco 202 owned by the new owners but still separate from whoever the holding company for the club is. With all of the implications that entails.

I don't see how it isn't in their gift to make it very complicated for Derby and their new owner given the regulations if they go down this path. Is it at all possible that the EFL could refuse the golden share? Bit of a long shot I know.

It's also been suggested that as in administration they don't need to submit accounts- that's what Quantama said. How that fits with the 3 accounts related embargo reasons on the EFL's site is hard to square.

Edited October 26, 2021 by Mr Popodopolous

[Davefevs]

Guessing that the new owner would have to submit accounts to Companies House?  Can’t leave a year unfiled can you?  Or do Administrators have to do it?

[Mr Popodopolous]

Account for 2019 and 2020?

As I understand  if the company is liquidated then nor sure how it works to. Perhaps internal submissions but if liquidated then the Golden Share has to be transferred to the Newco.

I'd suggest that the EFL should use this as a huge bargaining chip in so far as the Regulations allow. Same company and same regs apply surely.

[downendcity]

1 hour ago, Davefevs said:

So you sell the ground to get around FFP, but wanna include it again for zilch.

Eff off Derby County!

Shouldn’t that be Effp off Derby County?

[Hxj]

2 hours ago, Mr Popodopolous said:

@Hxj You mentioned consolidation a while ago or otherwise, could the EFL strongly suggest that to avoid further FFP complications that it remains deconsolidated from the group, even if the new owner himself purchases it below the successfully defended Fair Value?

The EFL can impose a business plan.  There is no reason to suppose that that business plan cannot insist that the ground is kept outside what qualifies as the group for FFP purposes, with arm's length transactions between the stadium and the EFL group.

2 hours ago, Mr Popodopolous said:

Is it at all possible that the EFL could refuse the golden share?

Not if the same company continues to trade as the 'Football Company' and meets the ongoing obligations.  If the company enters into liquidation then it will loose the share.

1 hour ago, Davefevs said:

Guessing that the new owner would have to submit accounts to Companies House?  Can’t leave a year unfiled can you?  Or do Administrators have to do it?

There is a gap between the rules for companies in Administration and the EFL Regulations.  Where a company enters Administration there is no obligation to submit outstanding accounts, but a statement of the financial position at the date of Administration has to be submitted to Companies House.  However the FFP rules require submission of audited accounts otherwise the club will remain in Embargo.  That is one of the many circles that will need to be squared.

Once the company comes out of Administration accounts for subsequent periods will need to be submitted.

 

[Davefevs]

14 minutes ago, Hxj said:

The EFL can impose a business plan.  There is no reason to suppose that that business plan cannot insist that the ground is kept outside what qualifies as the group for FFP purposes, with arm's length transactions between the stadium and the EFL group.

Not if the same company continues to trade as the 'Football Company' and meets the ongoing obligations.  If the company enters into liquidation then it will loose the share.

There is a gap between the rules for companies in Administration and the EFL Regulations.  Where a company enters Administration there is no obligation to submit outstanding accounts, but a statement of the financial position at the date of Administration has to be submitted to Companies House.  However the FFP rules require submission of audited accounts otherwise the club will remain in Embargo.  That is one of the many circles that will need to be squared.

Once the company comes out of Administration accounts for subsequent periods will need to be submitted.

 

So, EFL could impose that Derby remain in embargo because of lack of audited accounts?  How can the EFL be expected to check the FFP submissions for previous years without something to compare to?

[chinapig]

30 minutes ago, Davefevs said:

So, EFL could impose that Derby remain in embargo because of lack of audited accounts?  How can the EFL be expected to check the FFP submissions for previous years without something to compare to?

My memory may be failing me but I thought the EFL said it had received the revised accounts from Derby by the 18th August deadline. Which would mean its accountants have had over 2 months so far to examine them.

[Davefevs]

30 minutes ago, chinapig said:

My memory may be failing me but I thought the EFL said it had received the revised accounts from Derby by the 18th August deadline. Which would mean its accountants have had over 2 months so far to examine them.

I thought they’d issued restated FFP reports / accounts for years back, but aren’t they still yet to publish all accounts at Companies House?  I don’t know the company names to check.

Edited October 26, 2021 by Davefevs

[Mr Popodopolous]

23 minutes ago, Davefevs said:

I thought they’d issued restated FFP reports / accounts for years back, but aren’t they still yet to publish all accounts at Companies House?  I don’t know the company names to check.

As far as I remember, to 2018- although there are rumours that they were not restated in the correct format but who knows.

None for 2019 or 2020 to CH, I question whether the EFL have had these either- certainly the signed off and audited ones.

Edited October 26, 2021 by Mr Popodopolous

[Mr Popodopolous]

2 hours ago, Hxj said:

The EFL can impose a business plan.  There is no reason to suppose that that business plan cannot insist that the ground is kept outside what qualifies as the group for FFP purposes, with arm's length transactions between the stadium and the EFL group.

Not if the same company continues to trade as the 'Football Company' and meets the ongoing obligations.  If the company enters into liquidation then it will loose the share.

There is a gap between the rules for companies in Administration and the EFL Regulations.  Where a company enters Administration there is no obligation to submit outstanding accounts, but a statement of the financial position at the date of Administration has to be submitted to Companies House.  However the FFP rules require submission of audited accounts otherwise the club will remain in Embargo.  That is one of the many circles that will need to be squared.

Once the company comes out of Administration accounts for subsequent periods will need to be submitted.

 

Thanks, that clears that up. Golden share only if insolvent- do they have to publish a statement of the financial position if they get taken over before this is due? Ha a statement of position, surely that should show the basics of accounts for 2019, 2020 and 2021- Portsmouth's did.

The Business Plan will be interesting- there has been not much discussion by their fans on this subject. As I mentioned before, the owner or prospective owner said he would like to have what he called a sensible discussion with the EFL on points penalty and to sign players in Jan. Wanting a chance to stay up probably.

Edited October 26, 2021 by Mr Popodopolous

[Mr Popodopolous]

When looking for stuff on Wycombe suing them, or putting in a claim whatever I found the following post on a Brighton forum.

Spot on- nails it!

Quote

Hard to feel sorry for Derby fans. I occasionally glanced at their forum and know one in real life, and what was amazing how was boastful they were about their cheating. How Mel Morris held the EFL like a puppet on a string. How he knew every loophole and was some kind of superstar accounting genius, fiddling the books just the right side of legally.

They were proud of this behaviour and developed a victim complex when the EFL had enough of their blatant arrogance.

The whole plan was to break the rules so much and so flagrantly, by the time the EFL gathered evidence they'd already be basking in PL riches.

Normally, especially considering our history, I'd feel bad for the fans who have little if any say in how crooks run their beloved clubs. (See Wigan, Chester, Darlington et al). But this is different.

A couple of seasons down in League One will hopefully give them a little humility, Guendouzi style, and they can take responsibility for their part in endorsing the shit show they have helped to create up there.

The only ones I feel bad for in this are the SME creditors, who will get pennies on the pound under extremely harsh Covid conditions, and may even lose their businesses over unpaid debts. Meanwhile journeymen footballers on £10k's per week are "Super Creditors" and will likely get paid the lot.

Shocking state of affairs and all, completely, entirely their fault.

Interesting to know if anyone disagrees vastly.

Edited October 26, 2021 by Mr Popodopolous

[Davefevs]

7 minutes ago, Mr Popodopolous said:

Interesting to know if anyone disagrees vastly.

No

[Mr Popodopolous]

Agreed. I liked the bit in the post about learning a bit of humility in League One. I was hoping Mel Morris would have presided over a relegation and had to do so. He clearly could not.

Chansiri did and tbh after a rocky start to the summer, he has for now stuck with them.

Wycombe and their claim. @ExiledAjax and @Hxj

Any chance of success here? Not entirely sure who would be adjudicator or is it literally asking the administrators to add them to the creditors list- surely someone would need to uphold it in order from them ie to be deemed as football creditors for example.

Interesting post on their forum though, basically suggesting that they avoided producing accounts in order to avoid further punishment. Would help Wycombe's case surely that if true of course.

[Hxj]

44 minutes ago, Mr Popodopolous said:

Wycombe and their claim. @ExiledAjax and @Hxj

An interesting PR stunt.  Always keep Derby's failings and your suffering on the front page.

[Mr Popodopolous]

38 minutes ago, Hxj said:

An interesting PR stunt.  Always keep Derby's failings and your suffering on the front page.

No real chance then. Didn't really think so although it would good if somehow classed as a football creditor if only to wind up some of the idiots on their forum.

Talking of their forum, I nearly dropped my coffee in shock when a poster described some Wycombe fans as deluded. A psychoanalyst could have a field day with some of their takes. 

If it helps keep up pressure on the EFL to act correctly that could be useful. 

Back ON the field of play, assuming no nasty surprises on the deduction front, could theoretically be relegated the day we play them.

22nd April, Pride Park 3pm. Quite late in the season that. Bit of taunting from the away end feels in order certainly.

Edited October 27, 2021 by Mr Popodopolous

[ExiledAjax]

1 hour ago, Mr Popodopolous said:

Wycombe and their claim.

Honestly I've not kept up with it. I'd have thought it's a very long shot. Seems like it's not actually a claim in court yet either. Found this quote from Wycombe Wanderers' owner Rob Couhig here:

“I don’t know if we call it legal action. But a claim has been presented and is with all of the others.

“I don’t know if it’s secured or unsecured. It’s in the big jumble of things Derby have to deal with.”

Seems like it's just a claim against the administrators for now. That won't get them anything at all, but if they are thinking to go to court eventually then then shows some early intention. If they're saying they're some sort of creditor they'll get laughed out of the office I'd expect.

I'd also query whether they should really be sueing Derby at all. Yes Derby cheated, but you could argue that the EFL should have acted sooner and imposed penalties last season. That would mean that really they should be after the EFL or whoever dilly dallied last season.

Ultimately I suspect Wycombe will get nowhere.

[Hxj]

13 minutes ago, ExiledAjax said:

not actually a claim in court

My understanding is that Wycombe sent the Administrators an invoice.

[ExiledAjax]

43 minutes ago, Hxj said:

My understanding is that Wycombe sent the Administrators an invoice.

That is what it sounds like isn't. Perhaps with a nice letter asking if they wouldn't mind awfully adding them onto the preferred creditor list for £6m?

I suspect it's gone straight into the special filing cabinet for things from head office. 

[Hxj]

1 hour ago, ExiledAjax said:

I suspect it's gone straight into the special filing cabinet for things from head office.

I have a round one of those in the corner of the office 

But in an Administration spurious claims can get in the way of resolving matters, if the Administrators get it wrong they could be personally liable and on £6 million it could be expensive.

It may need to be adjudicated on by an EFL Disciplinary Commission as a dispute between two clubs, that could take a while.

[Mr Popodopolous]

45 minutes ago, Hxj said:

I have a round one of those in the corner of the office 

But in an Administration spurious claims can get in the way of resolving matters, if the Administrators get it wrong they could be personally liable and on £6 million it could be expensive.

It may need to be adjudicated on by an EFL Disciplinary Commission as a dispute between two clubs, that could take a while.

What would happen if they just ignored it? As in "trying it on, we won't even add it to the creditors list". Or I expect they would try and just stick it in unsecured creditor maybe. 

EFL Disciplinary Commission you say? That would be interesting...and in my view would be the correct body to adjudicate- not only for the veracity of the claim, but also as it is as you say a dispute between 2 clubs. Derby fans are unsurprisingly quite bullish and dismiss the claim, validity etc- only time will tell.

Edited October 27, 2021 by Mr Popodopolous

[Hxj]

2 hours ago, Mr Popodopolous said:

What would happen if they just ignored it?

They can't.  They would have to decide on the validity, which could depend upon the EFL DC.

The point I think is more in the PR and the time delay and hassle it could cause, clearly a football creditor of £6 million has a significant impact on the propsals and amounts needed to buy the club.