AnotherDerbyFan

@Mr Popodopolous My rough calculation process...

Using 2018 P&S losses as a base point:
                  £7,207,000

Subtract the stadium profit, profit on players, managers and amortisation from 2018:
                  £7,207,000 - £39,940,387 - £3,719,424 - £1,850,000 + £6,540,038
            =  -£31,762,773

Add on the confirmed amortisation and stadium rent in 2019:
                -£31,762,773 - 4,600,000 - 1,139,726
            =  -£37,502,499

Add on estimated profit on players (The club received fees for Vydra, Weimann, Jerome):
                -£37,502,499 + £4,000,000
            =  -£33,502,499 

Minus a rough estimate on change to wages:
                -£33,502,499 + £6,000,000
            =  -£27,502,499 

£4m off the stated £31.5m in March 2019.

Lampard joined Chelsea in July, so I didn't think the compensation would fall under 18/19, but 19/20 instead. Rumours at the time were about £4m.

2 hours ago, Davefevs said:

@AnotherDerbyFan do you amortisation of £25m in 18/19 or 19/20?  If 19/20...have you got access to accounts, or is this a calculation?

It's stated in the Decision document. £6.5 in 17/18, £4.6 in 18/19, £25.1 in 19/20. Page 30, Section 59

1 hour ago, Mr Popodopolous said:

Finally read the report in full!

Pride Park, this was at the time it was built one of many similar grounds built between mid 1990s-early 2000s. The construction cost in 1997 was quite cheap and cheerful. Wiki says £28m.

Which doesn't take in to account work completed later on. £28m covers initial build, then filling in of the corners.

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£3k per seat x 33k? Depreciation by 1/3 wasn't it then land value added in. About £70m? Granted the range was £3-3,500 per seat. 

On a DRC basis the final amout using those figures was £74.4m (missing £3m due to feeds and finance costs)
 

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I'm no valuer but some of his examples were puzzling! Leicester's valuation feels a very good comparable, Coventry? Stoke's ground was built in 1997 and isn't a much lower capacity.

Under £50m, £51m (was £60m until naming rights went) and under £50m respectively. Land value may well be cheaper in these places of course.

'Facilities of AG inferior to Pride Park'?? Don't see it myself! That's a laugh and a half. The lack of corners surely is a factor though, as well as lower capacity.

On the flipside, land value in Bristol exceeds that of Derby. The roof is a hypothetical and still hasn't AFAIK moved forward so irrelevant.

I can only assume you don't visit away grounds. When was the last time you visited Derby? 'Similar' ground such as Stoke, Southampton, Middlesbrough and even Swansea are considerably below the standard of PPS, despite being built to a similar style and by the same people - mainly due to the improvements made in the last few years.

Considerations for stadium valuation are:

• Corners
• Structure - cantilevered roof (this is what I was referring to, not the propose roof upgrade), with unrestricted views
• Facilities including hospitality, boxes, 'back of house' offices, club shop, restaurant, etc...
• Potential to expand
• Pitch composition and under-soil heating
• Concourse heating
• Superior seating (West Stand only)
• LED advertising boards
• Sound system
• Enhanced floodlights
• Media rooms and camera positions

Did you consider land area might differ? I could be mistaken but i'm fairly sure PPS is a larger land area than Ashton Gate

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The 2018/19 accounts and beyond will be the decisive factor, but under FRS 102 I am guessing it will be.

1) Oversight? Convenient! IF it was Chansiri and oversight, could well believe it given the mess he made if that!

The detail didn't seem to be that much different than other clubs. It's an simple oversight to not describe it in full detail. It only took the EFL the best part of 5 years from when we implemented it (with permission) for it to be brought up. 3 years since the accounts were released.

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2) Were the first, I believe. I've a strong view on the issue in general- UEFA rules explicitly exclude fixed asset disposals from FFP so that feels the best approach.

We aren't in a UEFA competition. Not sure why you keep bringing their rules up to imply we should be following them instead. You aren't advocating using their 30mEUR limits instead of our £39m. As things stand, the EFL rules allow it.

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3) What came first? Again, convenient!

One came as a result of the other. A clause in the sponsorship contract which allowed us to negotiate a better deal if we sign a 'star' player.

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4) A grubby financial issue most certainly. How can registration be held if he's been sacked? I hope he plays on and  wins just to prove a point. 

Keogh appealed the sacking. Until the case was closed the club must keep hold of his registration.

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5) You expressed your liking for the rules in point 2 and alluded to them in point 1.

If an owner has cash flow problems he shouldn't be permitted to seek a loan. You're just asking for financial ruin in current circumstances.

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Rules are rules and I'd have to reread the article but a rule is definitely out there somewhere about investment in more than one club. If clubs complain, are EFL not duty-bound to investigate?

Nothing about loaning to multiple clubs, hence nothing was made of the same company loaning to Southampton and Sunderland. The issue is down to having a significant share of multiple clubs, which only becomes a concern if Derby and Sunderland default on the loans.

49 minutes ago, Mr Popodopolous said:

On a side note, the legal and bias claims being dismissed so readily is good on two levels.

IIRC, they tended to be dismissed I think in the Sheffield Wednesday case too.

1) Means that the EFL are well within rights. 

2) Could it mean that a Derby legal claim against the EFL would be rather ill-advised? One of the sensible posters on Dcfcfans would appear to think so!

On point one, it's unclear if there is a statute of limitation that means it must fall within the 5 years ie T-2 to T+2 (assuming the stadium sale within 'T' which it was) or if there is none at all. If it's the latter that would be excellent.

I can't see us pursuing any legal case based on the claims already made. There may be a case of us pursuing damages due to missing out on investment, being put under a wrongful embargo, missing out on recruitment, and potentially reduced sponsorship. Given the club statement about all clubs being financially punished due to just a few clubs pushing for a penalty, I can't see us dragging things out further and causing more financial reductions to clubs.

57 minutes ago, Hxj said:

If you apply my earlier comment on appeals generally, I agree that the EFL have no hope of succeeding on appeal.

As to the revised methodology the revised wording, plus the actual measurement periods will be important.  l still expect the club to fail 2020/21 by a large margin based upon the information available.  The club is clearly burning huge amounts of cash, and whilst not a measure of profit it is a good indication that things are not healthy.

If such a revised system is in operation it will likely depress transfer values as clubs have to deal with a lack of income and that impact on losses for some time.  This could have a significant impact on the club as the residuals will drop as well, all of which will need to be reflected in the relevant accounts.  Other clubs, which use a straight line method, will be significantly less impacted by a drop in residuals.

 

Just noticed the 19/20 amortisation line... £25m up from £5m the year before. My newly revised 19/20 P&S estimate is about £35m! OUCH! 

I don't think we're burning through anywhere near as much cash now. More likely accounts catching up with reality.

20 minutes ago, Mr Popodopolous said:

The stadium valuation is hard to credit once looking at all the others. Similarly, Ricoh Arena which has some similarity in profile to Pride Park, £60m- that's £60m inclusive of naming rights. Once that contract ended, it fell to £51m.

Leicester's stadium, East Midlands and similar capacity which is inclusive of naming rights falls below £50m. £45m perhaps, would have to double check. They have events there too, sure they've had concerts at Walkers Stadium eg.

Pride Park is worth all that despite no enhancement via naming rights.

The Disciplinary Commission disagree with you. For example, The EFL's 'expert' arrived at the £50m valuation by scaling up costs of stadiums for Morecombe, Chesterfield, Clochester, MK Dons, Doncaster, Shrewsbury, and Burton. He failed to note a variety of differences: built corners, possibility to expand, roof, quality of facilities. Somehow, the 'expert' concluded PPS was "bog-standard", and further devalued the stadium by using average attendance instead of capacity.

DRC is usually calculated by multiplying the cost per seat by capacity to attain a new build cost. This figure is then reduced by a depreciation factor to reach the DRC value with land value added on. The panel concluded that anything less than £3000 per seat would be considered basic. As PPS is certainly above basic, £3k is the very minimum that should be used. Guess what... that's the exact figure JLL used to reach the £81.1m value. If you disagree with PPS not being basic, then you need to visit more grounds.

The rebuild of your own stadium cost a reported £40-45m, with a capacity of 27,000 - equivalent to cost per seat of £1.67k. However, it was a replacement/refurbishment of the original stadium meaning it was the equivalent to £2.84k for a new stadium. Facilities of your stadium are inferior to ours, and you haven't filled in all corners. This supports the claim that £3k for ours is correct.

20 minutes ago, Mr Popodopolous said:

Amortisation, seems odd. HOWEVER, if it is all accounted for then maybe. 

All accounted for, so nothing to get your knickers in a twist over.

20 minutes ago, Mr Popodopolous said:

With respect to Mel Morris. He thinks the rules or spirit therein are not for him. Every trick in the book.

1) Amortisation- not clearly disclosed. 

2) Stadium sale.

3) Rooney sponsor.

4) Keogh being sacked but Lawrence and Bennett staying. Hope Keogh wins his case!

5) Possible questions over the loan arrangements.

As for Stephen Pearce. Appointment of a fox to a henhouse board would be rather silly.

Executive from such a club on the board for betterment of all feels similar!

Not so much him as his club that he represents. I'd feel less than happy were I Ashton having to deal with him, that's for sure.

FFP 4 years? Interesting. Suppose it emulates UEFA in a sense.

Seems like 2 years of normal then last and this season averaged into one. 

1. Oversight from the club not to clearly define it. It's all out in the open now, and there are clearly no issues with it.
2. Rules say it was acceptable. We weren't alone in doing it.
3. Are you saying recruiting a player of Rooney's calibre means we should increase our sponsorship income? Bizarre that you think increased exposure shouldn't mean more sponsorship. Comes across more like jealousy of not having the pull we do.
4. Most likely a financial issue, but we don't know the full facts. At the at the end of the day, Lawrence and Bennett still have value and could/can still perform the job they're paid to do, whereas Keogh couldn't. With Keogh joining MK Dons I think that's the end of the matter. If the case was still ongoing, we'd still hold his registration and he wouldn't have a club.
5. I can't believe you're trying to argue against a club pursuing loans to cover losses given the coronavirus circumstances.

Perhaps if Pearce was on the board much earlier the EFL would be in better shape now. He's clearly well respected by most clubs, hence why he's in the position he is. The fact he's clever enough to see where the rules allow a club to maximise it's potentially shouldn't be considered a bad trait. Other club's follow his lead - they copied our stadium sale, and it's only a matter of time before clubs copy our amortisation policy. There's little benefit in copying what everyone else does, as without parachute payments, it's unlikely you'll earn promotion. Every club should be continuously looking at ways of doing something better than they already are.

8 minutes ago, Davefevs said:

Re the bold bit...does Morris ever adjust asset values down during a players time here, ie is there ever an amortisation line in the accounts?.  So for example you buy Tom Lawrence for £5m.  Is he still sat at £5m?  If so, would you need to sell him for £10m to make £5m “Transfer Profit”?

Asset values are updated every 6 months. Some of the considerations are age, injury status, and favourability with the manager. I'd be surprised if there's is no amortisation for any player, but for younger players most likely it will be a very small amount. In the case of Lawrence, he still has 2 years left on his contract so still has a high book value of more than £4m (but less than what he's cost us so far). So to make the £5m profit a sale of £9m would be required.

49 minutes ago, Hxj said:

There were the four main issues highlighted in the decision from my perspective:

1.   The EFL appointed 'Experts' who frankly were not up to their roles.  An 'academic' accountant and a partner in a four partner practice would not be my choice.
2.   The EFL jumped to the main charge too early, which caused them difficulties.  They should have got an adjusted stadium valuation agreed by the EFL Board first as a first step.  
3.   All of DCFC's and Morris' rants claims around bias and injustice were totally dismissed with minimal words. 
4.   Derby will be back in front of the EFL Disciplinary Commission very shortly based on the current rules.  If the FFP losses exceed £12 million for 2019/20 the club is in default, if the combined losses for 2019/20 and 2020/21      exceed £5 million (unless a profit is made in 2021) they will be in breach for that year as well.

 

1. The EFL can't appeal based on them not choosing good enough 'experts'.
2. Again, the can't appeal based on that. As was proven, based on their 'expert', their stadium valuation of £50m was far too low.
3. I was surprised the legal and bias claims were dismissed so easily. The fact we didn't even have to rely on them, with the facts doing the talking just shows how wrongful the charges were. I also expected comments on the lack of outside investment and player recruitment was significantly impacted as a result.
4. Confirmed P&S profit/loss from what I can see are:
   • 2017 = -£13.407
   • 2018 = £7.207
   • 2019 = -£31.517
   • 2020 therefore must not exceed £14.69m. My revised estimates suggest we are about £5m over that. However, we would have sold at least one player by now if that was the case.
   • Seems clubs approved a new P&S rule last week. We're moving from a 3 year cycle to 4 years. Losses for 19/20 and 20/21 are averaged (presumably to minimise the coronavirus impact) and use with the 17/18 and 18/19 seasons. It means Our combined losses for 19/20 and 20/21 therefore must not exceed £29.38m. I'm not sure if this replaces the 2020 or 2021 P&S period.

Here's a summary table of the losses based on the Decision document:

14 minutes ago, Mr Popodopolous said:

Thought about it a bit, and I think the aspect I dislike most about Derby is Mel Morris.

A bowling/cue ball of an owner who thinks he's bigger than the game or at least the League in which his side play. Quite clearly a horrible man with a sense of entitlement.

In short, zero redeeming features.

Fair few gobshites on their forum but it all stems from him tbh, a fish rots from the head down after all.

So which aspect of these charges should we have been found guilty of?

You dislike Mel? Seems to stem back to Mel pushing for a better TV deal, to benefit all clubs within the EFL. That a bad thing?

49 minutes ago, Mr Popodopolous said:

The report so far makes for interesting reading. Don't think EFL come out so well. 

Bit of a way to go on it. Certainly don't see good grounds for the one eyed jubilation on Dcfcfans.

In conclusion, I still consider Mel Morris to be a fairy entitled disreputable (albeit legal) *****. Appears to have a bit of a persecution complex too.

Stephen Pearce and good governance don't appear to go hand in hand. Get him off the EFL board. 

Derby are a scuzzy club throughout, and their fans have all the balance and grace of that King who lost his eye. However in the Kingdom of the blind, one eyed man is King!

Charge 1 - Stadium
The independent panel reaches the conclusion of fair value. £81.1m falls inside their concluded fair value range of £74.4m to £89.5m. 

Charge 2 - Amortisation
Concluded that the policy wasn’t made clear in the accounts. Review of the policy actual revealed it is acceptable and meets the relevant accounting standards. 

The EFL don’t have a leg to stand on any appeal. Especially when you look at one of their key experts, Mr Messenger using stadiums such as Burton, Shrewsbury, Colchester, Chesterfield and Doncaster to draw accurate comparisons. He got mixed up between capacity, number of seats and square meters!

2 hours ago, Mr Popodopolous said:

Okay daft nicknames aside, I do think Pulisball a legitimate tactic. Read up on it, he did really rile his team up when at Stoke ahead of games vs Arsenal. There's an article on it online.

It is also worth reading up on your auditors. How can we be guaranteed of arms length impartiality?

I still have doubts about about the valuation and how the proposed annual rent fell from £4.16m to £1.1m. 

The profits method of valuation is debatable given that a lot of football stadia run at a loss. 

On the other hand the above could well be acceptable IF commercial revenue doesn't flow to the club. Or the rent or price should be restated- can't have it both ways.

Profits method was used for obtaining a value for the sale, but DRC was used for P&S, later to be revised up to be equivalent to the profits method. The decision from the hearing, after consulting with the credible EFL valuer, was an acceptable DRC range of £77.4m to £89.5m (mid value of £83.5m). Kind of suggests the £81.1m figure was also acceptable

£1.1m figure is based on 100 days of use a year, proportional to £4.16m. I’m surprised that’s been passed, but must mean reduced non-matchday income for the club as a result. 

11 minutes ago, Hxj said:

From the same place as you I think

 

Your guess was £52 million mine is £50 million

Although we now know fromthe decision that the FFP figures for 2018 was a £7 million profit and predicted for 2019 a £34 million loss!

I can see points deductions for 2019/20 and 2020/21 with all those intangibles to deal with.

Without knowing the 18/19 amortisation it’s hard to make a judgement on the following years. I’m willing to bet the P&S total from 18/19 and 19/20 will be close to the £50m figure we previously estimated. I am a bit more concerned about how close we’ll be for the 3 years to 2021 though

1 hour ago, Mr Popodopolous said:

Calling one or two on their site pillocks a bit uncalled for though I consider 'Dopey David' not bad as far as nicknames go!

Dopey David on DCFCFANS

"Sooner we can get out the Football League the better."

I quite agree. Suspension of membership or expulsion for as long as Morris remains would be great! See Dale at Bury as an example.

Gee Screamer!!, interestingly we are cited as a comparable in the report.

Land value in Bristol surely is worth more than in Derby. How Pride Park worth a lot more than Ashton Gate is puzzling.

Ellafella "Heads need to roll at the EFL". 

Quite agree. Stephen Pearce, will most clubs appreciate his ongoing presence?

Hi Dopey D. Sure you're reading. 

Opinion on auditor being Derby fan? Lot of interesting stuff out there on them. Might also add, Pulis sent out Stoke really wound up vs Arsenal especially so it's a legitimate tactic in football.

Grow up

2 hours ago, Hxj said:

There is nothing wrong with the loans from Rams Investment Limited (Gabay) and MCD (Dell), they are both third parties.  The amounts, unless converted into equity, cannot be used for FFP purposes. 

Having lent all that cash the lenders have security with the charges over all the assets of the companies, that is not unusual, and no different from the arrangements for a house mortgage.

It continues to look like Morris has had enough though, he is no longer funding the club.

As to the disciplinary panel decision best to await a copy of the decision and the outcome of any appeal before commenting.

A quick look at the accounts for 2018 show that the position is still dire.  At 30 June 2018 the football club lost £26 million before the stadium transfer, and there is no indication that matters have improved in 2019 and 2020.  They also had £50 million of intangible assets on the balance sheet, those will need to dealt with through the Profit and Loss account at some point in time.

So let's say £25 million a year loss for 2018, 2019 and 2020, so £75 million, less the profit on disposal, gives you £35 million.  Disposals of players will not benefit the club to the same amount as others for the reasons already stated.

 

Not sure how you've reached that conclusion. Since that period we've seen a drastic reduction in wages.

Out: Palmer (1/2 season loan), Winnall (1/2 season loan), Russell (1/2 season), Vydra, Weimann, Shackell, Hanson, Jerome, Baird, Ledley, Bent, Thomas, Nugent, Butterfield, Blackman, Pearce, Johnson, Bryson, Thorne, Carson, McAllister, Keogh, Olsson, Anya, Huddlestone, Martin
In: Waghorn, Marriott, Jozefzoon, Holmes, Malone, Evans, Bielik, Shinnie, Rooney, te Wierik, Marshall, Clarke (loan), academy lads

Even using conservative estimates for wages that's at least a £15m saving. Income (excluding impact of coronavirus) will have also increased in that time with a notable increase in sponsorship (thanks to Rooney/32Red), greater TV income (new TV deal with sky, a couple extra games on TV, and a big increase in RamsTV subscriptions), and general increases elsewhere.

The next two sets of accounts to be released won't be pretty - I wouldn't bet against c£25m losses in those years  (I estimated abour £24.8m and £27.2m) due to amortisation finally catching up with us from the 2015 and 2016 years. But, we're past that now and on very safe ground financially. From a P&S perspective this will be the toughest year with us just scraping the right side of the line. Thankfully, Mel's long term investment is starting to bear fruit - more minutes given to former academy players than any other club last season, and close to 75% of players used so far in pre-season having been involved in the academy process at some point (mostly youth level, a few U18 signings, and two U23 signings).

@Mr Popodopolous you seemed a lot more reasonable in your views up until yesterday. It may also upset you now Villa will almost certainly avoid punishment when they drop down. Your anger should be directed at those at the EFL who are responsible for this mess.

17 hours ago, Lrrr said:

Has any justification been given for next season regardless of who handed out the punishment 

Something song the lines of the date of the hearing was set before lockdown. This meant it would have originally been after the 19/20 season ended. The intention was always for the (potential) penalty to be applied in the 20/21 season, and it would be unfair for it to be brought forward because of a delay to the season out of everyone’s control. 

On 28/07/2020 at 13:17, Mr Popodopolous said:

Sub £10m for the 3 years to June 2018? I can agree with that- is worth noting top that based on the Birmingham precedent clubs found guilty seemed to get a business plan and reset £13m targets. Could be owing to the way in which Birmingham's expenditure was increasing at that time but the Judgement did seem to reset losses with individual £13m targets.

Yes, the 3 years to 2018. Normally, a club should be punished the season following that 3 year period, with the business plan part of that. If found guilty, that should have been in the 18/19 season. The earliest our potential penalty can be imposed is almost certainly the 20/21 season. It just so happens that our actual business plan has tied in nicely with what the EFL's business plan probably would have been anyway - the higher wage earners have left, and we've promoted youth. With a couple more expected to leave, we're currently looking at going into next season with only 15 over 20's in the squad, with only 3 or 4 expected to come in. One of those 15 hasn't even played a professional game yet.

I don't think we're far off the £13m annual target anyway.

On 28/07/2020 at 13:17, Mr Popodopolous said:

You do seem to have a thriving academy, something that can count in your favour with respect to FFP.

An issue would be the profit on disposal. When did it switch to residual value? That if applied correctly and consistently can markedly reduce a profit on disposal.

Straight line seems alright with profit but would have affected the amortisation in prior years.

Without checking, I think it was introduced in the 15/16 season. It's been long enough for the 'advantage' gained from reduced amortisation and profit on disposal to have balanced out. A historical correction would result in us gaining an advantage in the immediate present - I think this is going to be a bit of a sticking point with the verdict. I'll be very surprised if we aren't forced to change our amortisation policy in line with others, but it needs to be done in such a way that we don't gain any advantage.

On 28/07/2020 at 13:17, Mr Popodopolous said:

Also are you using Sevco 5112 or the club? For FFP it should be the latter. 

Club. For the 3 years to 2018 there isn't much between the two (once you account for our c£6m annual academy spend), although it would result in us being a lot closer to the limit in the following periods.

On 28/07/2020 at 13:17, Mr Popodopolous said:

I am increasingly coming round to the view of zero punishment for both clubs. The reason for the verdict could be diverse:

One of innocent, not guilty, case not proven or blame/error on both sides.

All of which would lead to no deduction, I blame the EFL (aka Harvey) for not acting more expeditiously back in 2018 with all but Birmingham.

It may be my own bias, but I could see SWFC getting punished whereas we do not. Them including the stadium sale in the 17/18 accounts seems wrong. Whereas us having a stadium valued roughly in line with inflation and accounting for stadium improvements looks fine. The amortisation policy being approved every year since 15/16 also looks difficult to penalise. I think the EFL executive(s) part in this will see at most a slap on the wrist for both clubs though.

On 23/07/2020 at 00:34, Mr Popodopolous said:

Interesting stuff.

They IIRC claim they were relying on 'legitimate expectation'. Sheffield Wednesday especially, Derby intimated sign-off. 

Would've been very difficult indeed for both clubs to have come up with another solution.

 

Derby would have been looking at a sub £10m overspend for the period ending June 2018 (without the stadium sale). This could have been covered by player sales, such as selling Vydra earlier in the summer window.
This would have likely meant a very touch and go 2019 period, but we wouldn't have signed the players we did if it looked like we'd fail. We also wouldn't have gone out to spend as much as we did on Bielik this season, probably wouldn't have signed Rooney, and could have sold more of our youth players.

18 minutes ago, Mr Popodopolous said:

Well this is interesting, appears that such a large loan will be cleared soon. Which begs the question, why take it out in the first place? Wonder if anything will appear on CH.

Of more interest (and relevance!) to this thread... 

Does beg the question as to why the EFL seemingly unable to run more than  one concurrently!

I believe it was somewhat related to a cash flow issue, with a large chunk of Mel's 'worth' being tied up in assets. It could also explain the late payment of wages at the end of December.

I don't think Ryan's story is quite correct either...

https://twitter.com/GabayHenry/status/1281607594776432640?s=20

The charge itself doesn’t concern me, although that may be down to not fully understanding the purpose of it. I’m sure some more details will eventually come out.

It’s certainly not a last throw of the dice and a gamble on promotion. I’d say the last real gamble was the Rowett season. We failed, and the message since then has very clearly been to slash the wage bill and give the kids a shot. It’s part of the reason why Rowett jumped ship when he did.

Mel’s stated aim is for the starting lineup to be 50% academy on a consistent basis. You can’t have that aim and also have an immediate target of promotion at all costs. I doubt many clubs are using academy graduates as much as we are. Yesterday, 4 started, 2 came on and another stayed on the bench (plus 1 U23 signing). 5 started the Preston game with 1 remaining on the bench (plus 2 U23 signings).

Financially, we’re finally past the mess caused from the transfers in 2015 and 2016. We’re in a much more sustainable position with estimates suggesting the wage bill is now equal to our income, with room to improve that further without weakening the first team squad. Transfers funded by outgoings - Bielik’s fee more or less equal to what we received for Lampard (and his team), Thomas to Barnsley and Delap to Man City. 

8 hours ago, Mr Popodopolous said:

Indeed. 

What happens to the charge over Pride Park if he did go to prison, I wonder.

Genuinely interested in @DerbyFan and @AnotherDerbyFan and their take if they still read this site. 

I wonder if the reason Mel Morris has seemingly been scrambling for investment is to try and pay down the charge over Pride Park,  a race against the clock.

Or maybe they desperately need promotion and promotion this season to achieve the same goal?

Genuine question.. what does a ‘charge’ on the stadium actually mean?

1 hour ago, Mr Popodopolous said:

So they've disposed of the ground held at cost- even though as recently as 2017 it was held as Investment Property under Fair Value, and eliminated the depreciation- suddenly restated in 2017/18 accounts to Tangible Fixed Assets as cost- which was about £20m or so more than when it was Investment Property as held at Fair Value.

My concern is that it is classed under Other Loans and the category in turn was Debtors but yet the profit on disposal in the here and now was stuck in the P&L- all seems a bit...curious.

How that fits with FFP as well, is a puzzle, to me anyway.

The stadium was sold so appears on the P/L. However, the money doesn't have to change hands straight away.

On 04/03/2020 at 11:31, Mr Popodopolous said:

@AnotherDerbyFan

I'm interested in why you're rallying with Villa on this- you've been charged post Investigation, and you should for purposes of equitable treatment want some kind of Investigation for them on their return to the Championship over this 3 year period and this ground sale and leaseback, whenever that might be.

Investigation and guilt/charge are two very different concepts of course. However I'd suggest the EFL have the right to investigate that 3 year period.

In general.

Villa Park, if Other Loans Receivable at £56.7m refers to that, appears surely that it might be getting paid for off the back of loans- could be that it is paid for via loans from the owners but has to be paid back which is curious.

How does FFP at Championship level deal with this?

That's unique among the 5 btw.

Derby and Reading had it appear in their cash flow statement the year of sale.

Birmingham and Sheffield Wednesday had it appear in Other Debtors.

Both of these methods imply that the money will be going to the club either now, or later and it will be a true transaction. Price or rent terms or similar are a different matter, some seem more realistic than others.

This though implies that the cash will be loaned to Aston Villa over god knows what time frame- loaned, not paid for a transaction- loans maybe written off sometime in the future but valuation aside, I struggle to see how this is compatible with a £36m profit on disposal in the here and now!

@Coppello @Drew Peacock @martnewts 

You all are strong on accounting IIRC, any ideas??

How am I rallying with Villa? I only pointed out that UEFA rules have no relevance to Championship clubs, with the exception of fluking at cup win. I don't believe I've commented on whether Villa should or shouldn't be investigated. However, I'l give you my view now. The EFL had the opportunity to investigate and punish Villa before they officially became a Premier League Club. Now they're in the Premier League, it's down to them to investigate and punish if necessary. If Villa go down this season, then the EFL can investigate them again for the relevant 3-year rolling period (18/19, 19/20 and  projected 20/21). If they find some wrong-doing in relation to their stadium sale in 18/19, then I'd support a punishment for them. If Villa survive relegation this season but go down in the future, then I would oppose the EFL investigating Villa for selling their stadium.

Regarding the likes of Derby, I disagree on the EFL's decision to renege on the EFL Executive's decision to approve the stadium sale, amortisation policy, and all FFP/P&S accounts, unless the club were not as transparent as they claim or there was some other 'improper' practice.

Your comment regarding deducting 50 years lease cost off the value is another no go. Why should a club selling it's ground at it's book value be penalized for selling it? It would prevent an owner doing it purely for P&S purposes, but punish those who have a valid reason for it. Let's say an owner wanted extra investment into his club. Selling the stadium 'to himself' would make it more affordable for the investor to buy into the club whilst offering a safety net regarding the stadium to the owner and the fans.

@Mr Popodopolous Why do you keep mentioning UEFA rules when they only apply to teams participating in UEFA competitions? Villa don't play in a UEFA competition so they don't need to concern themselves with their rules.

3 hours ago, Mr Popodopolous said:

One other interesting thing about Derby that I just discovered- this is quite the conversion!!

A very convenient conversion?

It appears to be someone at the DM misreporting the truth. Our CEO (former CFO), who is on the EFL Board, was chairing discussions about P&S last week. One of the talking points was the £20m cap. Rather than leading the push, we participated in the talks no more than your own representative on the EFL Board (Mark Ashton).

It may seem hypocritical of us to be pushing for tighter control of wages given we've been charged with breaching P&S, however, since 17/18 we've actively been working on reducing wages and other costs. So much so, that we've named 11 academy graduates in our matchday squads this season, with only Forest giving academy graduates more match time.

We've seen the departures of a lot of high earners: Jerome, Shackell, Weimann, Vydra, Thorne, Johnson, Nugent, Blackman, Butterfield, Pearce, Bryson
Replaced with cheaper alternatives: Malone, Evans, Holmes, Jozefzoon, Marriott, Waghorn, Shinnie, Bielik, (and Rooney).

4 hours ago, Mr Popodopolous said:

Thanks- that makes sense. Like I say it all pretty well evened out over the 2 years anyway so no real big deal.

For transfer profits perhaps, but consolidated accounts can be used for P&S purposes- often are.

An issue I've read about online a while ago was did Derby benefit from e.g. deductions on Infrastructure spending, youth, community etc in the club accounts but sticking the costs away in Sevco 5112 or elsewhere?

Think Kieran Maguire a while back also posed the question of whether Derby benefited from certain revenues in the club accounts but the costs for these were stuck in the consolidated ones. Unsure how for example as it was published on your site, a £9m P&S loss was obtained in 2015/16. Putting aside the fact that debt cancellations doesn't count towards FFP in terms of either profit or income, so the Exceptional Operating Income is a matter of debate, for FFP purposes.

I'd have to look in depth but I don't see how a debt cancellation should count towards income as such.

As for the other point.

This was surely included in the consolidated accounts but the club ones? There's Additions but what about Disposals?

Academy spend and infrastructure improvements are not included towards P&S. Disposal of those improvements is included. Our academy spend exceeded £6m a couple of years ago and may be approaching £7m now (£4.5m+ on youth development, plus extra on staff and facilities). By the time you've taken the exclusions out of the consolidated accounts, you're left with something very close to what the headline figure is in the club accounts.

On 28/02/2020 at 13:32, Mr Popodopolous said:

Looking back at past FFP issues, I still struggle as to how Sevco 5112 Limited accounts for 2015/16 and by extension 2016/17 and Derby ones show different profits on player sales/disposal of player registrations.

The Reporting Periods did differ ie Sevco 5112 accounts to 31st August 2016 to reflect that Mel Morris completed it all ie the takeover around that time, but was then reset to June 30th inline with the club- but I wonder if that could've helped to bolster their profit in a given period- will post the screenshots later. 

Also in 2017/18, Derby used Residual Values- but did Sevco 5112 use it to 31st August 2016? The two figures do balance in terms of profit on sales over the two years, pretty much but it's an interesting comparison.

EDIT- In fairness, they did seem to in Sevco 5112 accounts to 31st August 2016- but it's a funny one and only a small part of the jigsaw admittedly.

We sold Hendrick to Burnley in August 2016. Hence why the £10m profit appears in the Sevco accounts (period ending 31 August 2016), and not in the club accounts (period ending 30 June 2016). 

Use the club accounts for P&S purposes. The P/L figures in those accounts are less than £1m out over a 3 year period, yet vary much more in the Sevco accounts.

8 hours ago, Mr Popodopolous said:

I'd assume that for that to occur- and it didn't in the Adams case, either:

a) The accounting period would have to be moved and probably with prior consent of EFL for FFP purposes?

b) There would need to be active proof and demonstration of the proof of a prior or ongoing agreement for this transfer to have occurred from before the date.

I can't think of many other cases where it would- or more likely should- be allowable. I know that Tom Ince was sold by Derby in on 4th July 2017 but included in 2016-17 accounts even though their accounts at the club level ran until June 30th 2017.

However at the SEVCO 5112 level, the accounts ran until 31st August 2016- whereas they ran for Derby County until 30th June 2016.

I don't have time to delve into the figures at hand right now but an interesting aspect is that in one of the years- possibly 2015/16- the Sevco 5112 Limited accounts showed a profit on transfers substantially above that of Derby County for the same period!

Having said that, that could be partially down to takeover and additionally, it's not like the aggregate sum of the two seasons differs in any vast way, possibly not at all.

We sold Ince on the 4th July 2017, and Hughes on the 24th. The sale of one was included in the 16/17 accounts, the other wasn’t.

There are suspicions Weimann’s transfer on the 3rd July 2018 will fall under the account period ending 17/18?

10 hours ago, Davefevs said:

Nice posts @Delta and @Mr Popodopolous

if we ignore the stadium sale, a £29m loss offset by £4m Transfer profit - so a £25m loss, doesn’t look like the best attempt to stay within the business plan.

I do agree to an extent re EFL not forcing a player to be sold, but was the stipulation by Feb 1st or by 30th June.  It happened on 1st July....after the end of their financial year.  If you’re going to allow clubs to say “well we sold him eventually” you might as well not have rules.  What is deal fell through, no guarantees.  We sold Kelly in May to not just let Bournemouth get it done before further interest, but to improve our accounts.  Clubs need to think smarter!!

Will be interesting to see how this one pans out.

Depending on specific circumstances, a sale on 1st July can still be included in the accounts in the 'previous year'