The Championship FFP Thread (Merged)

[Mr Popodopolous]

I believe Derby despite an £81.1m gross transaction have no taxation liabilities on their £14m "profit" in 2017/18 reporting period/season- owing to offsetting it vs past losses.

Yep, I was right- they paid no tax in financial year 2017/18! Maybe I got the reason a bit wrong but seemed they paid zero tax last season. Possibly because Sevco 5112 their holding company made a small loss even after the transaction.

Edited June 3, 2019 by Mr Popodopolous

[DerbyFan]

28 minutes ago, Mr Popodopolous said:

Yeah- the worst I have seen certainly.

I hope they come back down, straight back down and get a points penalty either this season or held in reserve for their return- think EFL FFP rules suggest historic breaches can be punished- UEFA going after Man City sets an interesting benchmark in this respect.

Well quite.

There was an excellent window of opportunity to close this loophole- they might actually do it in any case to spend more still in PL?

13th May 2019 was when name was changed for this, therefore paving the way for it to be done- EFL and the useless bastard Shaun Harvey asleep...again! Ample time to change the rules between Derby and that.

On the Derby front, the company who purchased it was Gellaw Newco 203 Limited- Companies House says it was incorporated on 18th June 2018...EFL should've been wise to this at the time, the transaction would have been done in 12 days therefore as Derby's accounts ran until June 30th 2018.

I also notice that NSWE Stadium Limited- previously known as Recon Football Limited until 13th May 2019 had an "Audit Exemption subsidiary accounts" . Could all be legit and not suggesting any wrongdoing- seems applicable with company and accounting law etc.

One more note on Derby.

https://www.insidermedia.com/insider/midlands/stadium-transformation-plan-revealed

This, combined with commercial revenue showing its potential, it being completed in 1997 and and Mel Morris wanting to make the most of the commercial facilities minus depreciation is why I believe it could have risen from £20-21m in 2013 to £40m or so in 2017/18. Never in a million years what it went for though!

I have no idea why you keep referring to the stadium valuation being £20-21m in 2013, and therefore doubling to the £41m book value at the sale and then doubling again to the sale value of £81m. The stadium was valued in 2007 by King Sturge LLP at £55m. The £20-21m you mention is referring the historical cost of the stadium. Look back through further sets of accounts and you will quite clearly see this stated. It was revalued in 2013 'as required under FRS 11' by Jones Lang LaSalle, but unlike with the 2007 valuation there is no mention of said value in the notes, and the book value did not change, apart from the expected depreciation.

[Mr Popodopolous]

40 minutes ago, DerbyFan said:

I have no idea why you keep referring to the stadium valuation being £20-21m in 2013, and therefore doubling to the £41m book value at the sale and then doubling again to the sale value of £81m. The stadium was valued in 2007 by King Sturge LLP at £55m. The £20-21m you mention is referring the historical cost of the stadium. Look back through further sets of accounts and you will quite clearly see this stated. It was revalued in 2013 'as required under FRS 11' by Jones Lang LaSalle, but unlike with the 2007 valuation there is no mention of said value in the notes, and the book value did not change, apart from the expected depreciation.

Okay then, I don't see how it could have gone up to £81.1m...maybe doubled and doubled again a technical error from me but the profit should be disallowed for FFP purposes owing to it being a related party. Only way it should be accepted IMO is if you had sold it to a bank, or a property developer or similar unrelated to your club, to your owner, to your owners family, to any other companies owned by your owner, your owners family, your owners business associates to name a few- indeed UEFA regs on this offer provision for this very scenario. 

EFL should have hired their own independent valuer also. As they should for any other clubs who have done it.

I think you've made the move in part to buy time for contract expiries amongst other things owing to your fairly unusual model- lot of players out of contract will save on wages but will take a hit as you amortise differently.

To me, any club doing this unless it is to a true and genuinely verifiable third party are cheats. Pure and simple- cheats.

If I had my way, you and Aston Villa would have been demoted from the playoffs and Birmingham would have received their deduction in-season, as the rules seem to allow for so they would have got the relegation that they merited in 2017/18.

In fairness, with yourselves there are mitigating factors- you sold Grant-Christie-Hendrick-Hughes-Ince-Vydra-Weimann in 3 seasons. 4-5 first teamers, 2-3 squad players?

Nonetheless, I guess you needed to sell more or to cut costs further on wages or sales- hope the EFL have a vote and punish clubs who did this if the vote wins. You are in a separate category to those who complied though and those who broke FFP and made little efforts.

Edited June 3, 2019 by Mr Popodopolous

[DerbyFan]

23 minutes ago, Mr Popodopolous said:

Okay then, I don't see how it could have gone up to £81.1m...maybe doubled and doubled again a technical error from me but the profit should be disallowed for FFP purposes owing to it being a related party. Only way it should be accepted IMO is if you had sold it to a bank, or a property developer or similar unrelated to your club, to your owner, to your owners family, to any other companies owned by your owner, your owners family, your owners business associates to name a few- indeed UEFA regs on this offer provision for this very scenario. 

EFL should have hired their own independent valuer also.

I think you've made the movie to buy time for contract expiries amongst other things owing to your fairly unusual model- lot of players out of contract will save on wages but will take a hit as you amortise differently.

To me, any club doing this unless it is to a true and genuinely verifiable third party are cheats. Pure and simple- cheats.

If the valuation was £55m in 2007, then surely it's entirely possible it could have gone up to that amount in the 11 years from then to the sale? There has also been a lot of work done to the stadium in the last few years, that while not increasing the value by that amount solely, does still add value.

There has also been talk locally, and I see Sky picked up on it in a recent article, of a roof being added to the stadium, to create a better venue for events. Sky Article

Derby is without a proper events venue at the moment, our Assembly Rooms has been closed for over 5 years now due to a fire in the plant room, those years since have seen a lot of wrangling over whether to replace it with something more suitable for larger events, at a higher cost, or to refurbish what is there, which is essentially too small, at a lower cost. It has been decided that it will be refurbished.

We have an 'arena', right next to the stadium in fact, however, this is a velodrome and completely unsuited for events outside of this, there have been a lot of recent complaints about the sound quality in the (small) fixed seating block above the track, but it has been a case of making do, for now.

I believe all of this may have influenced the decision to look at using the stadium as an events venue, and may have influenced the purchase by Mel Morris, to make sure this happens for the sake of the city, as it is not only the club he cares about, he is from Derby and wants the best for the City of Derby also, especially if as is rumoured, the club is sold, either partially, or fully to another party.

Edited June 3, 2019 by DerbyFan
Adding link to Sky article

[Mr Popodopolous]

30 minutes ago, DerbyFan said:

If the valuation was £55m in 2007, then surely it's entirely possible it could have gone up to that amount in the 11 years from then to the sale? There has also been a lot of work done to the stadium in the last few years, that while not increasing the value by that amount solely, does still add value.

There has also been talk locally, and I see Sky picked up on it in a recent article, of a roof being added to the stadium, to create a better venue for events. Sky Article

Derby is without a proper events venue at the moment, our Assembly Rooms has been closed for over 5 years now due to a fire in the plant room, those years since have seen a lot of wrangling over whether to replace it with something more suitable for larger events, at a higher cost, or to refurbish what is there, which is essentially too small, at a lower cost. It has been decided that it will be refurbished.

 We have an 'arena', right next to the stadium in fact, however, this is a velodrome and completely unsuited for events outside of this, there have been a lot of recent complaints about the sound quality in the (small) fixed seating block above the track, but it has been a case of making do, for now.

I believe all of this may have influenced the decision to look at using the stadium as an events venue, and may have influenced the purchase by Mel Morris, to make sure this happens for the sake of the city, as it is not only the club he cares about, he is from Derby and wants the best for the City of Derby also, especially if as is rumoured, the club is sold, either partially, or fully to another party.

Struggle to see it myself- saw a breakdown of that said same £55m valuation minus depreciation on Twitter somewhere- £41m or so I can believe, but not £81.1m which I believe was the sale price. Just doesn't seem that plausible to me. Maybe work done takes it back to £55m.

Well fair enough on that point, but surely that would be a future projected valuation- if the work hasn't been done yet, how can that be the present valuation?

Yeah, I can believe that Mel Morris wants the best for Derby i.e. the football club and the city. He is from Derby and according to Wiki an actual fan so I don't doubt that.

I have severe doubts about £81.1m price at the time of sale.

I understand too people always look for loopholes but EFL should govern it a lot better...should have and should. As for yourselves and other clubs who have purportedly done the same...why is it so hard to stick to the regulations- if you have to sell players, then so be it like a LOT of clubs! Your wage bill too...higher than Wolves in 2017/18 once promotion bonuses stripped out for them- though they had an "interesting" business model admittedly. It's cheating the competition IMO and yeah I can imagine clubs aplenty will be furious.

Any rent for Pride Park should be set at a market rate- according to sites I have read that is anything between £4m-£10m per season. However it is seemingly £1,1m which is a nonsense- EFL should insist that leasebacks are set at true market value. Perhaps cheats can be a bit strong but it's not right- it can't be right.

Were it down to me on FFP, I'd be handing out soft embargoes while investigating and getting clubs into EFL hearings left, right and centre- including in-season deductions.

Edited June 3, 2019 by Mr Popodopolous

[Guest]

46 minutes ago, Mr Popodopolous said:

Any rent for Pride Park should be set at a market rate- according to sites I have read that is anything between £4m-£10m per season. However it is seemingly £1,1m which is a nonsense- EFL should insist that leasebacks are set at true market value. Perhaps cheats can be a bit strong but it's not right- it can't be right.

 

That is ridiculous in the extreme..., £10m on an £81m asset is a 12.5% yield. £4m would be much more realistic though

[DerbyFan]

2 minutes ago, Mr Popodopolous said:

Struggle to see it myself- saw a breakdown of that said same £55m valuation minus depreciation on Twitter somewhere- £41m or so I can believe, but not £81.1m which I believe was the sale price. Just doesn't seem that plausible to me.

Well fair enough on that point, but surely that would be a future projected valuation- if the work hasn't been done yet, how can that be the present valuation?

Yeah, I can believe that Mel Morris wants the best for Derby i.e. the football club and the city. He is from Derby and according to Wiki an actual fan so I don't doubt that.

I have severe doubts about £81.1m price at the time of sale.

I understand too people always look for loopholes but EFL should govern it a lot better...should have and should. Why is it so hard to stick to the regulations- if you have to sell players, then so be it like a LOT of clubs! Your wage bill too...higher than Wolves in 2017/18 once promotion bonuses stripped out for them- though they had an "interesting" business model admittedly.

Any rent for Pride Park should be set at a market rate- according to sites I have read that is anything between £4m-£10m per season. However it's £1,1m which is a nonsense- EFL should insist that leasebacks are set at true market value.

I didn't mean that the roof project would make the current valuation higher, that was mentioned purely to help explain what the reasoning may have been for Mel Morris in particular for wanting to buy the stadium from the club, ie. the events venue, I probably shouldn't have added the 'also' to make this clear.

The Sky article I referenced also states that we cleared the stadium sale with the EFL before going ahead with it. In which case, I'm not sure how anyone can have a problem with us doing this? I can understand the argument of having a problem which such loopholes being in the rules, but in that case the problem is with the rules, not the clubs that have found the loopholes, clubs and people in life in general are always finding loopholes, isn't there a lawyer nicknamed 'Mr Loophole'?

I can understand why other fans may think this is unfair if their club is not in a position to do the same, however, the same goes for most things, not everyone has the players to sell for huge sums, and don't get me started on parachute payments being used for anything other than their intended purpose, football finance is an uneven playing field, it always will be, and clubs will always be looking for ways to compete financially, so long as they don't explicitly break the rules, I'm not sure how clubs can be punished for this?

I've seen a lot of fans talk about the valuation, but in reality, how does anyone know? I believe the valuation for the accounts is based on how much it would cost to rebuild minus depreciation. I know that some recent stadiums have cost an awful lot more than that to build, so maybe it's not so outlandish? I'm also not sure whether the market value for a sale would be the same as the valuation for the accounts, ie. minus the depreciation?

I'm not an accountant, and to be honest, most of it goes straight over my head, but I could see the section about the stadium valuation mentioned, which is why I created this account to point it out, as I could see you had repeated the same about the doubling and then doubling again a few times in this thread already, and I believed it to be misinformation.

Again, not being an accountant, I don't understand what it means, but I have noticed on the accounts a 'Revaluation reserve' which to my untrained eye looked like it was being depreciated each year, which I assume is due to the stadium, as it appeared in the 2008 accounts and disappeared in the 2018 accounts.

As for the rent, I'm not sure whether the value should be the market rate for a sale of that size, or whether the market rate is based upon what other clubs are paying, there are a lot of clubs renting their stadium in both the Premier League and the Championship, I doubt many are paying anything like that kind of sum, even in a more expensively valued stadium.

[Mr Popodopolous]

5 minutes ago, 29AR said:

That is ridiculous in the extreme..., £10m on an £81m asset is a 12.5% yield. £4m would be much more realistic though

That is what some posts on sites suggested- I'd say somewhere between £4-5m perhaps. Seen 8% with a  quick search, so that would be about £6.488m per season/year.

Definitely not £1.1m!

Edited June 3, 2019 by Mr Popodopolous

[downendcity]

51 minutes ago, Mr Popodopolous said:

Any rent for Pride Park should be set at a market rate- according to sites I have read that is anything between £4m-£10m per season. However it is seemingly £1,1m which is a nonsense- EFL should insist that leasebacks are set at true market value. Perhaps cheats can be a bit strong but it's not right- it can't be right.

Were it down to me on FFP, I'd be handing out soft embargoes while investigating and getting clubs into EFL hearings left, right and centre- including in-season deductions.

If I were a layman, looking this transaction from the outside, I would assume that in return for such a low rental, the revenue generated from the ground - match day and non-match day commercial income- is going to the "new owner" company ? 

[Mr Popodopolous]

5 minutes ago, downendcity said:

If I were a layman, looking this transaction from the outside, I would assume that in return for such a low rental, the revenue generated from the ground - match day and non-match day commercial income- is going to the "new owner" company ? 

Let's hope so...but if Mel Morris a Derby fan and cares about the city of Derby- which I believe to be true incidentally on both counts, I fear it maybe wishful thinking.

Would be great though!

Based on 2017/18 season, their turnover would be slashed- down by £13,198,070- or 44.56%. 

To comply with existing FFP in that great scenario, firesale?  

Edited June 3, 2019 by Mr Popodopolous

[Mr Popodopolous]

1 hour ago, DerbyFan said:

I didn't mean that the roof project would make the current valuation higher, that was mentioned purely to help explain what the reasoning may have been for Mel Morris in particular for wanting to buy the stadium from the club, ie. the events venue, I probably shouldn't have added the 'also' to make this clear.

 The Sky article I referenced also states that we cleared the stadium sale with the EFL before going ahead with it. In which case, I'm not sure how anyone can have a problem with us doing this? I can understand the argument of having a problem which such loopholes being in the rules, but in that case the problem is with the rules, not the clubs that have found the loopholes, clubs and people in life in general are always finding loopholes, isn't there a lawyer nicknamed 'Mr Loophole'?

I can understand why other fans may think this is unfair if their club is not in a position to do the same, however, the same goes for most things, not everyone has the players to sell for huge sums, and don't get me started on parachute payments being used for anything other than their intended purpose, football finance is an uneven playing field, it always will be, and clubs will always be looking for ways to compete financially, so long as they don't explicitly break the rules, I'm not sure how clubs can be punished for this?

I've seen a lot of fans talk about the valuation, but in reality, how does anyone know? I believe the valuation for the accounts is based on how much it would cost to rebuild minus depreciation. I know that some recent stadiums have cost an awful lot more than that to build, so maybe it's not so outlandish? I'm also not sure whether the market value for a sale would be the same as the valuation for the accounts, ie. minus the depreciation?

I'm not an accountant, and to be honest, most of it goes straight over my head, but I could see the section about the stadium valuation mentioned, which is why I created this account to point it out, as I could see you had repeated the same about the doubling and then doubling again a few times in this thread already, and I believed it to be misinformation.

Again, not being an accountant, I don't understand what it means, but I have noticed on the accounts a 'Revaluation reserve' which to my untrained eye looked like it was being depreciated each year, which I assume is due to the stadium, as it appeared in the 2008 accounts and disappeared in the 2018 accounts.

As for the rent, I'm not sure whether the value should be the market rate for a sale of that size, or whether the market rate is based upon what other clubs are paying, there are a lot of clubs renting their stadium in both the Premier League and the Championship, I doubt many are paying anything like that kind of sum, even in a more expensively valued stadium.

Thank you for the response.

I struggle to believe it would be £81.1m, that's my view- if an EFL appointed independent valuer came to the same conclusion, I suppose that would change the picture somewhat. Yes, loopholes are a fact of life- good governance can severely clamp down on these though- which leads me onto my next point...

The EFL...an organisation headed up by Shaun Harvey is questionable. To me it isn't a legitimate profit unless sold to a bona fide third party- and Gellaw NewCo 203 Limited most definitely is not.

We are easily in a position to do the same- so too are Middlesbrough financially I expect, in fact so would a lot of clubs- SL was a chartered accountant he could easily, easily have done this! Could have come up with it standing on his head I reckon- it's so blatant that it shouldn't be allowed though and I assumed he like many other owners who could also took the view that it just wouldn't be allowed- it's ridiculous- not even any great attempt to conceal! You have sold players, you are still in deficit- here's an idea, cut the wage bill! Same goes for Aston Villa in spades and quite likely Sheffield Wednesday...Birmingham also. Parachute payments are a different matter and though I don't believe they should be done away with, they definitely need reform.

Did we transfer AG to the club and then sell to Steve Lansdown or a company that he has a stake in? Did we bollocks! We instead sold Flint, Bryan and Reid- 3 key players, we also sold Messrs Magnússon, Djuric and Engvall- 2 squad players and one who never made it but it helped bring down costs, amortisation and the like. Did Middlesbrough sell the Riverside to SG? I could go on! We also sold Kelly right near the end of our financial year- an England U21 international LB who also can play and indeed in medium to long run will likely play there- only signing one out of Waghorn or Marriott maybe an idea? Or selling Bogle in 2018/19- either of those would have moved you significantly towards the right direction if not reached compliance. Technically your accounting period until 30th June 2019 so you still have time to be legit- get Bogle and Waghorn out that door but be quick! Or put up ticket prices, or further push on with commercial revenue- gained legitimately of course.

Pride Park- cost £28m to build, completed in 1997...about £50.12m in 2017/18 prices according to an inflation calculator.

Doubling and doubling again may have been a slight technical misunderstanding on my part- happy to correct that. I've always had a gut feeling that you might have scraped FFP so it came as a surprise to see you failed it or would have done without this sale. Then there is the matter of Newco 5112- non football staff paid on that- funny feeling that even with the stadium sale if the Newco 5112 Limited were your FFP figures you might have failed regardless.

'Revaluation reserve'- that sounds interesting, will look closer on that.

Premier League seems a law unto itself- they pay lip-service to FFP although not necessarily STCC- time will tell on that. EFL in terms of FFP in the Championship[ do less so but if I was in there, I would be very serious on it. Would have to find rent but to me, if owned by a related party then rent should be at market rate- why after all would a true, 3rd unrelated party charge a low rent in most cases after all?

Edited June 3, 2019 by Mr Popodopolous

[Davefevs]

Mr P - you on fire  

[DerbyFan]

13 minutes ago, Mr Popodopolous said:

Thank you for the response.

I struggle to believe it would be £81.1m, that's my view- if an EFL appointed independent valuer came to the same conclusion, I suppose that would change the picture somewhat. Yes, loopholes are a fact of life- good governance can severely clamp down on these though- which leads me onto my next point...

The EFL...an organisation headed up by Shaun Harvey is questionable. To me it isn't a legitimate profit unless sold to a bona fide third party- and Gellaw NewCo 203 Limited most definitely is not.

We are easily in a position to do the same- so too are Middlesbrough financially I expect, in fact so would a lot of clubs- SL was a chartered accountant he could easily, easily have done this! Could have come up with it standing on his head I reckon- it's so blatant that it shouldn't be allowed though and I assumed he like many other owners who could also took the view that it just wouldn't be allowed- it's ridiculous- not even any great attempt to conceal! You have sold players, you are still in deficit- here's an idea, cut the wage bill! Same goes for Aston Villa in spades and quite likely Sheffield Wednesday...Birmingham also. Parachute payments are a different matter and though I don't believe they should be done away with, they definitely need reform.

Did we transfer AG to the club and then sell to Steve Lansdown or a company that he has a stake in? Did we bollocks! We instead sold Flint, Bryan and Reid- 3 key players, we also sold Messrs Magnússon, Djuric and Engvall- 2 squad players and one who never made it but it helped bring down costs, amortisation and the like. Did Middlesbrough sell the Riverside to SG? I could go on! We also sold Kelly right near the end of our financial year- an England U21 international LB who also can play and indeed in medium to long run will likely play there- only signing one out of Waghorn or Marriott maybe an idea? Or selling Bogle in 2018/19- either of those would have moved you significantly towards the right direction if not reached compliance. Technically your accounting period until 30th June 2019 so you still have time to be legit- get Bogle and Waghorn out that door but be quick! Or put up ticket prices, or further push on with commercial revenue- gained legitimately of course.

Pride Park- cost £28m to build, completed in 1997...about £50.12m in 2017/18 prices according to an inflation calculator.

Doubling and doubling again may have been a slight technical misunderstanding on my part- happy to correct that. I've always had a gut feeling that you might have scraped FFP so it came as a surprise to see you failed it or would have done without this sale. Then there is the matter of Newco 5112- non football staff paid on that- funny feeling that even with the stadium sale if the Newco 5112 Limited were your FFP figures you might have failed regardless.

'Revaluation reserve'- that sounds interesting, will look closer on that.

Premier League seems a law unto itself- they pay lip-service to FFP although not necessarily STCC- time will tell on that. EFL in terms of FFP in the Championship[ do less so but if I was in there, I would be very serious on it. Would have to find rent but to me, if owned by a related party then rent should be at market rate- why after all would a true, 3rd unrelated party charge a low rent in most cases after all?

But it is legitimate profit, the rules specifically state this, the club had the stadium independently valued, you may not think the stadium is worth that, but if an independent valuer does then why should they listen to you rather than them, after all that is their job is it not, they should be right not you? The club is allowed to dispose of tangible fixed assets and count this as profit, regardless of who they sell it to providing it is fair value, hence the independent valuation, this is why the club made no attempt to conceal it, why would they? There's nothing wrong with the transaction and we're told the EFL okayed it before it happened.

Loopholes can only be clamped down upon after they have been discovered, you cannot punish someone for finding a loophole and using it, that is why it is a loophole in the first place, it is not against the rules, the rules can be changed, but you cannot punish someone for something they did before the rules changed after changing the rules, as they didn't break them when they did it.

Cutting the wage bill sounds easy, however, you can only cut the wage bill if people are either 1. Out of contract, or 2. Someone wants to buy them and/or take on their contract. It's easy with hindsight to say you shouldn't have signed someone on high wages, but once it is done, it is done, you are contracted to pay them that until the end of their contract, even if you quickly realise it is a mistake, surely you yourselves have found this at some point? We all wish we could turn back the clock and not do something, but it is not possible. There was a well publicised High Court claim, the details for which are in the 2017 accounts, this was settled out of court in October 2018, so obviously no one knows how that ended, but it could play a part in the above.

As you mentioned yourself we have sold players, we sold the 2017/18 golden boot winner to fund last years signings, we let the (believed to be) high earners of Bent, Baird and Shackell go, as well as selling Weimann to yourselves, Jerome to Goztepe, Ledley left this January after he terminated his contract, we also let some younger players (Vernam, Zanzala, Guy and Hanson) that we didn't feel would make it go for small fees to the lower leagues, we also let Walker go for the sake of his career as he wanted first team football which we couldn't offer.

We have 11* 10 first team players out of contract this summer (Bryson, Butterfield, Johnson, Olsson, Nugent, Pearce, Blackman, Roos*, Elsnik, Cole and Ambrose), even if we might keep a few of them, that is a huge chunk of wages gone, and of the ones that may re-sign, most will not be on anything like the wages they are on now as they are in their 30's, and coming to the end of their careers, so they won't get great offers anywhere, including here. We have an extremely good academy, with many players likely to play a part next season, you may have noticed some of them on the bench for us already during this season, as Bogle was last season before breaking through during this one, so we may not need to spend too much this summer, to let them take their places in the squad.

That inflation calculator doesn't take into account the work that has gone into the stadium over the years, adding to the value.

I don't know about the non-football staff being in the other company, as I say, I'm not an accountant, I don't understand the workings or the reasonings. I do know that the club has a joint venture with Delaware North for the catering, Club DCFC, which I believe is owned jointly by the 2 parties, so I'm not sure how that would work with regard to FFP, or whether it is even relevant to this.

With the rent, I believe most stadia are owned in the same way as ours now is, ie. by the same owner in a different company, so I don't think this makes a difference to the market rate.

*We've just announced Roos has signed until 2022.

[Mr Popodopolous]

1 hour ago, DerbyFan said:

But it is legitimate profit, the rules specifically state this, the club had the stadium independently valued, you may not think the stadium is worth that, but if an independent valuer does then why should they listen to you rather than them, after all that is their job is it not, they should be right not you? The club is allowed to dispose of tangible fixed assets and count this as profit, regardless of who they sell it to providing it is fair value, hence the independent valuation, this is why the club made no attempt to conceal it, why would they? There's nothing wrong with the transaction and we're told the EFL okayed it before it happened.

Loopholes can only be clamped down upon after they have been discovered, you cannot punish someone for finding a loophole and using it, that is why it is a loophole in the first place, it is not against the rules, the rules can be changed, but you cannot punish someone for something they did before the rules changed after changing the rules, as they didn't break them when they did it.

Cutting the wage bill sounds easy, however, you can only cut the wage bill if people are either 1. Out of contract, or 2. Someone wants to buy them and/or take on their contract. It's easy with hindsight to say you shouldn't have signed someone on high wages, but once it is done, it is done, you are contracted to pay them that until the end of their contract, even if you quickly realise it is a mistake, surely you yourselves have found this at some point? We all wish we could turn back the clock and not do something, but it is not possible. There was a well publicised High Court claim, the details for which are in the 2017 accounts, this was settled out of court in October 2018, so obviously no one knows how that ended, but it could play a part in the above.

As you mentioned yourself we have sold players, we sold the 2017/18 golden boot winner to fund last years signings, we let the (believed to be) high earners of Bent, Baird and Shackell go, as well as selling Weimann to yourselves, Jerome to Goztepe, Ledley left this January after he terminated his contract, we also let some younger players (Vernam, Zanzala, Guy and Hanson) that we didn't feel would make it go for small fees to the lower leagues, we also let Walker go for the sake of his career as he wanted first team football which we couldn't offer.

We have 11* 10 first team players out of contract this summer (Bryson, Butterfield, Johnson, Olsson, Nugent, Pearce, Blackman, Roos*, Elsnik, Cole and Ambrose), even if we might keep a few of them, that is a huge chunk of wages gone, and of the ones that may re-sign, most will not be on anything like the wages they are on now as they are in their 30's, and coming to the end of their careers, so they won't get great offers anywhere, including here. We have an extremely good academy, with many players likely to play a part next season, you may have noticed some of them on the bench for us already during this season, as Bogle was last season before breaking through during this one, so we may not need to spend too much this summer, to let them take their places in the squad.

That inflation calculator doesn't take into account the work that has gone into the stadium over the years, adding to the value.

I don't know about the non-football staff being in the other company, as I say, I'm not an accountant, I don't understand the workings or the reasonings. I do know that the club has a joint venture with Delaware North for the catering, Club DCFC, which I believe is owned jointly by the 2 parties, so I'm not sure how that would work with regard to FFP, or whether it is even relevant to this.

With the rent, I believe most stadia are owned in the same way as ours now is, ie. by the same owner in a different company, so I don't think this makes a difference to the market rate.

*We've just announced Roos has signed until 2022.

EFL should've sent an independent valuer before passing it IMO. I am and have been consistent on this...I struggle to believe it is £81.1m legitimately. Who said anything about listening to me- EFL should appoint independent valuers to these matters- do you think UEFA would have accepted it? Not sure. I understand the independent valuer argument, but I'd want a 2nd opinion in the circs...

Hmm...I think you'll find that they can. IF EFL were to put it to a vote of clubs then I could see it going wrong for you! EFL need to get it to a vote- Leeds got punished under a rule that wasn't even a rule in place at the time and yours is IMO a lot more damaging towards the competition as a whole. EFL could reverse this if they get it right, disallow the profit- if you're under a soft embargo it would suggest this is still a live matter.

Well you should have put more up for sale then- why sign Waghorn and Marriott? One would suffice! Had a quick google for Sam Rush- "Respective differences settled", doesn't sound like you got the £6.8m you were hoping for I would assume, but we'll see what the accounts say. You sell Bogle, you only sign one of those 2 strikers- you don't sign both- there are solutions, you just didn't look hard enough- compare it to our transfer activity and that of Middlesbrough to name 2!! Forgot about Jerome fair point, but you would still have been in breach- that's on yourselves and nobody else. However I do put you and have put you in a different category to out and out flagrant breachers like Aston Villa, Sheffield Wednesday and in some ways Birmingham- you have sold players, you have moved in a positive direction but it's quite simple- if you can't afford within the regulations, then you can't buy- therefore buying one and one only out of Marriott or Waghorn would have been a good start. Bogle sold? Maybe- would have to look at the figures in more depth. We could easily have flouted and purchased Assombalonga in Jan- had he been up for sale.

Big chunk of wages yes, and you do seem to have a useful academy but you're overlooking an operating loss, you're overlooking your accounting methods in which unlike the bulk of clubs has players on straight line amortisation, you seem to sign players and there is a residual revaluation- chances are those 10-11 if no fee received will all be at a loss , but this will be superseded by savings in wages. I don't doubt you are moving in the right direction but punished you should be and if clubs vote on it and it is watertight, punished you would be.

If it is truly £81.1m- then I'm a Dutchman. I find it laughable- EFL should have appointed an independent land valuer and got them in there right away. Same as for any club who wants to sell a ground but especially to a related party. £50m rather than £41m maybe a more realistic value but depreciation had it under £50m until recent revaluation. Will look through 10-15 years worth of Derby accounts later and try to work out depreciation rate- it was somewhere between 2-10% for Pride Park according to your accounts.

A list would be good- done under the old regs perhaps, before this became a thing- good reasons behind it in order to separate out the club and ground in event of bankruptcy but I certainly don't think most clubs rent their grounds.

Regarding this case, well let's say you had sold it to for example Barclays Bank- and you had got £81.1m and leased back? I and many others would have been a bit annoyed likely but accepted it for what it was- a legitimate, arms-length non-related third party transaction. Oddly I would have no problem with that- you would be taking a risk on your ground short or even medium-long term but you take the risk then it's legitimate IMO- if no connection. If it goes wrong, that's life. You gamble, you can win or you can lose! If it goes right, you reap the rewards- if it goes right you can buy ground back...incredibly reckless but if you do that, well risk-reward and no conflict of interest. You didn't do that though did you? No- you sold it to a company owned by Mel Morris...would Barclays have paid £81.1m for Pride Park? Doubtful!

Interesting- Derby related- tweet.

Any ideas on this one @DerbyFan ?

Edited June 3, 2019 by Mr Popodopolous

[Olé]

27 minutes ago, DerbyFan said:

Cutting the wage bill sounds easy, however, you can only cut the wage bill if people are either 1. Out of contract, or 2. Someone wants to buy them and/or take on their contract.

Isn't that precisely what Derby's unconventional method of amortisation says not just IS easy, but is a foregone conclusion! 

Are you telling us that your players aren't actually guaranteed to automatically be bought? What a shocker, as that would imply your residual amortisation model exists for some other reason, although I'm struggling to see one besides being able to have some seasonal flex on FFP!

[bcfc01]

Good to see some input from the Derby fella - gives both sides of the story and his input has given a lot more context imo.

Maybe Derby aren't off the hook just yet but it does seem like they've acted within the interpretation of the rules if not the spirit. 

 

[DerbyFan]

1 minute ago, bcfc01 said:

Good to see some input from the Derby fella - gives both sides of the story and his input has given a lot more context imo.

Maybe Derby aren't off the hook just yet but it does seem like they've acted within the interpretation of the rules if not the spirit. 

 

I'm female 

[downendcity]

I know there is a danger of repeating things previously covered on this thread, so apologies if any of these points have been raised before.

The Derby fan suggests that a Sky article mentioned that Derby cleared the stadium sale with the EFL prior to carrying out the transaction. If so, then, as our own financial Rotweiller( better known as Mr Popodopulous) has pointed out many times, this is just yet another example of the EFL's abject handling of ffp and the issues it raises. If nothing else, the timing of this sale transaction, let alone that it was a paper transaction between related companies, should have raised concerns, coming at the year end and just at the point of ffp reckoning.

As for the Derby fan's suggestion that fans of other clubs will think it unfair if their club is not in a position to do the same. As Mr P rightly points out, many clubs are in a position to do something similar, one of which almost certainly is Boro, whose  Chairman has been outspoken about ffp issues recently. What the Derby fans seems to miss completely, is that it is not whether other clubs can or cannot do the same, but whether they have chosen not to do so because they realise it is not within the spirit of ffp rules and  that some/many of them have taken appropriate steps with their financial management and controls to ensure they do not breach ffp, so have no need to do so.

There is a final point regarding the stadium value. We know Pride Park was built 20 odd years ago, but for the purposes of making this point,  imagine that Morris has just funded the £80m construction of a new Pride Park. Ffp allows him to invest in infrastructure, such as a new stadium, without that expenditure counting towards  ffp but what if then, immediately on completion, Derby County then sold the completed stadium to another of Morris's companies for £80m?

Accordingly,  to my mind It's not the value that is the issue, because in this example it would be equal to  the cost of construction.  It is that, at a stroke, Morris has converted £80m of his personal investment that ffp only allowed to go into infrastructure, into £80m of allowable "income" that ffp now allows to be used for any purpose, including covering wages, transfer fees i.e. to improve the playing side of the club. Had Morris simply invested £80m into the club for this purpose it would not be allowed. This is ludicrous!

At the moment, by allowing Derby to get away with this without any sanction, the EFL is in danger of creating a precedent that others clubs can point to in their defence if they want to follow a similar course in future.

 

[Davefevs]

@Mr Popodopolous and @Olé 

Their method of accounting is gonna bite them in the arse (if they do t get promoted), maybe not this year or the next, but at some point those players are gonna be worth eff all and their amortisation impairment is gonna be huge.  Perhaps Morris can sell the player’s houses and lease them back.  It’s a dangerous game not straight line depreciating.  I can see Huddlestone being valued at £10m aged 57, continuing to get renewals just to keep Derby inside ffp!

[DerbyFan]

12 minutes ago, Mr Popodopolous said:

EFL should've sent an independent valuer before passing it IMO. I am and have been consistent on this...I struggle to believe it is £81.1m legitimately. Who said anything about listening to me- EFL should appoint independent valuers to these matters- do you think UEFA would have accepted it? Not sure. I understand the independent valuer argument, but I'd want a 2nd opinion in the circs...

Hmm...I think you'll find that they can. IF EFL were to put it to a vote of clubs then I could see it going wrong for you- we can hope eh! EFL need to get it to a vote- Leeds got punished under a rule that wasn't even a rule in place at the time and yours is IMO a lot more damaging towards the competition as a whole. EFL could reverse this if they get it right, disallow the profit- if you're under a soft embargo it would suggest this is still a live matter.

Well you should have put more up for sale then- why sign Waghorn and Marriott? One would suffice! Had a quick google for Sam Rush- "Respective differences settled", doesn't sound like you got the £6.8m you were hoping for I would assume, but we'll see what the accounts say. You sell Bogle, you only sign one of those 2 strikers- you don't sign both- there are solutions, you just didn't look hard enough- compare it to our transfer activity and that of Middlesbrough to name 2!! Forgot about Jerome fair point, but you would still have been in breach- that's on yourselves and nobody else. However I do put you and have put you in a different category to out and out flagrant breachers like Aston Villa, Sheffield Wednesday and in some ways Birmingham- you have sold players, you have moved in a positive direction but it's quite simple- if you can't afford you can't buy- therefore buying one and one only out of Marriott or Waghorn would have been a good start. Bogle sold? Maybe- would have to look at the figures in more depth

Big chunk of wages yes, and you do seem to have a useful academy but you're overlooking an operating loss, you're overlooking your accounting methods in which unlike the bulk of clubs has players on straight line amortisation, you seem to sign players and there is a residual revaluation- chances are those 10-11 if no fee received will all be at a loss , but this will be superseded by savings in wages. I don't doubt you are moving in the right direction but punished you should be and if clubs vote on it and it is watertight, punished you would be.

If it is truly £81.1m- then I'm a Dutchman. I find it laughable- EFL should have got an independent land valuer in there right away. Same as for any club who wants to sell a ground but especially to a related party. £50m rather than £41m maybe a more realistic value but depreciation had it under £50m until recent revaluation. Will look through 10-15 years worth of Derby accounts later and try to work out depreciation rate- it was somewhere between 2-10% for Pride Park according to your accounts.

A list would be good- done under the old regs perhaps, before this became a thing- good reasons behind it in order to separate out the club and ground in event of bankruptcy but I certainly don't think most clubs rent their grounds.

Regarding this case, well let's say you had sold it to for example Barclays Bank- and you had got £81.1m and leased back? I and many others would have been a bit annoyed likely but accepted it for what it was- a legitimate, arms-length non related third party transaction. Oddly I would have no problem with that- you would be taking a risk on your ground short or even medium-long term but you take the risk then it's legitimate IMO- if no connection. If it goes wrong, that's life! You gamble, you can win or you can lose! If it goes right, you reap the rewards- if it goes right you can buy ground back...incredibly reckless but if you do that, well risk-reward and no conflict of interest. You didn't do that though did you? No- you sold it to a company owned by Mel Morris...would Barclays have paid £81.1m for Pride Park? Doubtful!

You don't seem to want to accept that what the club did is ok, you don't think it is ok, so it is not ok seems to be your attitude. I'm not sure how many companies are out there that deal with stadium valuation, I'm guessing not a lot as it's pretty specialised, maybe the EFL trust the one that we used? Maybe they told us which company to use when we contacted them before we did it? I don't know, I'm just surmising.

I don't believe we are under a soft embargo, I'm not sure why the Daily Mail said that we were in the article the other day, no one else has said that we are any more, in fact I saw your other thread where you mentioned the Times article that specially didn't mention us at all in relation to being close to FFP, and I'm sure it was the Times that were the first to say we had a soft embargo before, it was said previously that we couldn't announce the signing of Shinnie because we were, then we announced it, after he'd recovered from his injury.

I don't see how they can punish us for 1. Something they EFL have okayed and 2. Something that was allowed within the rules at the time. What the other clubs think now it's happened doesn't matter, they agreed to the rules, they clearly say that you can dispose of tangible fixed assets, this will presumably always be buildings and land, and as such will always lead to an uneven effect with being able to invest in them as infrastructure without taking an FFP hit and then selling them on, to whoever, and making a profit from the sale. Do you have any idea what the legal implications of punishing us for acting within the rules would be? It would surely be laughed out of court. I don't see it as being against the spirit, in finance it's surely pretty black and white, it's either allowed in the rules, or it's not.

We've just released our retained list, and while there are some surprises, with Johnson, Blackman and Butterfield being given 12 month extensions on 'vastly reduced terms', I'm sure they are done for FFP purposes, to avoid the residual values meaning we take a hit to this years accounts. I probably expected Johnson to be given a new contract anyway, as he has been an important player for us in the last few months and I would expect him to rotate with Shinnie, with a youngster (more than likely Bird) to back them up, but Butterfield and Blackman, as our local paper said are expected to be released, however I think this will happen in July, so that our irregular amortisation means we take the hit next season instead, yes it means always chasing your tail, well it does until we can get the wages under control and then we can take larger amounts off the residual values and get back on track, but this is the situation we are in.

At the end of next season we have Martin (apparently high wages but no residual value, we got him on a free and you apparently cannot have a residual value higher than you paid), Anya and Thorne out of contract, along with a few others that I don't think will mean too much of a hit (we didn't pay much for Davies) it's possible there could be interest in them this summer, but I'd expect them to go out on loan if anything (not Davies, he'll stay). There was interest in Huddlestone in January and I expect him to go this summer, I also expect us to sell Carson this summer, now that Roos has signed his contract, we may then choose to have a youngster (probably Ravas, as he has been with the squad for every game recently as the third choice) as backup, or we have Mitchell coming back from loan.

Why on earth would the stadium be valued at £50m now when it was valued at £55m 11 years ago and there has been lots of work done in the meantime.

Apologies for such long answers, I'm refreshing the new replies and while not quoting everyone I'm trying to reply to everyone in the one post so as not to have to cover the same ground in each reply.

[Jerseybean]

SL invests a further £10m https://www.bristolpost.co.uk/sport/football/football-news/steve-lansdown-invests-extra-10m-2936355

The article comes across to me as it’s simply the done thing and nothing to get excited about, which seems a wee bit ungrateful in my book!

[Mr Popodopolous]

1 hour ago, DerbyFan said:

You don't seem to want to accept that what the club did is ok, you don't think it is ok, so it is not ok seems to be your attitude. I'm not sure how many companies are out there that deal with stadium valuation, I'm guessing not a lot as it's pretty specialised, maybe the EFL trust the one that we used? Maybe they told us which company to use when we contacted them before we did it? I don't know, I'm just surmising.

I don't believe we are under a soft embargo, I'm not sure why the Daily Mail said that we were in the article the other day, no one else has said that we are any more, in fact I saw your other thread where you mentioned the Times article that specially didn't mention us at all in relation to being close to FFP, and I'm sure it was the Times that were the first to say we had a soft embargo before, it was said previously that we couldn't announce the signing of Shinnie because we were, then we announced it, after he'd recovered from his injury.

I don't see how they can punish us for 1. Something they EFL have okayed and 2. Something that was allowed within the rules at the time. What the other clubs think now it's happened doesn't matter, they agreed to the rules, they clearly say that you can dispose of tangible fixed assets, this will presumably always be buildings and land, and as such will always lead to an uneven effect with being able to invest in them as infrastructure without taking an FFP hit and then selling them on, to whoever, and making a profit from the sale. Do you have any idea what the legal implications of punishing us for acting within the rules would be? It would surely be laughed out of court. I don't see it as being against the spirit, in finance it's surely pretty black and white, it's either allowed in the rules, or it's not.

We've just released our retained list, and while there are some surprises, with Johnson, Blackman and Butterfield being given 12 month extensions on 'vastly reduced terms', I'm sure they are done for FFP purposes, to avoid the residual values meaning we take a hit to this years accounts. I probably expected Johnson to be given a new contract anyway, as he has been an important player for us in the last few months and I would expect him to rotate with Shinnie, with a youngster (more than likely Bird) to back them up, but Butterfield and Blackman, as our local paper said are expected to be released, however I think this will happen in July, so that our irregular amortisation means we take the hit next season instead, yes it means always chasing your tail, well it does until we can get the wages under control and then we can take larger amounts off the residual values and get back on track, but this is the situation we are in.

At the end of next season we have Martin (apparently high wages but no residual value, we got him on a free and you apparently cannot have a residual value higher than you paid), Anya and Thorne out of contract, along with a few others that I don't think will mean too much of a hit (we didn't pay much for Davies) it's possible there could be interest in them this summer, but I'd expect them to go out on loan if anything (not Davies, he'll stay). There was interest in Huddlestone in January and I expect him to go this summer, I also expect us to sell Carson this summer, now that Roos has signed his contract, we may then choose to have a youngster (probably Ravas, as he has been with the squad for every game recently as the third choice) as backup, or we have Mitchell coming back from loan.

Why on earth would the stadium be valued at £50m now when it was valued at £55m 11 years ago and there has been lots of work done in the meantime.

Apologies for such long answers, I'm refreshing the new replies and while not quoting everyone I'm trying to reply to everyone in the one post so as not to have to cover the same ground in each reply.

I don't think much of the EFL- the fact they bottled in-season penalties on Birmingham in 2017/18 and Aston Villa, Sheffield Wednesday this season shows what they are all about- Shaun Harvey is not terribly capable, our own Mark Ashton IMO would have seen to it that the right punishments would have been handed out in a timely manner. I think it simply flummoxed a less than capable organisation- Birmingham's case was nailed on, look how long it took them to get sanctioned!

We'll see- no smoke without fire. If you aren't then you should be while EFL investigate properly. Would make sense...I believe you can sign within certain conditions loans and frees under a soft embargo but it's a good holding position I think to prevent major signings.

The rules also refer to "Fair Market Value" and related parties- this will perhaps form part of Gibson's legal argument. I would also consider putting the golden share in EFL as a matter on table for clubs that take it to an external court personally- put that to a vote of member clubs, see how you like that!  In short, the risk of suspension of membership from the EFL. Putting aside that nuclear option, the other way of looking at it is that if infrastructure expenditure does not count towards expenses, nor should income of this nature count towards income. Now it isn't wholly a view I agree with, but the clause should read "Third and unrelated party or sale of a ground as moving to a new one" Words to that effect but much more legal language etc.

Do you think the other 21 clubs at this meeting in June in Portugal are going to take it well from yourselves, Sheffield Wednesday and though they have gone up, trying to push for the deductions for Aston Villa? Tell me why they should...I'd be furious if I was a chairman who had played by the rules and the spirit as most had. Or for that matter, Birmingham getting punished as they did.

Yes, for FFP purposes. Johnson seems a decent player in any case agreed. The situation you are in- and why are you in it? You overspent! Badly...to me you should be docked 10-11 points as per the formula, EFL has provision to punish historic breaches within the rules- well if they bother to enforce that is. UEFA does I know that. These rules are based to varying levels on UEFA's. If they have nothing in the regs about it, that is another huge fuckup on their part but they must have as QPR got punished for offences in 2013/14. Not punished enough granted, but they were punished.

Wonder if Carson, Davies, Anya, Thorne, Martin will incur a loss- well Martin won't but he should therefore be up for sale- pure profit and wages off?

Depreciation- like I say going to look through 10-15 years of accounts. Is this work done, or work that is and has been in the pipeline? To me planned work, counting as current value is a bit odd.

I struggle though to understand why you refuse to accept- you've overspent and you've been looking at any and every loophole to try to get out of it. From Sevco 5112, to this, to the residual value- I struggle to see your argument other than it just being a technicality.

Sevco 5112 Limited takes non footballing wages off the wage bill, does it not?

On the related party thing- so what Morris did basically?

Quote

"All accounts are adjusted by the EFL to remove any excessive sponsorship or advertising income received from owners or related parties before the tests are started". 

To me a stadium sale with a large profit fits that bill perfectly- if accounts adjusted, then you're in breach. If you're in breach it'd be points off? It is just a way of funnelling income from the owner to the club- whether actual or paper as far as I can see. For example, I'd remove £30-35m based on that.

https://www.mikethornton.xyz/new-ffp-tests/

The rules themselves are mostly pretty sound- it's the morons who cannot enforce them with sufficient rigour or speed that brings about these issues.

Edited June 3, 2019 by Mr Popodopolous

[downendcity]

13 minutes ago, Mr Popodopolous said:

I struggle though to understand why you refuse to accept- you've overspent and you've been looking at any and every loophole to try to get out of it. From Sevco 5112, to this, to the residual value- I struggle to see your argument other than it just being a technicality.

Sevco 5112 Limited takes non footballing wages off the wage bill, does it not?

Judging by some of the criticism oaths forum of our own club's transfer activity - selling key players and not spending big in January on a top striker - it shows that many of our fans still don't fully understand or "get' ffp and the effect it has on a club's operation, and we know that it has taken SL 5 years to change the club's way of operating in order to be able to comply with ffp requirements.

For club's like Derby, Wednesday and Villa, it is therefore hardly surprising that they do not want to accept limitations that will adversely affect their aim  of gaining promotion back to the premier league, which is what ffp does. As a result,  if, as seems the case with Derby and their stadium sale, they will only see it from a selfish point of view ( perhaps understandably) and will argue every which way to justify the course of action taken, no matter every argument given to the contrary.

 

[Mr Popodopolous]

21 minutes ago, downendcity said:

 Judging by some of the criticism oaths forum of our own club's transfer activity - selling key players and not spending big in January on a top striker - it shows that many of our fans still don't fully understand or "get' ffp and the effect it has on a club's operation, and we know that it has taken SL 5 years to change the club's way of operating in order to be able to comply with ffp requirements.

For club's like Derby, Wednesday and Villa, it is therefore hardly surprising that they do not want to accept limitations that will adversely affect their aim  of gaining promotion back to the premier league, which is what ffp does. As a result,  if, as seems the case with Derby and their stadium sale, they will only see it from a selfish point of view ( perhaps understandably) and will argue every which way to justify the course of action taken, no matter every argument given to the contrary.

 

Yeah, agreed- think we could have pushed it Jan 2019 on a higher calibre striker but I do agree most certainly. I don't think a lot of fans per se fully understand, or 'get' FFP- across the board. Or think it's a daft invention. Definitely it has been a long road but while we're here now- isn't always the best received.

Well said. I can accept the Sevco 5112 thing I suppose- legal and lots of companies probably do it. I can accept the residual value- short term gain v long term risk- that's fine to an extent.

What I cannot accept is how shuffling a transaction worth £81.1m from club to company owned by owner- whether it's real cash or paper I don't know but it'd show on the balance sheet- to not only avoid FFP sanctions but to provide a bit of a base to spend again moving forward. Is wrong- cheats the competition, and as you say getting back to the PL is their big aim so they will come up with ever more creative arguments, while avoiding the crux of the issue- their overspending and their *punishment dodging.

*-To date- wouldn't mind being a fly on the wall in that Portugal meeting!

Edited June 3, 2019 by Mr Popodopolous

[Rudolf Hucker]

2 hours ago, DerbyFan said:

I'm female 

[DerbyFan]

5 minutes ago, Mr Popodopolous said:

I don't think much of the EFL- the fact they bottled in-season penalties on Birmingham in 2017/18 and Aston Villa, Sheffield Wednesday this season shows what they are all about- Shaun Harvey is not terribly capable, our own Mark Ashton IMO would have seen to it that the right punishments would have been handed out in a timely manner. I think it simply flummoxed a less than capable organisation- Birmingham's case was nailed on, look how long it took them to get sanctioned!

We'll see- no smoke without fire. If you aren't then you should be IMO while EFL investigate properly. Would make sense...I believe you can sign within certain conditions loans and frees under a soft embargo but it's a good holding position I think to prevent major signings.

The rules also refer to "Fair Market Value" and related parties- this will perhaps form part of Gibson's legal argument. I would also consider putting the golden share in EFL as a matter on table for clubs that take it to an external court personally- put that to a vote of member clubs, see how you like that!  In short, the risk of suspension of membership from the EFL. Putting aside that nuclear option, the other way of looking at it is that if infrastructure expenditure does not count towards expenses, nor should income of this nature count towards income. Now it isn't wholly a view I agree with, but the clause should read "Third and unrelated party or sale of a ground as moving to a new one" Words to that effect but much more legal language etc. Do you think the other 21 clubs at this meeting in June in Portugal are going to take it well from yourselves, Sheffield Wednesday and though they have gone up, trying to push for the deductions for Aston Villa? Tell me why they should...I'd be furious if I was a chairman who had played by the rules and the spirit as most had. Or for that matter, Birmingham getting punished as they did.

Yes, for FFP purposes. Johnson seems a decent player in any case agreed. The situation you are in- and why are you in it? You overspent! Badly...to me you should be docked 10-11 points as per the formula, EFL has provision to punish historic breaches within the rules- well if they bother to enforce that is. UEFA does I know that. These rules are based to varying levels on UEFA's. If they have nothing in the regs about it, that is another huge fuckup on their part but they must have as QPR got punished for offences in 2013/14. Not punished enough granted, but they were punished.

Wonder if Carson, Davies, Anya, Thorne, Martin will incur a loss- well Martin won't but he should therefore be up for sale- pure profit and wages off?

Depreciation- like I say going to look through 10-15 years of accounts. Is this work done, or work that is and has been in the pipeline? To me planned work, counting as current value is a bit odd.

I struggle though to understand why you refuse to accept- you've overspent and you've been looking at any and every loophole to try to get out of it. From Sevco 5112, to this, to the residual value- I struggle to see your argument other than it just being a technicality.

I'm not saying we don't need to get our costs under control (I won't say overspent, as that means spending more than the rules allow in my eyes, and we haven't done that) I know this, the club knows this, they've been saying it for the past few years, which is exactly why we've been selling people (yes we have also been buying people, but the club obviously feel they can do this and who am I to think we can't, they're the ones in control of the finances, and they obviously want us to remain competitive) I guess it being my club, I see the comments they make where as you don't, and you assume that they think they can carry on as they are, they don't, Mel Morris has said himself, multiple times, that we need to make cuts to our costs, he went into it in quite some detail during one of our fan forums that was available to view on Rams TV. He went into how much of the wage bill was being used on players that were not playing, and how much we would lose of that amount this summer, I can't remember the figures now, but it was interesting.

We apparently made cuts to the academy last summer, I know that's FFP exempt, but it shows that we realised we needed to make cuts, the funny thing is, this has been a fantastic year for the academy, the U18's won the league, and then the national title, and as such are now in next seasons U19 version of the Champion's League, the UEFA Youth League, so maybe streamlining it has helped with the output, maybe it led to more focus from everyone involved. It does however, show that making cuts doesn't have to have a bad effect on the output.

My point is though that that is not what the rules state, so we cannot be punished on what you, or anyone else for that matter, thinks they should state. They simply don't, and therefore it is not against the rules, it can be changed so it is against the rules in the future, but for this season and every previous season, everyone knew exactly what rules they were working to, and they worked within them, or they knowingly didn't and knew that as such they could be punished accordingly in the case of Birmingham.

QPR weren't punished retrospectively, everyone knew they were going to be punished, they tried to put it off for as long as they could by taking it via the legal route, they knew, and everyone knew, what was coming, they couldn't have a points deduction, because that was simply not in the rules at the time, they could only be punished on the rules that they broke at the time, with the punishment that was in the rules at the time, even though everyone knew for future breaches points deductions would be relevant. Also, in case you don't remember, it was us that they beat in the Play Off final that year, they broke the rules, we didn't (that was before we started to spend anything significant, Mel Morris bought into the club the day before the final if I remember rightly, he took a gamble buying at, I believe, somewhere between what the club would have been worth if we went up and what it was worth when we stayed down) they got the riches by winning that game and we didn't. I've seen your posts in this thread suggesting before the Play Off final that both us and Villa should have been stripped of it because we 'broke the rules' and it should have been someone else that had the chance to go up. Well if that was the case this time, then that should have been the case last time, and that would have been us, the team that didn't cheat the rules, the team that finished in third in the league (I saw something I think in this thread about another time when it defaulted to the team that was next in line, hence us being in third were next in line), that would/could in the case of a game against another team that didn't breach the rules have gone up and got the riches of the Premier League and we probably wouldn't be having this conversation now.

But we didn't, we had to suck it up and get on with it, which is exactly what we did.

Of course Martin would have been available for sale, but you can only sell someone if there is a buyer, there wasn't as his wages are said to be high, therefore no one wants to buy him, or pay his full wages, and he went out on loan instead. Yes this is a problem the club caused, but once done, it cannot be fixed.

In the case of George Thorne, there was no way he ever should have been worth less than we spent on him, he was a fantastic player, the best defensive midfielder in the Championship by a mile, he got injured (ACL - not the leg he'd done before, I seem to remember) I think it was 3-4 days after we bought him, in a pre season friendly. Then he finally came back and played most of the season after, and was having a good season and in the last game (before the Play Offs that we were in) an Ipswich player makes a horrendous challenge on him and snaps his leg in two. Such awful luck for both him and us (it definitely affected us for the first game of the Play Offs, and we lost heavily and although we put in a hell of a fight in the second leg, dubbed 'Istanhull' by our fans, it was too much to come back from) he came back during the season before the one just ended, and he just didn't look the same player, it was such a horrible thing to see, him looking a shadow of himself, I'm not sure he will ever be the same, too many terrible injuries, we ended up loaning him out to Luton in January, and then a few days later Jones goes to Stoke, and so Thorne plays only a few minutes in his time there. So we'll have to make a loss on him, a loss that should never have happened, but it will, so we'll have to deal with it, but it just shows you how you cannot take for granted what you will get for a player, and as such it's really hard to deal with something like that when it comes to FFP. Then there's Will Hughes, he should have gone for a lot more too, but again, an ACL in the first game of the season under Clement, both him and Bryson (also his knee, also the same game) were out for most of the season. It was those two injuries that made us panic into buying Butterfield and Johnson, probably not helped by having Clement, a rookie manager, having to deal with such a crazy situation, that no one could have predicted happening, on the first day of the season. Not saying that we as a club deserve sympathy for any of this or anything, just saying how best laid plans can change in a single moment, and what you think you'll get for someone doesn't always come to fruition, that can happen regardless of what value a player is at on the books, especially in Georges case where it was as soon as we bought him that he got his first major injury (of the two in his time with us).

Anya will more than likely incur a loss, Davies a very small one (unless we've put his value down to £0 already, as we only paid around £500k, his release clause at Hull), Carson - I'm sure theres some debate on whether he came on a free or for a small fee, either way, it won't be a lot as he came from relegated (at the time) Wigan.

[Mr Popodopolous]

1 hour ago, DerbyFan said:

I'm not saying we don't need to get our costs under control (I won't say overspent, as that means spending more than the rules allow in my eyes, and we haven't done that) I know this, the club knows this, they've been saying it for the past few years, which is exactly why we've been selling people (yes we have also been buying people, but the club obviously feel they can do this and who am I to think we can't, they're the ones in control of the finances, and they obviously want us to remain competitive) I guess it being my club, I see the comments they make where as you don't, and you assume that they think they can carry on as they are, they don't, Mel Morris has said himself, multiple times, that we need to make cuts to our costs, he went into it in quite some detail during one of our fan forums that was available to view on Rams TV. He went into how much of the wage bill was being used on players that were not playing, and how much we would lose of that amount this summer, I can't remember the figures now, but it was interesting.

We apparently made cuts to the academy last summer, I know that's FFP exempt, but it shows that we realised we needed to make cuts, the funny thing is, this has been a fantastic year for the academy, the U18's won the league, and then the national title, and as such are now in next seasons U19 version of the Champion's League, the UEFA Youth League, so maybe streamlining it has helped with the output, maybe it led to more focus from everyone involved. It does however, show that making cuts doesn't have to have a bad effect on the output.

My point is though that that is not what the rules state, so we cannot be punished on what you, or anyone else for that matter, thinks they should state. They simply don't, and therefore it is not against the rules, it can be changed so it is against the rules in the future, but for this season and every previous season, everyone knew exactly what rules they were working to, and they worked within them, or they knowingly didn't and knew that as such they could be punished accordingly in the case of Birmingham.

QPR weren't punished retrospectively, everyone knew they were going to be punished, they tried to put it off for as long as they could by taking it via the legal route, they knew, and everyone knew, what was coming, they couldn't have a points deduction, because that was simply not in the rules at the time, they could only be punished on the rules that they broke at the time, with the punishment that was in the rules at the time, even though everyone knew for future breaches points deductions would be relevant. Also, in case you don't remember, it was us that they beat in the Play Off final that year, they broke the rules, we didn't (that was before we started to spend anything significant, Mel Morris bought into the club the day before the final if I remember rightly, he took a gamble buying at, I believe, somewhere between what the club would have been worth if we went up and what it was worth when we stayed down) they got the riches by winning that game and we didn't. I've seen your posts in this thread suggesting before the Play Off final that both us and Villa should have been stripped of it because we 'broke the rules' and it should have been someone else that had the chance to go up. Well if that was the case this time, then that should have been the case last time, and that would have been us, the team that didn't cheat the rules, the team that finished in third in the league (I saw something I think in this thread about another time when it defaulted to the team that was next in line, hence us being in third were next in line), that would/could in the case of a game against another team that didn't breach the rules have gone up and got the riches of the Premier League and we probably wouldn't be having this conversation now.

But we didn't, we had to suck it up and get on with it, which is exactly what we did.

Of course Martin would have been available for sale, but you can only sell someone if there is a buyer, there wasn't as his wages are said to be high, therefore no one wants to buy him, or pay his full wages, and he went out on loan instead. Yes this is a problem the club caused, but once done, it cannot be fixed.

In the case of George Thorne, there was no way he ever should have been worth less than we spent on him, he was a fantastic player, the best defensive midfielder in the Championship by a mile, he got injured (ACL - not the leg he'd done before, I seem to remember) I think it was 3-4 days after we bought him, in a pre season friendly. Then he finally came back and played most of the season after, and was having a good season and in the last game (before the Play Offs that we were in) an Ipswich player makes a horrendous challenge on him and snaps his leg in two. Such awful luck for both him and us (it definitely affected us for the first game of the Play Offs, and we lost heavily and although we put in a hell of a fight in the second leg, dubbed 'Istanhull' by our fans, it was too much to come back from) he came back during the season before the one just ended, and he just didn't look the same player, it was such a horrible thing to see, him looking a shadow of himself, I'm not sure he will ever be the same, too many terrible injuries, we ended up loaning him out to Luton in January, and then a few days later Jones goes to Stoke, and so Thorne plays only a few minutes in his time there. So we'll have to make a loss on him, a loss that should never have happened, but it will, so we'll have to deal with it, but it just shows you how you cannot take for granted what you will get for a player, and as such it's really hard to deal with something like that when it comes to FFP. Then there's Will Hughes, he should have gone for a lot more too, but again, an ACL in the first game of the season under Clement, both him and Bryson (also his knee, also the same game) were out for most of the season. It was those two injuries that made us panic into buying Butterfield and Johnson, probably not helped by having Clement, a rookie manager, having to deal with such a crazy situation, that no one could have predicted happening, on the first day of the season. Not saying that we as a club deserve sympathy for any of this or anything, just saying how best laid plans can change in a single moment, and what you think you'll get for someone doesn't always come to fruition, that can happen regardless of what value a player is at on the books, especially in Georges case where it was as soon as we bought him that he got his first major injury (of the two in his time with us).

Anya will more than likely incur a loss, Davies a very small one (unless we've put his value down to £0 already, as we only paid around £500k, his release clause at Hull), Carson - I'm sure theres some debate on whether he came on a free or for a small fee, either way, it won't be a lot as he came from relegated (at the time) Wigan.

I agree you are moving in the right direction- that much is fairly clear in some respects- like I say you're in some ways not flagrantly in breach- see those player sales- but in other ways you are. I would have had more respect and more expectancy of leniency- not being let off but leniency- if you had used those player sales in your defence i.e. an EFL hearing.

Perhaps you should use your academy more and put a bit of a self-imposed embargo on signings then- it sounds quite promising. In fact maybe you should have had a greater ratio of academy players vs signings this last couple of seasons. I do believe, possibly wrongly though, that Waghorn and Marriott on lower wages than Vydra and Weimann- but again both? Just one IMO. That would have been another way to show willing and prove it.

Hmm, you might want to read those rules in depth- there is scope for flexibility there! EFL commission has such powers- taken from another forum but here goes:

Quote

 

A Commission may issue a decision to:

·         order a party to do or refrain from doing anything;

·         order a specific performance;

·         make a declaration on any matter to be determined;

·         issue a reprimand or warning as to the future conduct of a party;

·         order the payment of compensation to The League, any Club, any other club, Player or other person;

·         order a suspension of membership of The League;

·         order a deduction of points;

·         impose a financial penalty payable to The League;

·         recommend expulsion from membership of The League;

·         order a withdrawal or loss of benefit otherwise available to members of The League e.g. basic award or ladder payment;

·         impose an embargo on registration of Players;

·         order any other sanction as the Disciplinary Commission may think fit; and

·         order that interest be payable on any sums awarded under this Regulation for such period and at such rates as the Disciplinary Commission thinks fit.

 

That to me, combined with related parties rules, fair market value, the quite likely anger of 20 or more Championship rivals- that gives enough scope for a review and punishment if found guilty. I particularly like the "Order any other sanction as the Disciplinary Commission may see fit". That gives ample scope to deduct points, refuse to register new signings etc. In fact as they see fit!

That was unlucky granted, losing to a side who broke it in such an egregious way as QPR, Nonetheless the old rules had major flaws...the new rules offer scope to demote from playoffs so this should've happened IMO. I think the other one you refer to was when Swindon a while ago got denied promotion out the 2nd tier after winning the playoffs for financial irregularities and actually demoted down to 3rd tier- assuming the next highest side went up.

The old rules were badly flawed- like history, can't necessarily judge by standards of today. QPR should've had a harsher punishment undoubtedly.

Can't fix it, but still did it- therefore should be punished I'd say.

That sounds bad but then we've had a loanee get injured first game on loan, other loanees get injured for the whole spell early in a game- it is bad but it is sadly a part of the game. Hard on the player and the club though and definitely can affect financial positions- but then you sell some more, or you show more restraint in the market- maybe use Martin and only sign one out of Waghorn and Marriott or better yet loan Martin out and only sign one of those 2, or sell Bogle- who would definitely have buyers. It's tough but there are still choices that can be made to mitigate!

Now how exactly does your player valuation model work? As in who decides it...the club? Well that's not open to abuse at all - to me such an outlier of Accounting amortisation of players model should be overseen by a proper external body- I would say the EFL but I have little faith in them!

Like I say if you expect the other 20 or so Championship clubs- maybe 21, 22 to just take this on the chin then I don't see why they would!

PPS

Swiss Ramble has broken down your position somewhat. Unsure what the wages adjustment means or is being adjusted for, but it shows you would have been £6-7m over without the owner selling the ground to himself. Can well see why Gibson is going after Derby given there was one point in it.

6 point deduction then one year rulings, assessments for the remainder of the period.

Edited June 3, 2019 by Mr Popodopolous

[bcfc01]

3 hours ago, DerbyFan said:

I'm female 

Never mind..

Thought you were very circumspect 

[DerbyFan]

56 minutes ago, Mr Popodopolous said:

I agree you are moving in the right direction- that much is fairly clear in some respects- like I say you're in some ways not flagrantly in breach- see those player sales- but in other ways you are. I would have had more respect and more expectancy of leniency- not being let off but leniency- if you had used those player sales in your defence i.e. an EFL hearing.

Perhaps you should use your academy more and put a bit of a self-imposed embargo on signings then- it sounds quite promising. In fact maybe you should have had a greater ratio of academy players vs signings this last couple of seasons. I do believe, possibly wrongly though, that Waghorn and Marriott on lower wages than Vydra and Weimann- but again both? Just one IMO. That would have been another way to show willing and prove it.

Hmm, you might want to read those rules in depth- there is scope for flexibility there! EFL commission has such powers- taken from another forum but here goes:

That to me, combined with related parties rules, fair market value, the quite likely anger of 20 or more Championship rivals- that gives enough scope for a review and punishment if found guilty. I particularly like the "Order any other sanction as the Disciplinary Commission may see fit". That gives ample scope to deduct points, refuse to register new signings etc. In fact as they see fit!

That was unlucky granted, losing to a side who broke it in such an egregious way as QPR, Nonetheless the old rules had major flaws...the new rules offer scope to demote from playoffs so this should've happened IMO. I think the other one you refer to was when Swindon a while ago got denied promotion out the 2nd tier after winning the playoffs for financial irregularities and actually demoted down to 3rd tier- assuming the next highest side went up.

The old rules were badly flawed- like history, can't necessarily judge by standards of today. QPR should've had a harsher punishment undoubtedly.

Can't fix it, but still did it- therefore should be punished I'd say.

That sounds bad but then we've had a loanee get injured first game on loan, other loanees get injured for the whole spell early in a game- it is bad but it is sadly a part of the game. Hard on the player and the club though and definitely can affect financial positions- but then you sell some more, or you show more restraint in the market- maybe use Martin and only sign one out of Waghorn and Marriott or better yet loan Martin out and only sign one of those 2, or sell Bogle- who would definitely have buyers. It's tough but there are still choices that can be made to mitigate!

Now how exactly does your player valuation model work? As in who decides it...the club? Well that's not open to abuse at all - to me such an outlier of Accounting amortisation of players model should be overseen by a proper external body- I would say the EFL but I have little faith in them!

I need to check the accounts, but basically we started to spend more on players in the summer of 2015, when we appointed Clement, we bought Thorne before that, in summer 2014, but I seem to remember it being mentioned that he was basically paid for with what we earned from the Play Offs in 2014.

I've found this in the accounts for this year about how we value players:

Quote

Player registrations, levies and associated costs

The costs associated with acquiring players' registration, inclusive of EFL levies, or extending their contracts, including agent fees, are capitalised and amortised over the period of the respective players' contracts after consideration of their residual values.

Where a contract is renegotiated, the unamortised costs, together with the new costs relating to the contract extension, are amortised over the term of the new contract. Residual values are reviewed by the board on an ongoing basis over the course of the season by reference to active market values.

Under the conditions of certain transfer agreements, further fees may become payable in the event of players or the Company achieving specified outcomes. Costs are capitalised at the date of the achievement with any future costs considered to be contingent liabilities.

The profit or loss on sale of players' registrations represents the proceeds of sale less the net book value of the registration, levy and associated costs.

The Company undertakes annual impairment reviews for player registrations.

 

I forgot to mention, things that have happened to the stadium (that I can remember) since the 2007 valuation, I've no idea how much these affect the valuation, but they have been done, and surely can only affect it in a positive way:

• big screen inside
• 2 big screens outside
• new hybrid pitch that included new full undersoil heating and all of the works and the artificial pitch perimeter (included digging it all up rather than making the pitch higher as some do, not sure when the last major pitch works was before that)
• new led perimeter boards (they're all led now, including the top of the stand facing part, I think there was also a previous set of led boards since 2007)
• new PA system (it was said at the time to be the best one you could get)
• new led floodlights
• painted the entire roof steel black (it was previously white)
• all the other painting works and general tidying up
• the club took back space that had been let out and made a new restaurant (The Yard)
• then took back what was a Starbucks and made an in house coffee shop (The Back Yard)
• full overhaul of the ticket office (I think this has been done a few times)
• we have our own Rams TV studio in the stadium (not the one for Sky)
• we use a 10 camera mix for Rams TV broadcasts, so theres been work done to make all of the camera locations - I believe this also includes basically the stuff that's in the portable vans that Sky use in a room near to the Rams TV studio - so all the camera views and all the technology that that requires
• major overhaul of the directors box area
• major overhaul of the boxes and hospitality area
• heating in the concourse
• 8 small screens (making 2 big screens of 4 each) in both the ticket office window and the megastore windows.
• new screens in all of the concourses and hospitality areas

that's just the things I can remember, and the vast majority is very recent, ie. since Mel Morris.

Re. The disciplinary commission, that's only a problem if you've broken the rules, they can investigate but if the rules are not broken they have no mandate to punish. As the EFL already okayed the sale before it happened I don't see how the commission can find we've done anything wrong, there would surely be comeback on the EFL if that was the case.

Edited June 3, 2019 by DerbyFan
Adding

[DerbyFan]

1 hour ago, Mr Popodopolous said:

Swiss Ramble has broken down your position somewhat. Unsure what the wages adjustment means or is being adjusted for, but it shows you would have been £6-7m over without the owner selling the ground to himself. Can well see why Gibson is going after Derby given there was one point in it.

6 point deduction then one year rulings, assessments for the remainder of the period.

Am I missing something, how can 5+5+5=14, and (3)+(5)=(9)? 

I think the £5m is an arbitrary figure for having a Cat 1 academy, not the exact amount that would be excluded for FFP purposes, I'm not sure how the accounts are interlinked, but the most recent accounts for the academy show a loss of around £12m, the ones from the year before showing a loss of around £6m I think it was. I believe this to have increased due to a lot of work being done on the academy, it has expanded to include around 5 or 6 more pitches but I can't be sure when exactly that work took place.

Edited June 3, 2019 by DerbyFan
Adding re. academy