AnotherDerbyFan Posted September 22, 2021 Report Share Posted September 22, 2021 7 hours ago, Mr Popodopolous said: Still trying to grasp and wangle their way out, some fans still of that mindset... Erm, I can't see the EFL accepting that!! How do you give away for free as part of a deal, a stadium that a) 'Sold' for £81.1m in 2018 and b) Has a lease of, can't recall but it's either 20-25 years. The annual rent is about £3m too low as well possibly. Football Creditors had to be paid in full I thought? HMRC less clearcut. Obviously, whislt still owner he would have to sell the stadium at fair value (lower now due to covid), but once sold, he'd be able to gift it to the (eventual) new owners as an unrelated party, surely? Quote Link to comment Share on other sites More sharing options...
BTRFTG Posted September 22, 2021 Report Share Posted September 22, 2021 53 minutes ago, Mr Popodopolous said: The latest idea I've seen on Twitter is. Mel Morris gives back the Stadium to Derby for £1 or a nominal fee and then they mortgage it for £50m. Will Mel pay the cash to MSD as well, can the club sub-mortgage it just like that. How do the club defend the £81.1m transaction- £1 in an FFP context? Surely the EFL would have something to say about that. That makes no sense. The company (capitalised at £1) who owns the stadium (as supposedly an investment vehicle,) values the asset at just over £81m but has creditors within one year at just over £3k more than the value of the asset. Interestingly, one might have assumed to see rental income in their accounts but none appears, hence they'll doubtless argue it appears as a 'capital appreciation vehicle' only. Therein lies one huge problem. The value of the asset is intrinsically linked to the amount of income it might generate, plus wider land/asset appreciation. The £81m figure was doubtless reached by considering a legal commitment by Derby County FC to lease the stadium back at £Xm per season for Y seasons. Now if they forego that, what other entity might desire to lease a Sports Stadium in Derby and at what price? If the answer is nobody or peanuts, the asset value downgrades overnight and one wonders whether creditor loans (where the money came to buy it in the first place) are secured against the freehold or lease income? Giving the stadium to the Administrator makes little sense as it strengthens funds available to creditors and lessens the prospect of getting monies back to those who purchased the stadium. The only reason for so doing would be high poker stakes, if one thought long-term Derby would come good, start making a Kings ransom and one might claw that back through club profits not the stadium vehicle (assuming one still held a stake in the club.) Pigs will fly first. 2 Quote Link to comment Share on other sites More sharing options...
BTRFTG Posted September 22, 2021 Report Share Posted September 22, 2021 8 minutes ago, AnotherDerbyFan said: Obviously, whislt still owner he would have to sell the stadium at fair value (lower now due to covid), but once sold, he'd be able to gift it to the (eventual) new owners as an unrelated party, surely? Once sold there's nothing left to gift and Morris already has no say over the club. There's also doubt that Morris funded the stadium acquisition wholly with his own money. What if he's borrowed some if it himself? Were I a potential buyer willing to pick up the MSD, HMRC & football debt that would have to be subject to Gellaw selling me the stadium at the price I'd demand. With Hobson's I'd expect to pay no more that £15-20m for it. Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 22, 2021 Report Share Posted September 22, 2021 (edited) 32 minutes ago, AnotherDerbyFan said: Obviously, whislt still owner he would have to sell the stadium at fair value (lower now due to covid), but once sold, he'd be able to gift it to the (eventual) new owners as an unrelated party, surely? Erm, hard to say- I've a feeling the EFL would not be particularly amused let's say...£81.1m-£1/give away. Would there be no tax implications as Rob mentioned? Might depend on what you mean by to the new owners- under the club group, that'd pose a serious FFP issue. If it's to the new owners and rented to the club then perhaps. The accounts that took at least a part of Covid into account still had the value at around £81.1m- talking the Gellaw 202 and 204. ...Then there's the MSD loans secured against it, what happens with these? MSD don't strike me as the type to let secured assets be sublet/submortgaged whatever. Would Mel keep paying them off? I'm basically overall suggesting that Derby cannot have their cake and eat it. Edited September 22, 2021 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 22, 2021 Report Share Posted September 22, 2021 (edited) 24 minutes ago, BTRFTG said: That makes no sense. The company (capitalised at £1) who owns the stadium (as supposedly an investment vehicle,) values the asset at just over £81m but has creditors within one year at just over £3k more than the value of the asset. Interestingly, one might have assumed to see rental income in their accounts but none appears, hence they'll doubtless argue it appears as a 'capital appreciation vehicle' only. Therein lies one huge problem. The value of the asset is intrinsically linked to the amount of income it might generate, plus wider land/asset appreciation. The £81m figure was doubtless reached by considering a legal commitment by Derby County FC to lease the stadium back at £Xm per season for Y seasons. Now if they forego that, what other entity might desire to lease a Sports Stadium in Derby and at what price? If the answer is nobody or peanuts, the asset value downgrades overnight and one wonders whether creditor loans (where the money came to buy it in the first place) are secured against the freehold or lease income? Giving the stadium to the Administrator makes little sense as it strengthens funds available to creditors and lessens the prospect of getting monies back to those who purchased the stadium. The only reason for so doing would be high poker stakes, if one thought long-term Derby would come good, start making a Kings ransom and one might claw that back through club profits not the stadium vehicle (assuming one still held a stake in the club.) Pigs will fly first. Ah yes, there's a bit on that too- putting aside the less than likely chances of the stadium being gifted back. Rent Club are supposed to be paying £1.1m per season on an £81.1m transaction or something in that ballpark. Yet if you read the written reasons for the first case, the valued rent- as in the valuation given by the Independent Valuer that DCFC themselves hired- was £4.16m per season. There is also a reference to rental payments from Club DCFC and Stadia DCFC- what is less clear is whether they would be included in the £1.1m ie £1.1m=Club + Club DCFC + Stadia DCFC or if Rent=£1.1m (Club) + Club DCFC + Stadia DCFC=Actual rent. EFL still need to pursue that particular avenue as well, because £1.1m per season on an £81.1m transaction is absurd. Well out of kilter with other grounds as a % of sale price etc. Edited September 22, 2021 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
downendcity Posted September 23, 2021 Report Share Posted September 23, 2021 Looking back over Derby’s last few seasons, they are littered with irony. As a generalisation, it must be ( for Derby fans who lauded his actions as being clever than the EFL) bitter irony that the ffp system that Mel Morris worked so hard to circumvent was put in place to protect clubs from the activities of owners just like him and avoid exactly what has now happened. It is ironic that, when eventually bought to book for having cheated the system, Mel Morris proudly announced that because of the transfer embargo they would have to play youngsters and use their academy, as though he was the first to have thought of that idea. The irony being that other clubs had taken just that step, among others, in order to comply with ffp when the new rules came into being. Had they taken the same steps, then they would not have been facing embargo and worse that was to follow. In the same statement, Mel Morris also said that had they complied with the new ffp rules, it would have made Derby less competitive on the pitch. The irony is that had he taken the right steps at the right time then, while it might have made them less competitive, ( in just the same way it did for many other clubs that did take the right steps in order to comply) they would at least remain relatively competitive in the championship, rather than contemplating life in league 1 -that is if they still exist after this season. How long have we had to listen to Derby fans telling all those criticising the actions of Morris over the sale of Pride Park and , more recently, their accounting practices, that other clubs’ fans’ are just jealous that they didn’t /couldn’t do the same, and how Morris has had one over the EFL. The irony is that those same fans are now not only contemplating relegation this season, but must genuinely be worried about the future of their club. Rather than looking for third parties to blame, in particular Steve Gibson and the EFL, most now realise that the focus for their anger is, and always should have been , the club’s owner - the man they believed and lauded as though he was some sort of knight in shining armour fighting back against the EFL, who of course had a vendetta against Morris and Derby. The ultimate irony is that, had Morris bitten the bullet at the first ffp reckoning, admitted a breach of ffp limits and taken a points deduction, the worst outcome would have been no chance of promotion. It is also likely the EFL would have organised a business plan, as they have with others, which would have put Derby in a much better position to cope with the financial effects of the pandemic. This in turn would have likely avoided the need for administration and the club would have retained ownership of Pride Park. Of course hindsight is a wonderful thing, but I bet that Morris wishes he could turn back the clock, as do the Derby fans. Luckily we have an owner that exercised foresight as far as ffp was concerned, rather than hindsight and, while he might not get all his decisions right, I for one would rather the club be in his hands going forward. 9 4 Quote Link to comment Share on other sites More sharing options...
Roger Red Hat Posted September 23, 2021 Report Share Posted September 23, 2021 1 minute ago, downendcity said: Looking back over Derby’s last few seasons, they are litter Correct! Quote Link to comment Share on other sites More sharing options...
downendcity Posted September 23, 2021 Report Share Posted September 23, 2021 21 minutes ago, Roger Red Hat said: Correct! I’ve just cleaned out our cat’s litter and can confirm that you are indeed absolutely correct. Having said that I would also add that our cat is a lot cleaner! 1 Quote Link to comment Share on other sites More sharing options...
BTRFTG Posted September 23, 2021 Report Share Posted September 23, 2021 7 hours ago, Mr Popodopolous said: Ah yes, there's a bit on that too- putting aside the less than likely chances of the stadium being gifted back. Rent Club are supposed to be paying £1.1m per season on an £81.1m transaction or something in that ballpark. Yet if you read the written reasons for the first case, the valued rent- as in the valuation given by the Independent Valuer that DCFC themselves hired- was £4.16m per season. There is also a reference to rental payments from Club DCFC and Stadia DCFC- what is less clear is whether they would be included in the £1.1m ie £1.1m=Club + Club DCFC + Stadia DCFC or if Rent=£1.1m (Club) + Club DCFC + Stadia DCFC=Actual rent. EFL still need to pursue that particular avenue as well, because £1.1m per season on an £81.1m transaction is absurd. Well out of kilter with other grounds as a % of sale price etc. But is there any evidence rent has ever been paid? It's not in the investment holding accounts and Gellaw 203 (I hope you're sitting down,) have yet to file accounts which are long overdue. As you say, £1.1m per season in rent would give nowhere near a valuation of £81m for the stadium. 2 Quote Link to comment Share on other sites More sharing options...
BTRFTG Posted September 23, 2021 Report Share Posted September 23, 2021 35 minutes ago, TomF said: Is Pride Park worth £50m? I mean its a nice stadium but it is actually nearly 25 years old. According the accounts of the company that owns it it's worth £81.1m.... 1 Quote Link to comment Share on other sites More sharing options...
Davefevs Posted September 23, 2021 Report Share Posted September 23, 2021 1 hour ago, downendcity said: Looking back over Derby’s last few seasons, they are littered with irony. As a generalisation, it must be ( for Derby fans who lauded his actions as being clever than the EFL) bitter irony that the ffp system that Mel Morris worked so hard to circumvent was put in place to protect clubs from the activities of owners just like him and avoid exactly what has now happened. It is ironic that, when eventually bought to book for having cheated the system, Mel Morris proudly announced that because of the transfer embargo they would have to play youngsters and use their academy, as though he was the first to have thought of that idea. The irony being that other clubs had taken just that step, among others, in order to comply with ffp when the new rules came into being. Had they taken the same steps, then they would not have been facing embargo and worse that was to follow. In the same statement, Mel Morris also said that had they complied with the new ffp rules, it would have made Derby less competitive on the pitch. The irony is that had he taken the right steps at the right time then, while it might have made them less competitive, ( in just the same way it did for many other clubs that did take the right steps in order to comply) they would at least remain relatively competitive in the championship, rather than contemplating life in league 1 -that is if they still exist after this season. How long have we had to listen to Derby fans telling all those criticising the actions of Morris over the sale of Pride Park and , more recently, their accounting practices, that other clubs’ fans’ are just jealous that they didn’t /couldn’t do the same, and how Morris has had one over the EFL. The irony is that those same fans are now not only contemplating relegation this season, but must genuinely be worried about the future of their club. Rather than looking for third parties to blame, in particular Steve Gibson and the EFL, most now realise that the focus for their anger is, and always should have been , the club’s owner - the man they believed and lauded as though he was some sort of knight in shining armour fighting back against the EFL, who of course had a vendetta against Morris and Derby. The ultimate irony is that, had Morris bitten the bullet at the first ffp reckoning, admitted a breach of ffp limits and taken a points deduction, the worst outcome would have been no chance of promotion. It is also likely the EFL would have organised a business plan, as they have with others, which would have put Derby in a much better position to cope with the financial effects of the pandemic. This in turn would have likely avoided the need for administration and the club would have retained ownership of Pride Park. Of course hindsight is a wonderful thing, but I bet that Morris wishes he could turn back the clock, as do the Derby fans. Luckily we have an owner that exercised foresight as far as ffp was concerned, rather than hindsight and, while he might not get all his decisions right, I for one would rather the club be in his hands going forward. Mel Morris - from Candy Crush to Derby Crush. 1 Quote Link to comment Share on other sites More sharing options...
Hxj Posted September 23, 2021 Report Share Posted September 23, 2021 9 hours ago, AnotherDerbyFan said: Obviously, whislt still owner he would have to sell the stadium at fair value (lower now due to covid), but once sold, he'd be able to gift it to the (eventual) new owners as an unrelated party, surely? Just to ensure that the record is correct Morris does not own the Stadium so he cannot do anything with it. The Stadium is owned by a company that Morris owns, but it has a charge or two on it in respect of the debt owed to MSD. So it can't be sold or given away until that charge is paid up in full (including interest, default interest along with the costs and fees of lender). It would also appear that that company, or a parent owed the football club the purchase price in June 2018. If that is still the case (no one outside a small group knows as no accounts have ben submitted since then) then the Administrators will have to seek to recover the debt from the Stadium companies, which I guess will force the Stadium companies into administration or liquidation, which will mean that MSD will control everything. If of course the Stadium companies have paid for the stadium in full then it is difficult to see how the Football Club is in administration. 3 Quote Link to comment Share on other sites More sharing options...
Davefevs Posted September 23, 2021 Report Share Posted September 23, 2021 4 minutes ago, Hxj said: Just to ensure that the record is correct Morris does not own the Stadium so he cannot do anything with it. The Stadium is owned by a company that Morris owns, but it has a charge or two on it in respect of the debt owed to MSD. So it can't be sold or given away until that charge is paid up in full (including interest, default interest along with the costs and fees of lender). It would also appear that that company, or a parent owed the football club the purchase price in June 2018. If that is still the case (no one outside a small group knows as no accounts have ben submitted since then) then the Administrators will have to seek to recover the debt from the Stadium companies, which I guess will force the Stadium companies into administration or liquidation, which will mean that MSD will control everything. If of course the Stadium companies have paid for the stadium in full then it is difficult to see how the Football Club is in administration. So to summarise for a non-accountant. Please correct anything I get wrong. Derby owned stadium - value of asset in books Derby sold stadium to another “company x” for £81.1m, realising profit of £x that stopped FFP issues (in their eyes). Derby pay rent for use of stadium. Company x borrowed money from MSD to purchase the stadium, hence charge on it. Company x might not have paid fully for the stadium yet? If Company x has paid for it, club might still be in FFP trouble because of dodgy amortisation method and breaking FFP limits, but shouldn’t be in administration, e.g. why do they still have a £30m HMRC bill outstanding. Is it this bit that makes you think Company x hasn’t paid for it yet? Ta. Quote Link to comment Share on other sites More sharing options...
Hxj Posted September 23, 2021 Report Share Posted September 23, 2021 7 minutes ago, Davefevs said: Derby owned stadium - value of asset in books Derby sold stadium to another “company x” for £81.1m, realising profit of £x that stopped FFP issues (in their eyes). Derby pay rent for use of stadium. All agreed. 8 minutes ago, Davefevs said: Company x borrowed money from MSD to purchase the stadium, hence charge on it. Unlikely. The stadium sale was in 2018. The MSD Charges were put in place in August and November 2020. So it looks like the MSD money was used to fund cash flow across all entities not for payment for the stadium. 11 minutes ago, Davefevs said: Company x might not have paid fully for the stadium yet? It may not have paid anything. 12 minutes ago, Davefevs said: If Company x has paid for it, club might still be in FFP trouble because of dodgy amortisation method and breaking FFP limits, but shouldn’t be in administration, e.g. why do they still have a £30m HMRC bill outstanding. Is it this bit that makes you think Company x hasn’t paid for it yet? Exactly. Along with Cocu and Keogh and the late payment of transfer fees. The alternative is that they have burnt through £81 million cash in roughly three years. I could have paid off all the debts and still had a great time with the remaining £20 million or so .......... 2 Quote Link to comment Share on other sites More sharing options...
downendcity Posted September 23, 2021 Report Share Posted September 23, 2021 37 minutes ago, Davefevs said: So to summarise for a non-accountant. Please correct anything I get wrong. Derby owned stadium - value of asset in books Derby sold stadium to another “company x” for £81.1m, realising profit of £x that stopped FFP issues (in their eyes). Derby pay rent for use of stadium. Company x borrowed money from MSD to purchase the stadium, hence charge on it. Company x might not have paid fully for the stadium yet? If Company x has paid for it, club might still be in FFP trouble because of dodgy amortisation method and breaking FFP limits, but shouldn’t be in administration, e.g. why do they still have a £30m HMRC bill outstanding. Is it this bit that makes you think Company x hasn’t paid for it yet? Ta. I wonder whether they never thought ACTUAL money would ever need to change hands for the stadium “sale”. 1 Quote Link to comment Share on other sites More sharing options...
downendcity Posted September 23, 2021 Report Share Posted September 23, 2021 39 minutes ago, Davefevs said: So to summarise for a non-accountant. Please correct anything I get wrong. Derby owned stadium - value of asset in books Derby sold stadium to another “company x” for £81.1m, realising profit of £x that stopped FFP issues (in their eyes). Derby pay rent for use of stadium. Company x borrowed money from MSD to purchase the stadium, hence charge on it. Company x might not have paid fully for the stadium yet? If Company x has paid for it, club might still be in FFP trouble because of dodgy amortisation method and breaking FFP limits, but shouldn’t be in administration, e.g. why do they still have a £30m HMRC bill outstanding. Is it this bit that makes you think Company x hasn’t paid for it yet? Ta. My summary: Oh what a tangled web we weave when first we practice to deceive! Big Tone style summary: When you're in a shithole in the midlands, stop digging 2 Quote Link to comment Share on other sites More sharing options...
Davefevs Posted September 23, 2021 Report Share Posted September 23, 2021 Quote Link to comment Share on other sites More sharing options...
Monkeh Posted September 23, 2021 Report Share Posted September 23, 2021 11 hours ago, Mr Popodopolous said: The latest idea I've seen on Twitter is. Mel Morris gives back the Stadium to Derby for £1 or a nominal fee and then they mortgage it for £50m. Will Mel pay the cash to MSD as well, can the club sub-mortgage it just like that. How do the club defend the £81.1m transaction- £1 in an FFP context? Surely the EFL would have something to say about that. They can't and would get a further harsher points deduction, But as they are ****** anyway may as well accept it, Although by the time this is all sorted there is a very real chance of Derby being a league 2 or even a non league club, that's how serious it is Quote Link to comment Share on other sites More sharing options...
Hxj Posted September 23, 2021 Report Share Posted September 23, 2021 If you can get it BBC Radio Derby are live at the Administrators' press conference at 11 am today. Quote Link to comment Share on other sites More sharing options...
BS3City Posted September 23, 2021 Report Share Posted September 23, 2021 11 minutes ago, Davefevs said: That looks good to me... Quote Link to comment Share on other sites More sharing options...
RoystonFoote'snephew Posted September 23, 2021 Report Share Posted September 23, 2021 (edited) 12 minutes ago, BS3City said: That looks good to me... It would look even better if the further deduction of 9 points for FFP breaches was applied and it read minus 11. Edited September 23, 2021 by RoystonFoote'snephew Typo alteration 3 1 Quote Link to comment Share on other sites More sharing options...
BetterRedthanBlue Posted September 23, 2021 Report Share Posted September 23, 2021 Going onto a point raised by @BTRFTG is there any evidence that derby have paid rent on the stadium? Or is it contained in accounts that aren't on companies House? Because surely if no rent has been paid that would incur an additional penalty? 1 Quote Link to comment Share on other sites More sharing options...
AnotherDerbyFan Posted September 23, 2021 Report Share Posted September 23, 2021 1 hour ago, Hxj said: The alternative is that they have burnt through £81 million cash in roughly three years. I could have paid off all the debts and still had a great time with the remaining £20 million or so .......... Not forgetting income during the 18/19, 19/20 and 20/21 seasons. Sevco 5112 turnover in 17/18 was £29.1m. 18/19 & 19/20 - likely averaging out at £30m. Playoff final (vs semi), cup runs with games away at Chelsea, Man Utd and on TV. Offset by c£5m loss in income due to Covid 20/21 - c£15m due to no match receipts or commercial/hospitality. Player sales and compensation for managers during that period of roughly £25m - Vydra, Weimann, Jerome, Luke Thomas, Bogle, Lowe, Whittaker, Bennett, Evans, Holmes, Delap, Gordon, 3 youngsters to Man Utd, Rowett, Lampard Along with the stadium that would be £180m cash. With a vastly reduced wage bill, I'm highly doubtful we could have burnt through all of that in just over 3 years. Quote Link to comment Share on other sites More sharing options...
East Londoner Posted September 23, 2021 Report Share Posted September 23, 2021 Apologies if this has been asked already, I’ve seen people raising the possibility of liquidation but how is this any worse than the Portsmouth scenario for example when the debt was like double or is it that the stadium sale is what might tip it over the edge? Quote Link to comment Share on other sites More sharing options...
Monkeh Posted September 23, 2021 Report Share Posted September 23, 2021 7 minutes ago, walnutroof said: Apologies if this has been asked already, I’ve seen people raising the possibility of liquidation but how is this any worse than the Portsmouth scenario for example when the debt was like double or is it that the stadium sale is what might tip it over the edge? Portsmouth almost got liquidated they were very lucky If Derby don't find a buyer willing to take on a club with a mountain of debt and no ownership of their facilities then they will go the same way as Chester or Hereford 1 Quote Link to comment Share on other sites More sharing options...
thatchersgold Posted September 23, 2021 Report Share Posted September 23, 2021 Will they also be getting the 9 point deduction for breaking financial rules which they were close to agreeing? Quote Link to comment Share on other sites More sharing options...
Monkeh Posted September 23, 2021 Report Share Posted September 23, 2021 Just now, thatchersgold said: Will they also be getting the 9 point deduction for breaking financial rules which they were close to agreeing? Yes Quote Link to comment Share on other sites More sharing options...
thatchersgold Posted September 23, 2021 Report Share Posted September 23, 2021 59 minutes ago, Monkeh said: Yes Will that be immediate? Or next season Quote Link to comment Share on other sites More sharing options...
Davefevs Posted September 23, 2021 Report Share Posted September 23, 2021 2 minutes ago, thatchersgold said: Will that be immediate? Or next season Asap. Quote Link to comment Share on other sites More sharing options...
BTRFTG Posted September 23, 2021 Report Share Posted September 23, 2021 4 hours ago, Hxj said: The Stadium is owned by a company that Morris owns, but it has a charge or two on it in respect of the debt owed to MSD. In this twisted web it may be worth being pedantic in saying a company of which, by association, Morris is sole director, though it may not necessarily follow he is the beneficial owner. I've seen elsewhere suggestion that funding may have come from him and other parties, excluding MSD. Quote Link to comment Share on other sites More sharing options...
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