G STAR RAM

2 hours ago, europia said:

If it's not obvious to you: 

The reckless and chaotic financial management that brought humiliation and dishonour to a once great football club, and almost its total demise. 

Its only not obvious to me as I have zero knowledge of how the club was operating at the time or how much input or influence Pearce had on decisions. Having been lucky, or unlucky, enough to have met Morris it would not surprise me if he was running the show himself. 

2 hours ago, kevinhectoring said:

 You’ll know better than I do, but I’m thinking ICAEW review certainly does not constitute their sign off on every technical point that underpins an audit. Or indeed on any technical point … 
I like ‘having been able to determine’.  The IDC knows that on appeal, evidence is not reconsidered so comments like that are included to reduce the likelihood their judgement is successfully appealed. (No one likes being overturned.) Did we put forward evidence we had in fact carried out the determination in a consistent manner? 

Having be subject to audit file reviews by the ICAEW in the past, I can assure you they are very thorough.

1 hour ago, kevinhectoring said:

The stadium was let at an undervalue for a start. And I’d think that at the very least the ongoing stadium rental payable by the club would have been set off against the deferred purchase price.

If you look at 202’s balance sheet before the sale to DC the payable to the club will indicate how much of the £82 m was actually paid over.  

Impossible to tell from their accounts 

1 hour ago, duncanjwitham said:

I don't think it was anything to do with that.  From what I understood at the time (so my memory could be a bit flaky on this), it was basically a way of re-valuing the stadium as an asset the club held.  We went from having a stadium valued at ~£40m (or some similar figure, I can't remember exactly) to one valued at ~£80m, meaning the club had made a paper profit of £40m without doing anything.  But those type of profits were explicitly excluded from FFP calculations, so to actually be able to use that profit for FFP, we had to physically sell the stadium out of the direct ownership group.  So that £40m profit basically offset the amortization on the purchases of Johnson/Butterfield/Ince etc for a few years (because of the rolling 3-year FFP windows).  

I was meaning I don't think the club benefited from the cash following the sale, think it merely covered cash MM had previously injected into the club.

£20 a match isn't bad value I guess if we are in the Championship. 

A bit on the high side for the current standard of football we are watching I'd say.

8 minutes ago, kevinhectoring said:

Are these really findings of the IDC   ?

Perhaps not the findings but, yes, it was recorded in the report by the IDC.

9 minutes ago, Ghost of Clough said:

Selling the stadium was a mechanism to spend MORE under P&S rules, and isn't a sign of an owner unwilling to continue funding the club - as per all the other clubs to have done the same and not gone into administration.

My only argument against this is that I am very doubtful that any money changed hands with regards to the stadium sale.

I think instead it reduced the amount owed to MM via his inter-company loans.

So it was used to cover his previous financing of the club, rather than his financing going forward.

Just to be clear hear that is my own thoughts on what happened, not facts!

11 minutes ago, RoyMac5 said:

Yeah not Mel.

Don't know, it was just a suggestion. 

I don't think many owners come up with their accounting policies, that is what they pay their professional advisers for.

9 minutes ago, RoyMac5 said:

And through all of this who do people think came up with the 'ideas' for dealing with the strictures of FFP? Whilst Mel might have spent the money I can't believe he came up with the accounting 'trickery'.

The ground sale had been done by numerous other clubs so that wasn't something new invented by us.

The amortisation method could have been suggested by the accountants/auditors?

10 minutes ago, Leeds Ram said:

I'll use the word 'unique' policy in the future as that's what it was. As I've said in other posts I think the way the club was ran we now know was strategically poor, tens of millions were wasted and we alienated ourselves from the governing body. We were also the only club in the top 2 divisions to face such a crisis post covid. I'm not sure how us being in that position made us 'more prepared than most' for pre covid. To me, it simply does not add up. 

Can't disagree that we were poorly run, as is pretty much every club it the owners should fall on hard times or pull the plug. 

The other clubs in the Championship received funding from the EFL to help with cash flow problems post Covid, we didn't and were forced to take out loans at ridiculous interest rates. 

9 minutes ago, Leeds Ram said:

Do you really think Pride Park is worth 80 million quid... At the time I'm pretty sure it was widely regarded this was a very high end valuation. Even if it was a correct valuation selling off assets is hardly a sign of confidence... 

I don't know as I am not a commercial property valuer. But one of the most highly respected commercial property valuers believed that given its potential it was worth £80m.

From the findings of the IDC it was valued even higher than that but the EFL asked us to reduce the valuation, which we duly did only to then be charged with using the EFLs recommended valuation.

The sale of the ground, and the way that it was covered up and not disclosed to the fans, is the thing that irks me most, especially when there was a fans forum and neither Morris or Pearce thought it was worthy of mention.

5 minutes ago, Leeds Ram said:

There are levels and levels. We weren't operating like a Preston or a Coventry or a Luton. We were operating closer to a Villa, Leeds and Stoke model. In my opinion, those models are inherently dangerous and if you don't have billions (which Mel never did) then it adds an extra layer of risk. You add in the 'unique' amortisation policy, selling off PP to the owner at an overinflated price, buying players which it turned out we couldn't fully pay for and the MSD loan it all starts to look like an absolute shambles... which it was. We don't know the full circumstances as to the timeline when Mel decided he'd pull the funding but I doubt he woke up one morning and said 'f*** this I'm pulling the plug'. Rumours had already been circulating that there were financial problems before we went into administration after all. 

I think pretending Pearce had no control over the running of the club as CEO is slightly ridiculous. Also pretending we were run 'just like every other club' isn't exactly true either. We enacted policies to maximise our financial leverage and when the capital ran out the floor dropped out from underneath us. In doing so we alienated other clubs and the organisation running our league who bore a grudge against us until a new owner took over. 

Now personally, I don't think it's good enough for the CEO at the time who still remains in his job merely to say 'I'd rather not discuss it'. Well, I and 30,000 others would rather not have seen the club almost liquidated, the academy pilfered and a relegation forced upon us. I'm sure the people who lost their jobs would rather not have seen that happen and the vendors who lost money would rather have been paid on time and in the full amount. To me it just stinks that he takes that attitude given what has happened. 

Once again you are referring to an over inflated price of the stadium, something which experts in the field and an Independent Disciplinary Commission disagree with.

To form a view, should you not be using facts, rather than your own personal views?

4 minutes ago, Leeds Ram said:

Well not really no. In my field, there is a range of different views on legitimacy- one person may say something is legitimate another person may reasonably contest that point. Again, I'm not an accountant so on the more technical details I can't contest them. 

If a business cannot sustain itself without regular large infusions of cash it makes it functionally non-viable does it not?  Now most clubs do run on an investor model but we were at the sharper end of owner investment reliance with the Villa, Leeds, Stoke and a couple of others. The red flags were there with the loan from MSD, selling the stadium back to himself at an overinflated price, and the inability to pay Cocu's full severance package which he 'deferred'.  Rowett's revelations that Mel was scaling back investment to then only go and blow a load on Lampard speaks of serious strategic failures at a high level. This was hardly a well-managed ship- it was a wreck moving from one expensive mistake to another. Now you can lay all that at the feet of Mel or you can suggest maybe the CEO is also in some way to blame. With the amortisation policy, it completely alienated us from the EFL, rightly or wrongly, strategically it was an idiotic thing to do even if it got us out of the mire temporarily. The blowback was horrific. 

I think it's difficult to argue the club wasn't financially and strategically mismanaged. It led us to go within a week of non-existence, indebted and unable to even pay transfer fees on players we'd already signed. We were left in a position no other club in the division was in. I tend to think that Pearce as CEO bears some responsibility for that and his unwillingness to publically own up to his part in almost killing a 140-year-old institution doesn't reflect well on him. It in my view speaks a little to his character and potentially lack of it. It leaves a cloud hanging over the club with him here continuing. 

That's just my opinion though and I respect that plenty of others with more knowledge than me of the situation will disagree. 

Once again though, I'd re-iterate to go around accusing a business of being crooked without any evidence, is a very unprofessional thing for someone who is very highly regarded in their field to do. The fact that Independent experts who have had access to all of the information have basically shown that claim to be false should really tell you everything you need to know, and if you're incorrectly continuing to use that label against Stephen Pearce then it is obviously going to unfairly sway your opinion on him. Just my take on matters.

Even taking the MSD loan of £20m into account, it is highly plausible that this was covering costs all incurred post Covid, once again making Pearce's comment made in May 2020 truthful at the time it was told.

At what point MM stopped funding the club will never be known (In the last accounts signed off, MM had given written assurances that he would continue to support the clubs financing requirements up to June 2020 at the earliest.) but my guess would be post Covid) What Pearce could do about that I am not sure?

9 minutes ago, roboto said:

I'm not sure, because there's not been much commentary about his appearances so far. However, he could provide more of an impact here than Collins, TJJ, Waghorn and Washington currently can.

If he was getting more game time down there, then I'd expect us to allow him to continue with that, but getting the odd 10-15 minute cameos is something he could get here and be more useful to us short term.

Personally I think Barkhuizen or Sibley would be much more reliable players to have as impact subs.

5 or 10 minutes here or there for Brown might give him something to prove though I suppose.

10 minutes ago, roboto said:

He’ll be so far down the list of our two fit and available strikers at the club…

I think it would be better for him to be with our team, perhaps learn a bit from Dwight Gayle in training and be an impact sub when needed for us.

Is he having an impact when coming on as sub for Gateshead do you know?

38 minutes ago, europia said:

Totally agree. There's no way that SP wasn't complicit. To suggest otherwise is rather fanciful. 

Complicit in?

1 hour ago, Leeds Ram said:

On the second point, I guess it's like anything in fields people have different views. From memory, my brother-in-law believed it was essentially a ploy to overinflate assets to skirt what were rules put in place to ensure fairness of competition. He felt, from what I remember, that it also indicated deeper issues with the core business model. I would emphasise I know nothing about this area at all but I do know we were at odds with how other clubs did their accounts at the time. 

On the 3rd point honestly, an apology and a recognition of his role in the disaster would go a long way with me. He was a core part of the flawed unsustainable business structure which left us in 10's of millions of debt and ultimately saw us as a bankrupt and isolated business. By not openly recognising his role in that debacle and it's ludicrous to suggest as CEO he had no role in it, it just makes me think what planet is this guy on. It makes me think he's arrogant and a bit ridiculous. I recognise people make mistakes, even serial mistakes, but a failure to acknowledge to recognise those mistakes is a serious issue for me. 

I think having different views is quite a leap from calling something crooked, when it isn't. 

Unless your brother in law was privvy to the valuations assigned to players and had his own reliable method for proving they were over inflated I really struggle to see how he could come to the conclusion it was crooked and I'd say his opinion was anything other than professional and is more akin to the Kieran Maguire type comments made with no justification. 

I'm afraid I just can't agree with you on the last point. We were left bankrupt because our owner refused to continue to financially support us.

With regards to what I said earlier regarding the timescale of us getting in the mess,.with a wage bill of over £40m it would literally only have taken 9 or 10 months to rack up a PAYE debt of £25m. Hence how we went from being in a good position pre Covid to tens of millions in debt when we entered administration in September 2021 (from memory).

1 hour ago, Herdwick Ram said:

I'm also a qualified accountant, and I too find it baffling why anyone would describe the amortisation policy as "crooked" ?

Anyone with a rudimentary understanding of reporting standards ( ie, FRS102 & IFRS15 etc ) would know that the policy would be subject to independent audit, and would have been picked up if that was the case. And remember, the IDC found no fault with the policy itself as the initial charge was dismissed, the issue on appeal was disclosure and not the policy per se.

And in fact, the audit files were also subject to an additional review by the ICAEW too - which is about as thorough as you can get.

Maybe SP simply can't disclose private matters because he's an employee of the company and as such has a professional + moral + legal obligation not too, or maybe his simply doesn't want to talk about it ..... and maybe we ought to give him the benefit of the doubt as DC clearly has ( and by effectively saving the club he should have earned our trust as fans ).

 

The only thing I'd say about the amortisation policy is that the fair value of players is very subjective but, for me, the principle of lower amortisation in the early years of a contract seemed fairly logical and more realistic than straight line amortisation. 

The only argument I could see against it in our situation is that we overpaid for older players with very little residual value, even taking that into account the end result would always have been the same.

20 minutes ago, Leeds Ram said:

To the first question I'd just put this up as an example as to what I'm talking about. 

 on the amortisation policy, my brother-in-law who worked as a senior accountant at a major firm described it to me as crooked and dangerous as a policy. He spotted it as a red flag immediately when he read reports of it tbh. Now I tend to trust his judgement in these matters as he's highly regarded in his field. 

On the third point I'd like him to show some f****** contrition. He's somehow been kept on a six figure salary after playing a significant role in almost killing the club. I don't think I've ever heard him even apologise for his role in this. When he's asked about his role in the media I don't think it's good enough for him to say he'd rather not talk about it. Given what the club and the fans went through it strikes me as exceedingly arrogant that he believes he can simply pretend it never happened. 
 

Fair comment on the first point, I genuinely don't remember the last time I had really even heard him in public. 

I think even at the point in question we were not in much financial trouble which I could probably demonstrate if I went through the accounts.

As an accountant and auditor for 25 years myself, I also see myself very well qualified to comment on the amortisation matter and I'm completely baffled why anyone in the field would describe the policy as crooked, and the experts on the Independent Disciplinary Commission certainly didn't seem to take that view either.

Regarding the 3rd point, fair enough if you think an apology would go anywhere towards putting things right. I imagine if he did apologise you wouldn't accept it anyway given how you seem to view matters. Also perhaps he doesn't think he has anything to apologise for, after all it wasn't him that pulled the plug and stopped funding his business.

1 hour ago, Leeds Ram said:

I'm not a lawyer but I find it hard to believe that Morris still has an NDA so wide-ranging around Pearce that he can't shed any light at all on how he felt while performing that job. I would think it would be very hard, if not impossible, to make an argument that Pearce's feelings on job performance and environment are part of confidential company information. As far as I am aware NDA's that are too broad or pertain to information which could not be considered confidential can be broken and have been. There is also a question that if he did sign an unbreakable NDA then there would also surely be questions as to the viability of his use in his position in the post-Morris era as presumably Pearce also couldn't discuss these issues with Clowes either. I find it odd that everyone just seems to have accepted this explanation with seemingly little to no probing at all, including local journalists. 

I think the sooner leaves the club the better. He helped drive the club off the cliff edge and repeatedly went on media shows telling us all everything was hunky dory when it wasn't. His discussion on radio derby where he says 'he'd rather not discuss the mel era' just shows his problems. I find it staggering that someone that high up in the club could comfortably state that given the trauma that the club and the fanbase went through. A trauma which he helped create and would have failed to mop up without a last minute local businessman saving his backside. 

Either the bloke was incompetent or he lied. Those are the two choices he's left with tbh. Our amortisation policy which he helped deploy was a recipe for disaster aside from the moral questionability of such a practice. Clowes kept him on for god knows what reason- perhaps he's a nice guy who believes the best in everyone or maybe he saw a giant organisation in an absolute state and needed someone to steer the ship for a year or two while he got more acquainted with it. However, the day Pearce leaves, either mutually or not, will be a day I'll be celebrating. 

Just a few counter arguments here:-

When was the last time, pre administration, that he told everyone things were hunky dory? The last time I remember it was the Nunsfield House forum, at which point the ground sale had gone through and the amortisation policy agreed with The EFL. Even then from memory he said we were sailing close to the wind and were possibly be within hundred thousand of the limit. Seem to remember him saying it was why a good cup run would help. Happy to be corrected if I've got anything wrong here.

The amortisation policy that you seem to state he made up is actually quite very standard policy. Not standard in the football world but certainly very common in the business world. It was actually a clever idea which helped reflect reality much more than the current system did. Of course if there was anything wrong with it, the EFL had plenty of opportunity to point this out.

Not really sure what you want him to say about the MM era? Personally I'm happy to leave it in the past and also happy to trust Clowes' judgement if he thinks keeping him on is to the benefit of the club. Clowes is a Derby fan through and through and I'm sure if he thought Pearce was responsible for nearly destroying the club he loves, he would be long gone.

8 hours ago, cannable said:

What’s that?

Personally, think since the MM days, our recruitment has been OK, especially given the market we gave been shopping in.

7 minutes ago, MarsdenRam said:

Simple - don't cheat.

It's not really anything to do with cheating though is it? Its about creating a closed shop for the 'big' teams. 

10 hours ago, ramit said:

I must be getting soft, I don't wish what we went through on any football fans, not even Forest or dare I say Leeds

Couldn't agree more, anyone who condones league positions being decided in boardrooms rather than on football pitches is encouraging the footballing bodies to carry on ruining the game.

15 minutes ago, plymouthram said:

Dean Sturridge was sent to Torquay for his attitude/behaviour with the Rams staff and players. He played 10 times and scored 5 times, he was then swiftly called back. He had already played for the Rams making his debut in 1992 going to Torquay in 1994. Beckham only made 5 apps for Preston scoring 2 in 1994. Becks had signed for United in 1991 and made his 1st team apps in 1992. So both were already recognised quality players, the reasons behind a club doing that I don't have the answer. Perhaps they wanted to toughen them up in a less quality environment.

Wouldn't say Sturridge was a recognised quality player.

19 minutes ago, VulcanRam said:

I think that's great. They're now stuck with a player they have to pay full wages for, won't play, can't move on, and all totally unnecessarily.

It just heaps more financial stress on Chansiri, which is exactly what he deserves. 

The same guy that was telling their fans how great an owner he was and moaning that he had to keep putting money in every month. 

3 minutes ago, jimtastic56 said:

Just five miles down the road , with a tiny 17k ground , Brentford are now valued at £400 million . The owner is thinking of selling up. How on earth did they do so well after spending so long in the lower leagues?

Good recruitment.