EFL charge Derby over ffp

[rammieib]

10 hours ago, Herdwick Ram said:

I'm sorry, but you are incorrect - the stadium was last valued in 2007 at £55m ( and the EFL have accepted that figure for the last 11 years ! ).

This is a matter of fact, and is in the public domain.

That's a simple increase of approx 45% over 11 years - which doesn't seem too far fetched ?

 

The last accounts don’t have it at that.... take a look at Companies House.

Back in 2007 it was though. 

[Footymum2017]

1 hour ago, Ramslaar said:

Well i understand thats your understanding but you may not have understood what was going on behind the scenes.he was the sole reason we got it as he was the one that signed off what needed to be done and paid for it and sometime before he took sole ownership

I assume that you work at the academy to have all the inside info? I don’t remember any improvements that were made leading up to them getting Cat 1 status, but if you know for a fact that there were then I will admit i’m wrong.

[RadioactiveWaste]

1 hour ago, Footymum2017 said:

I assume that you work at the academy to have all the inside info? I don’t remember any improvements that were made leading up to them getting Cat 1 status, but if you know for a fact that there were then I will admit i’m wrong.

I remember there being a planning row about an additional pitch (why we play some youth games at St George park?)

[G STAR RAM]

8 hours ago, rammieib said:

The last accounts don’t have it at that.... take a look at Companies House.

Back in 2007 it was though. 

What is your understanding?

[G STAR RAM]

9 hours ago, reverendo de duivel said:

When I was part of the group who went to Moor Farm, it was days after Clement took over.

I'd guess the breakfast club was at the beginning of the season after?

Breakfast club was just after Clements sacking. Was on the day of Wassalls first game in charge.

[Brammie Steve]

Put this alongside the fiasco of HS2 where financial gurus came up with a cost estimate stating that the average cost of compulsory purchases included properties worth between £1 to £5. They sacked the genuine expert who pointed out these 'anomalies'.

The world of high finance seems peppered with groundless guesstimates, monopoly and confetti money. IMVHO the costings seem to be accepted as accurate subject to the proviso that they are no more than one third of the actual price.

I cannot accept that the railway workers, bricklayers, taxpayers, footballers or Club supporters should be made to suffer by a third party.

Excuse the rambling We love the EFL really and know that they never put a foot wrong....

 

[Rams-in-Spain]

19 hours ago, Herdwick Ram said:

I'm sorry, but you are incorrect - the stadium was last valued in 2007 at £55m ( and the EFL have accepted that figure for the last 11 years ! ).

This is a matter of fact, and is in the public domain.

That's a simple increase of approx 45% over 11 years - which doesn't seem too far fetched ?

 

I based the original value on this article https://www.theguardian.com/football/2020/jan/16/Derby-charged-breaching-financial-fair-play-rules-efl-football-league

Is this incorrect? 

But like I've already said the value of Pride Park seems very inflated when compared to Villa Park and Hillsborough which are valued at over 20 million less. 

Last year Birmingham had their points (9) deducted I think in March? I'm sure I've read that they are in trouble again because they have not stuck to the spending reductions they specified to the EFL? It seems clear to me that Derby now have adopted a new strategy which I hope will help with their case, bringing youth into the squad rather that splashing the cash. Let's hope it all gets sorted ASAP with any points deducted this season so we can push on next season. 

Let's simply all support the squad we have!

[G STAR RAM]

20 hours ago, Herdwick Ram said:

I'm sorry, but you are incorrect - the stadium was last valued in 2007 at £55m ( and the EFL have accepted that figure for the last 11 years ! ).

This is a matter of fact, and is in the public domain.

That's a simple increase of approx 45% over 11 years - which doesn't seem too far fetched ?

 

I'm afraid that it is you that is incorrect. 

The stadium was originally revalued up to £55m in 2007.

A further professional valuation was carried out on 23 May 2013, which confirmed that the value used in the accounts was true and fair.

So the 20% increase was over a period of 5 years rather than the 11 that you have suggested.

[RadioactiveWaste]

45 minutes ago, Rams-in-Spain said:

I based the original value on this article https://www.theguardian.com/football/2020/jan/16/Derby-charged-breaching-financial-fair-play-rules-efl-football-league

Is this incorrect? 

But like I've already said the value of Pride Park seems very inflated when compared to Villa Park and Hillsborough which are valued at over 20 million less. 

Last year Birmingham had their points (9) deducted I think in March? I'm sure I've read that they are in trouble again because they have not stuck to the spending reductions they specified to the EFL? It seems clear to me that Derby now have adopted a new strategy which I hope will help with their case, bringing youth into the squad rather that splashing the cash. Let's hope it all gets sorted ASAP with any points deducted this season so we can push on next season. 

Let's simply all support the squad we have!

I'm thinking the contested "cleverness" in our valuation was the value if the stadium was upgraded to host events during the season, which would Hypothetically add a fair bit of value.

[rynny]

10 hours ago, bigbadbob said:

Can you remember when the breakfast club was?

 

10 hours ago, reverendo de duivel said:

When I was part of the group who went to Moor Farm, it was days after Clement took over.

I'd guess the breakfast club was at the beginning of the season after?

I believe it was the morning of the MK Don's match just after Clement was sacked, Wassall's first game in charge. 

[Ghost of Clough]

1 hour ago, Rams-in-Spain said:

I based the original value on this article https://www.theguardian.com/football/2020/jan/16/Derby-charged-breaching-financial-fair-play-rules-efl-football-league

Is this incorrect? 

But like I've already said the value of Pride Park seems very inflated when compared to Villa Park and Hillsborough which are valued at over 20 million less. 

Last year Birmingham had their points (9) deducted I think in March? I'm sure I've read that they are in trouble again because they have not stuck to the spending reductions they specified to the EFL? It seems clear to me that Derby now have adopted a new strategy which I hope will help with their case, bringing youth into the squad rather that splashing the cash. Let's hope it all gets sorted ASAP with any points deducted this season so we can push on next season. 

Let's simply all support the squad we have!

The below appears on the accounts from 2008 through to 2012 with regard to tangible assets:

Freehold buildings with historical cost of £20,852, 867 known as Pride Park Stadium were valued by independent Valuers Jones Lang LaSalle on 11 December 2007. The valuation was prepared on a depreciated replacement cost basis and was made in accordance with the Royal Institution of Chartered Surveyors Asset Statements of Valuation Practice and Guidance Notes. Based on this valuation the stadium has be revalued to £55,000,000.

The following notes were added to the end of the above in the relevant accounting period:

30 June 2009 - The current net book value of the stadium is £52,867,808 and the depreciated historical cost £14,802,160.
30 June 2010 - The current net book value of the stadium is £51,492,808 and the depreciated historical cost £14,420,925.
30 June 2011 - The current net book value of the stadium is £50,117,808 and the depreciated historical cost £14,039,690.
30 June 2012 - The current net book value of the stadium is £48,742,808 and the depreciated historical cost £13,658,455.

The below appears on the accounts from 2013 through to 2017 with regard to tangible assets:

Freehold buildings with historical cost of £20,852, 867 known as Pride Park Stadium were valued by independent Valuers Jones Lang LaSalle on 23 May 2013. The valuation was prepared on a depreciated replacement cost basis and was made in accordance with the Royal Institution of Chartered Surveyors Asset Statements of Valuation Practice and Guidance Notes.

The above note for accounts 2013 onward is very similar to that with the previous valuation (2008-2012), except for the addition of the following:
"Based on this valuation the Directors have assessed the carrying value of the freehold buildings and determined the current value is appropriate".

I take this as meaning the rate of depreciation continues at the same rate (£1,375,000 per year). So, the value on 30 June 2017 would have been £41,867,808, and the value on 30 June 2018 would have been £40,492,808. This ties in with the c£41m sale price. I don't see this as revaluing the stadium to c£40m as many have suggested, simply the club were happy to continue the depreciation as it was.

In my very limited knowledge of finance, I don't believe depreciated value represents fair value. If it was, the stadium would only be worth c£10m in 2040 and only £600k in 2047. Much older stadiums such as Villa Park and Hillsborough show this isn't the case.

I mentioned value based on inflation last week. £55m in 2007 is £78m today (about £72m in 2018). c£80m sale cost is fairly reasonable based on this very simple assumption.

 

[I await someone with more financial know-how to rip this post apart]

[Mostyn6]

46 minutes ago, rynny said:

 

I believe it was the morning of the MK Don's match just after Clement was sacked, Wassall's first game in charge. 

pretty sure it was Valentines Day. I was gutted I didn't get a kiss of Mel.

[ariotofmyown]

4 minutes ago, Mostyn6 said:

pretty sure it was Valentines Day. I was gutted I didn't get a kiss of Mel.

He's never been one for foreplay though.

[rammieib]

3 hours ago, G STAR RAM said:

What is your understanding?

£41,777,369 came off the asset books in that financial year.

£45,509,811 was income under 'exceptional items'

So £86 Million there - although under the income I don't have the exact breakdown of this but its fair to say, the majority is the stadium sale.

[rammieib]

Land and Buildings as a fixed asset on the books:

2017 - £52,889,481

2018 - £8,723,699

£44m difference there - of course there could have been other things sold that we don't know about but again, the numbers do add up.

[dcfcreece1601]

Are we likely to win this battle without punishment? All these figures have me lost as to if we are in the right or not??

[duncanjwitham]

47 minutes ago, Ghost of Clough said:

The valuation was prepared on a depreciated replacement cost basis and was made in accordance with the Royal Institution of Chartered Surveyors Asset Statements of Valuation Practice and Guidance Notes. Based on this valuation the stadium has be revalued to £55,000,000.

I think that bolded bit is the key bit, based on my very, very limited knowledge, and what I can google etc (so massive pinch of salt with this etc etc).  The value of the stadium isn't what it's 'worth' (in the sense of what my house is worth).  It's what it would cost us to get an equivalent, modern stadium built to carry on the normal functioning of our business (i.e. playing football matches).  If the cost of building new stadiums has gone up since the stadium was last valued, then the value of Pride Park has gone up too.  And certainly the costs being banded about for other stadiums suggest £80m isn't crazy.

[G STAR RAM]

55 minutes ago, Ghost of Clough said:

The below appears on the accounts from 2008 through to 2012 with regard to tangible assets:

Freehold buildings with historical cost of £20,852, 867 known as Pride Park Stadium were valued by independent Valuers Jones Lang LaSalle on 11 December 2007. The valuation was prepared on a depreciated replacement cost basis and was made in accordance with the Royal Institution of Chartered Surveyors Asset Statements of Valuation Practice and Guidance Notes. Based on this valuation the stadium has be revalued to £55,000,000.

The following notes were added to the end of the above in the relevant accounting period:

30 June 2009 - The current net book value of the stadium is £52,867,808 and the depreciated historical cost £14,802,160.
30 June 2010 - The current net book value of the stadium is £51,492,808 and the depreciated historical cost £14,420,925.
30 June 2011 - The current net book value of the stadium is £50,117,808 and the depreciated historical cost £14,039,690.
30 June 2012 - The current net book value of the stadium is £48,742,808 and the depreciated historical cost £13,658,455.

The below appears on the accounts from 2013 through to 2017 with regard to tangible assets:

Freehold buildings with historical cost of £20,852, 867 known as Pride Park Stadium were valued by independent Valuers Jones Lang LaSalle on 23 May 2013. The valuation was prepared on a depreciated replacement cost basis and was made in accordance with the Royal Institution of Chartered Surveyors Asset Statements of Valuation Practice and Guidance Notes.

The above note for accounts 2013 onward is very similar to that with the previous valuation (2008-2012), except for the addition of the following:
"Based on this valuation the Directors have assessed the carrying value of the freehold buildings and determined the current value is appropriate".

I take this as meaning the rate of depreciation continues at the same rate (£1,375,000 per year). So, the value on 30 June 2017 would have been £41,867,808, and the value on 30 June 2018 would have been £40,492,808. This ties in with the c£41m sale price. I don't see this as revaluing the stadium to c£40m as many have suggested, simply the club were happy to continue the depreciation as it was.

In my very limited knowledge of finance, I don't believe depreciated value represents fair value. If it was, the stadium would only be worth c£10m in 2040 and only £600k in 2047. Much older stadiums such as Villa Park and Hillsborough show this isn't the case.

I mentioned value based on inflation last week. £55m in 2007 is £78m today (about £72m in 2018). c£80m sale cost is fairly reasonable based on this very simple assumption.

 

[I await someone with more financial know-how to rip this post apart]

I think that's a good attempt at explaining. 

Its hard to see how the ground could have lost £11m in value between 2007 and 2018 given all of the improvements made.

 

[rammieib]

First time I've seen the name of the company who did the independent valuing - Jones Lang LaSalle, Listed on the NYSE - Huge company.

That gives me additional confidence that everything was water tight on this. I'm sure the Valuation report is under an NDA - so it won't become public knowledge but I'm OK with that now I can see who has done it.

Anyway - when is the hearing? Is it today/tomorrow?

[Ghost of Clough]

1 minute ago, dcfcreece1601 said:

Are we likely to win this battle without punishment? All these figures have me lost as to if we are in the right or not??

Stadium
Independent valuation, valued by professional valuers used by us twice in the past. Discussed the transaction before, during and after it took place with the EFL Executive and adjustments made in line with their feedback. Transaction for P&S purposes was approved in writing.
Some owners/chairman feel the sale price was too high. A different valuer to the one we used also believes that the stadium was worth less than Mel paid.

Amortisation
A commonly used accounting policy (in other industries), reported transparently to the EFL Executive, with written approval. We've been using this policy since the 15/16(?) season, with no previous issues.
Not used by any other club in English football. Doubts over whether it is an appropriate accounting policy for amortising footballers.

 

In summary, I can't see us being punished. But I believe the rules will be tightened, making us use the standard amortisation method in football going forward. Maybe given an allowance to realign ourselves (could be financial or time). Maybe a suspended punishment.