Tribunal Update

[Steve Buckley’s Dog]

A quick scan of the SWFC boards has revealed that they are accusing us of stealing the ‘Duck the EFL’ chant off them.

 

[Chester40]

Serious question. There is a lot of 'we haven't done anything wrong' stuff on here and quite a few posters who obviously know their way round accounting...

So worst case scenario, for the lay person, if we were found 'guilty' and deducted 12 points... What would we be found guilty of and how would the EFL justify /explain a big punishment?? 

[Ghost of Clough]

2 minutes ago, Chester40 said:

Serious question. There is a lot of 'we haven't done anything wrong' stuff on here and quite a few posters who obviously know their way round accounting...

So worst case scenario, for the lay person, if we were found 'guilty' and deducted 12 points... What would we be found guilty of and how would the EFL justify /explain a big punishment?? 

To be deducted 12 points we would need to be guilty of selling the stadium at an over inflated value AND using an improper amortisation policy. The size of the penalty is based on how much we exceeded the limits by. 

Guilty of the overvaluing the stadium results in a worst case scenario of roughly £9m over the limit (based on no profit on the stadium). This carries a 7 point penalty. 

Guilty of just the amortisation policy means we stay within limits and no penalty. 

Guilty of both would result in us being about £26m over budget and a maximum 12 point penalty (capped at 12 points for exceeding the limit by £14m or more). 

Of course you’d expect the stadium to have gone up in value since it was previously valued, so it’s more likely that we have to be guilty of both to have any sort of punishment. Based on the rumoured £60m valuation by the EFL, that would mean we’re £6m over the limit and have a 5/6 point penalty. 
 

[Based on my rough estimates for our P&S figures]

[Ramzabac]

This Link was posted recently and is worth another read now in the light of SWFC judgement. Great blog thanks. https://www.footballlaw.co.uk/articles/the-owls-and-the-rams
 

[RadioactiveWaste]

3 minutes ago, Ramzabac said:

This Link was posted recently and is worth another read now in the light of SWFC judgement. Great blog thanks. https://www.footballlaw.co.uk/articles/the-owls-and-the-rams
 

But the defense of estopple (reliance) didn't hold for Wednesday, who basically said "you told us we could".

Obviously, we've not seen the documents relating to that, and they may be very different to the ones Wednesday put forward, however, it is not seemingly an invincible defense in itself.

[RandomAccessMemory]

7 minutes ago, Ghost of Clough said:

To be deducted 12 points we would need to be guilty of selling the stadium at an over inflated value AND using an improper amortisation policy. The size of the penalty is based on how much we exceeded the limits by. 

Guilty of the overvaluing the stadium results in a worst case scenario of roughly £9m over the limit (based on no profit on the stadium). This carries a 7 point penalty. 

Guilty of just the amortisation policy means we stay within limits and no penalty. 

Guilty of both would result in us being about £26m over budget and a maximum 12 point penalty (capped at 12 points for exceeding the limit by £14m or more). 

Of course you’d expect the stadium to have gone up in value since it was previously valued, so it’s more likely that we have to be guilty of both to have any sort of punishment. Based on the rumoured £60m valuation by the EFL, that would mean we’re £6m over the limit and have a 5/6 point penalty. 
 

[Based on my rough estimates for our P&S figures]

It's also worth noting that the club used the phrase 'newly notified' about the amortisation policy charge so they weren't aware until they were charged that the EFL believe there to be an issue with it. So the stadium sale wasn't used to cover this.

In fact, it wasn't until June 2018 that Kieran Maguire wrote to the EFL about it, the finance team didn't contact him, and it took until January 2020 for us to be charged. Very expeditious.

https://www.bbc.co.uk/sport/football/51322797

[Ramzabac]

14 minutes ago, RadioactiveWaste said:

But the defense of estopple (reliance) didn't hold for Wednesday, who basically said "you told us we could".

Obviously, we've not seen the documents relating to that, and they may be very different to the ones Wednesday put forward, however, it is not seemingly an invincible defense in itself.

Yes. It does show Though that whilst the EFL May have agreed the valuation they got caught out by submitting the sale in the wrong financial year. Date of sale does not match the accounting period.
 

[RandomAccessMemory]

22 minutes ago, RadioactiveWaste said:

But the defense of estopple (reliance) didn't hold for Wednesday, who basically said "you told us we could".

Obviously, we've not seen the documents relating to that, and they may be very different to the ones Wednesday put forward, however, it is not seemingly an invincible defense in itself.

I reckon it very much depends on exactly what they were told they could do and when they were told they could do it.

In June 2018 - 'Yes, you can sell your stadium for £60m and include the profits in your accounts' could be argued to be the same as 'Yes, you can sell your stadium for £60m and include the profits in your 2017/18 accounts' as the financial year hasn't yet ended.

In June 2019 - 'Yes, you can sell your stadium for £60m and include the profits in your accounts' could be argued to be very different to 'Yes, you can sell your stadium for £60m and include the profits in your 2017/18 accounts' as the accounts for 2017/18 should already have been finalised and it can be argued by the EFL that the permission was for 2018/19.

To add, but as I said yesterday, that doesn't explain how they can break FFP/P&S for the period by "eight figures" and not be charged as having failed at the same time as Birmingham, whose punishment was dished out in March 2019.

[Tyler Durden]

Regardless of the outcome of the hearing all of this discussion detracts from the root cause of this which is the financial mismanagement at the club which unfortunately resides at Mel Morris' door, we were seeking innovative and imaginative ways to circumnavigate the FFP rules to avoid a points deduction.

Which doesn't seem a caste irony certainty after all of the financial chicanery.

[Wolfie20]

I hope to God it wasn't Stephen Pearce who signed everything off on behalf of the EFL. Yikes!!!!  ?

[oldtimeram]

11 minutes ago, Tyler Durden said:

Regardless of the outcome of the hearing all of this discussion detracts from the root cause of this which is the financial mismanagement at the club which unfortunately resides at Mel Morris' door, we were seeking innovative and imaginative ways to circumnavigate the FFP rules to avoid a points deduction.

Which doesn't seem a caste irony certainty after all of the financial chicanery.

I agree, it seems as if Morris has a few questions to answer on this matter

[RandomAccessMemory]

1 minute ago, Wolfie20 said:

I hope to God it wasn't Stephen Pearce who signed everything off on behalf of the EFL. Yikes!!!!  ?

It wasn't. He was appointed onto the EFL board in June 2019.

In fact, doesn't it seem strange, given so many clubs are apparently up in arms about our stadium sale, that he was voted by these other clubs onto the board after this came to light?

[Day]

4 minutes ago, oldtimeram said:

I agree, it seems as if Morris has a few questions to answer on this matter

What questions would they be?

[EraniosSocks]

15 minutes ago, David said:

What questions would they be?

What’s your favourite tea

[NottsRam77]

13 hours ago, Ghost of Clough said:

Wednesday also had “dialogue” with the EFL over their stadium sale. 

But not the period in which they accounted for it in ? 
 

is that not what they’ve been found guilty of ?

im only asking .. genuinely 

[Tyler Durden]

20 minutes ago, David said:

What questions would they be?

It's the classic root cause as you would use in an accident investigation followed by the 5 Whys afterwards 

Don't sell the stadium then everything else that follows is eliminated.

Apply the 5 Whys to the stadium sale, why did Mel Morris' think it was imperative to sell off our largest asset? 

Then this will answer the question.

[RandomAccessMemory]

5 minutes ago, NottsRam77 said:

But not the period in which they accounted for it in ? 
 

is that not what they’ve been found guilty of ?

im only asking .. genuinely 

None of us can know exactly what that dialogue entailed, but this was their statement in reply to the charges

Quote

Sheffield Wednesday Football Club has today filed its response to the charges brought against it by the English Football League for alleged misconduct concerning the sale and leaseback of Hillsborough stadium and the inclusion of the profit on that sale in the Club’s 2017/18 accounts. The Club has informed the EFL that the charges are themselves unlawful and, without prejudice to that fact, are all denied by the Club and the other Respondents.

The Club has reserved all of its rights against the EFL and will take all such actions as are necessary to protect its rights and integrity, and those of its current and former officers, including in relation to inaccurate reporting. The Club has also notified the EFL that it stands ready to bring a claim against the EFL to obtain compensation for its conduct.

The Club maintains that it consulted with the relevant executive officers of the EFL in connection with the stadium transaction and that it acted in good faith. The Club has in its possession numerous emails, letters and other documents in which the EFL gave authorisation to the transaction, and on which authorisation the Club understood it could rely. That authorisation gave rise in law to a legitimate expectation that the transaction would be accepted by the EFL, which is binding on the EFL. The EFL is acting in breach of that binding legitimate expectation by retrospectively treating as misconduct that which it had itself previously authorised, and this makes the charges themselves unlawful. The Club is accordingly bringing its own claim against the EFL to establish that it is acting unlawfully, as well as standing ready, if necessary, to vigorously defend the charges.

The Club will make no further comment at this time.

It doesn't actually make any direct reference as to whether they were specifically told they could put the profits into their 2017/18 accounts. It's certainly not as detailed a statement as ours.

[Day]

2 minutes ago, Tyler Durden said:

It's the classic root cause as you would use in an accident investigation followed by the 5 Whys afterwards 

Don't sell the stadium then everything else that follows is eliminated.

Apply the 5 Whys to the stadium sale, why did Mel Morris' think it was imperative to sell off our largest asset? 

Then this will answer the question.

You know why we sold our largest asset to a company under his control so it’s kind of a pointless question.

This investigation, if we are completely dismissed without charge will he still have questions to answer? My guess is the answer will be yes for some still.

Imagine pumping millions from your own personal wealth into a football club to give back to the local community, to be then criticised on how the money was spent and told you must answer questions.

Do you not think the person that will be hurting the most is Mel himself? He will be fully aware that a large amount of that money has been poorly spent as the people he placed his faith in made poor decisions.

This is not a one man band, and whilst he’s the man at the top it’s all to easy to say it’s all your fault. 

He hasn’t spent my money, or your money, this is his money and it was used to try and take this football club back to the Premier League. That was and I hope still is his ambition. 

Yes his commitment to this has seen us sell our stadium to fall inline with the rules set by the incompetent shambles of an organisation that is the EFL.

Why?

We’ve tried to take on the clubs coming down from the Premier League, bumper TV money in their back pocket whilst handed another large cheque to say at least you tried. 

And you know what? We’ve been pretty close in achieving that, so so close despite all the criticism.

If he walks away from this club without seeing us go up I will be genuinely gutted for the bloke and I think those that are looking to question him will look back on his tenure with more fonder memories in the future.

[Tyler Durden]

Just now, David said:

You know why we sold our largest asset to a company under his control so it’s kind of a pointless question.

This investigation, if we are completely dismissed without charge will he still have questions to answer? My guess is the answer will be yes for some still.

I genuinely didn't think you were asking a rhetorical question so my reply was based around my misunderstanding.

Notwithstanding this I agree with the section of your post which I've quoted in my reply 

[Day]

Just now, Tyler Durden said:

I genuinely didn't think you were asking a rhetorical question so my reply was based around my misunderstanding.

Notwithstanding this I agree with the section of your post which I've quoted in my reply 

It wasn’t rhetorical, I was interested to know what questions he should be asked. 
I think you can criticise poor decisions that have been made, if done fairly and not laying all blame on one mans doorstep, but don’t think he deserves to be questioned at all.