Tribunal Update

[Spanish]

4 minutes ago, angieram said:

I think the stuff about the EFL actively encouraging them to do this at the time is really morally unacceptable. They seem to conveniently be laying the blame for this at Shaun Harvey's door, who no longer works for them (but who left them not with any cloud over his performance but rather with a golden handshake.) Wednesday accepted his guidance at face value.

However, what the Independent Commission is saying is that they still broke the P & S rules so are guilty.

This therefore could also apply in our case, that we accepted EFL advice that led us to do something that broke the rules. That is scary.

Our defence then, must solely rest on whether we complied with the regulations which were in place around our two charges. If we argued that the EFL sanctioned us to do it (as they apparently did Wednesday) then that argument won't hold water.

At what point in all this is any action going to be taken against the EFL about their fitness for purpose in both cases? 

 

maybe it is the amortisation that will have to be restated

[MACKWORTHRAM]

3 minutes ago, angieram said:

I think the stuff about the EFL actively encouraging them to do this at the time is really morally unacceptable. They seem to conveniently be laying the blame for this at Shaun Harvey's door, who no longer works for them (but who left them not with any cloud over his performance but rather with a golden handshake.) Wednesday accepted his guidance at face value.

However, what the Independent Commission is saying is that they still broke the P & S rules so are guilty.

This therefore could also apply in our case, that we accepted EFL advice that led us to do something that broke the rules. That is scary.

Our defence then, must solely rest on whether we complied with the regulations which were in place around our two charges. If we argued that the EFL sanctioned us to do it (as they apparently did Wednesday) then that argument won't hold water.

At what point in all this is any action going to be taken against the EFL about their fitness for purpose in both cases? 

 

I might be wrong here and I am not sure if it makes any difference but at no point in anything I've read about the Sheffield Wednesday case does it mention that they had approval in writing. 

I know our statement indicates that we do. 

Surely that has to make a difference?

[DCFC1388]

11 minutes ago, Animal is a Ram said:

Derby reported losses of £7.9m in 2016-17, and £14.7m in 2015-16. - Derby Telegraph.

So, with a cap of £39m, leaves about £16m spare for 2017-18.

The stadium was sold with a valuation of £80m resulting in a pre-tax profit of £14.6m. 

EFL are arguing that as the stadium was listed as a £40m asset in previous accounts, the value was substantially inflated - so using this figure would blow a hole in the finances, and 17-18 would be a loss of £26.4m, £8m over the allowed figure.

Taking the club statement as gospel, however, the sale had written agreement with the EFL after being professionally valued, and adjusted at the EFL's request - same story with the amortisation method. 

So, the EFL fluffed it, and now want to row back on all of it. I still don't particularly understand how this is possible. If I was told explicitly I could sell my house for £200k, after having it professionally valued - the estate agent couldn't turn round 6 months later and say sorry, rules have changed, can't do that now, it's only worth £150k...

Thanks for this, looking at the report from the independant panel the sale of pride park and the valuation arent a problem therefore meaning we will have passed P&S?

[Animal is a Ram]

9 minutes ago, angieram said:

I think the stuff about the EFL actively encouraging them to do this at the time is really morally unacceptable. They seem to conveniently be laying the blame for this at Shaun Harvey's door, who no longer works for them (but who left them not with any cloud over his performance but rather with a golden handshake.) Wednesday accepted his guidance at face value.

However, what the Independent Commission is saying is that they still broke the P & S rules so are guilty.

This therefore could also apply in our case, that we accepted EFL advice that led us to do something that broke the rules. That is scary.

Our defence then, must solely rest on whether we complied with the regulations which were in place around our two charges. If we argued that the EFL sanctioned us to do it (as they apparently did Wednesday) then that argument won't hold water.

At what point in all this is any action going to be taken against the EFL about their fitness for purpose in both cases? 

 

I think though, this more relates to the timing - i.e. completion of the sale being outside the accounting period, but then backdated, on the EFLs 'advice'.

If this then translates to the value of PPS, then that is questioning the integrity of the independent, professional valuers. Which I can't imagine they would take too kindly to.

2 minutes ago, DCFC1388 said:

Thanks for this, looking at the report from the independant panel the sale of pride park and the valuation arent a problem therefore meaning we will have passed P&S?

Quote

The Stadium was valued by professional valuers immediately prior to the transaction. The transaction and valuation were discussed extensively with the EFL Executive, which asked for a relatively modest price adjustment which was accepted. The valuation report was prepared by a highly reputable and professional and independent firm, with industry experience, who had valued the stadium on two prior occasions, one in 2007, and one in 2013.

Again - if they really are challenging the value of PPS, then not only does it make the EFL look like idiots, they're also opening themselves up to a case of damaging the valuer's reputation...

[Spanish]

1 minute ago, Animal is a Ram said:

I think though, this more relates to the timing - i.e. completion of the sale being outside the accounting period, but then backdated, on the EFLs 'advice'.

If this then translates to the value of PPS, then that is questioning the integrity of the independent, professional valuers. Which I can't imagine they would take too kindly to.

 

4 minutes ago, Spanish said:

no it was a bout the timing which they believe was an honest mistake by the club so has to be restated.  so on the basis that our sale and leaseback is acceptable and the valuation is strong then I'm still unsure what we have done wrong.  SWFC did the same transaction just they messed up the paperwork.

this looks mre like the amortisation than the other matters

[Spanish]

3 minutes ago, DCFC1388 said:

Thanks for this, looking at the report from the independant panel the sale of pride park and the valuation arent a problem therefore meaning we will have passed P&S?

the SWFC findings make no mention about the valuation or even whether the sale and leaseback is allowed so therefore it can't be that?

[Ramslad1992]

People seem to be forgetting one key component in this whole saga... the EFL make it all up as they go along and don’t really have a clue what they are doing and when they are doing it.

i always imagine an EFL board meeting to look like the mad hatters tea party. 

[duncanjwitham]

17 minutes ago, Animal is a Ram said:

Derby reported losses of £7.9m in 2016-17, and £14.7m in 2015-16. - Derby Telegraph.

So, with a cap of £39m, leaves about £16m spare for 2017-18.

The stadium was sold with a valuation of £80m resulting in a pre-tax profit of £14.6m. 

EFL are arguing that as the stadium was listed as a £40m asset in previous accounts, the value was substantially inflated - so using this figure would blow a hole in the finances, and 17-18 would be a loss of £26.4m, £8m over the allowed figure.

The EFL/tribunal had no problem with Sheffield Wednesday's ~£60m valuation.  So even if they demand we reduced ours to something like that, we're fine.  And don't forget the losses contain items that don't count towards FFP (academy costs for example), so those losses are probably at least £2m+ smaller in FFP terms.

[Animal is a Ram]

8 minutes ago, Spanish said:

 

this looks mre like the amortisation than the other matters

You're probably right - but there seems to be little information out there as to what the EFLs issue is with this, and why now when it appears it's been part of Derby's system for a number of years...

[SFox1993]

24 minutes ago, Ramraiders said:

Hearing that 9 point deduction is on its way in the next week!

Wow what a first post .... Makes me want to believe what you have to say ?

[Spanish]

5 minutes ago, Animal is a Ram said:

You're probably right - but there seems to be little information out there as to what the EFLs issue is with this, and why now when it appears it's been part of Derby's system for a number of years...

If i had the time I would spend it taking  closer look at the wording but in reality we will know soon.  SWFC wrongly dated the transaction but apparently EFL knew a bout it.  Tribunal have disregarded all of this and insisted that the accounts are restated which produces a breach.  That seems fair enough.  EFL should have spotted it and SWFC shouldn't have done it therefore can't rely on EFL's apparent approval or something like that .  Guess the moral of the story is don't trust the EFL

[Animal is a Ram]

1 minute ago, duncanjwitham said:

The EFL/tribunal had no problem with Sheffield Wednesday's ~£60m valuation.  So even if they demand we reduced ours to something like that, we're fine.  And don't forget the losses contain items that don't count towards FFP (academy costs for example), so those losses are probably at least £2m+ smaller in FFP terms.

The EFL does have a problem with the valuation. Despite not having a problem initially, after an initial markdown - which DCFC agreed to.

If they demand another, significant adjustment, then that calls the independent, professional valuer into question.

And those losses are P&S losses, not outright losses.

[Spanish]

2 minutes ago, SFox1993 said:

Wow what a first post .... Makes me want to believe what you have to say ?

probably their last one also

[Spanish]

1 minute ago, Animal is a Ram said:

The EFL does have a problem with the valuation. Despite not having a problem initially, after an initial markdown - which DCFC agreed to.

If they demand another, significant adjustment, then that calls the independent, professional valuer into question.

And those losses are P&S losses, not outright losses.

defamation I would say

[Animal is a Ram]

1 minute ago, Spanish said:

If i had the time I would spend it taking  closer look at the wording but in reality we will know soon.  SWFC wrongly dated the transaction but apparently EFL knew a bout it.  Tribunal have disregarded all of this and insisted that the accounts are related which produces a breach.  That seems fair enough.  EFL should have spotted it and SWFC shouldn't have done it therefore can't rely on EFL's apparent approval or something like that .  Guess the moral of the story is don't trust the EFL

EFL did spot it, but advised a way to get round it, it seems.

As you say tribunal have agreed that it fell outside the period, hence SWFC failed P&S, but also slapped EFL for managing it poorly.

Agreed - don't trust the EFL.

[Ghost of Clough]

I still can't get my head around this bit...

[angieram]

13 minutes ago, Animal is a Ram said:

I think though, this more relates to the timing - i.e. completion of the sale being outside the accounting period, but then backdated, on the EFLs 'advice'.

If this then translates to the value of PPS, then that is questioning the integrity of the independent, professional valuers. Which I can't imagine they would take too kindly to.

Again - if they really are challenging the value of PPS, then not only does it make the EFL look like idiots, they're also opening themselves up to a case of damaging the valuer's reputation...

That's a good point, that if the sole issue over the sale is with the amount of the independent evaluation, then the independent commission will be taking on another body rather than just the club if they want to find us guilty. I accept that the principle of us selling the stadium to ourselves is fine but that was never in dispute. 

On balance then, we should be okay on this charge. 

On the other charge around amortisation I think the rules are less clear and we probably can no longer use the argument that the EFL 'let' us do it as a defence.

Therefore the outcome will depend on whether the independent commission decides this broke the rules or not. How clear are the rules and will our interpretation of them be seen as a breach? I am less confident about this as the rules are so unclear.

However,  as our hearing has already happened,  we haven't had the advantage of hindsight in preparing our defence accordingly. That may also influence the findings.

[Reggie Greenwood]

33 minutes ago, Ramraiders said:

Hearing that 9 point deduction is on its way in the next week!

Trolly dolly

[duncanjwitham]

1 minute ago, Animal is a Ram said:

The EFL does have a problem with the valuation. Despite not having a problem initially, after an initial markdown - which DCFC agreed to.

If they demand another, significant adjustment, then that calls the independent, professional valuer into question.

Yeah, what I'm saying is, if they demand we reduce our £80m valuation to something close to Sheff Weds £60m value, then we're fine in FFP terms.  We've just got less room to manoeuvre this season.  If they demand we reduce it to £40m, then we have a case as to why they were happy with the Sheff Weds value, but unhappy with ours.  I know different stadiums have different values etc, but I don't believe theirs is worth 50% more than ours.

And if they do question the value, I wonder if our valuers would have any kind of legal case? They're basically claiming that a professional valuer deliberately over-stated a valuation to help in what amounts to fraud.  Obviously the EFL can claim they are querying the basis of the valuation was made on, not the value itself, but we were pretty clear that it's been consistently valued using the same methodology (depreciated replacement cost IIRC) every time it's been valued.  So I don't see that argument working.

1 minute ago, Animal is a Ram said:

And those losses are P&S losses, not outright losses.

?

[StarterForTen]

Perhaps it would be better if all football clubs were not allowed to amortise player transfer fees and they are treated as capital purchases that, if paid in full at the time of signing and covered by owner investment, are NOT included in FFP calculations.

That would leave clubs to work within a three year permitted loss cycle that just covers ongoing expenses - which will largely be paying the player wages.

It would allow ambitious owners to match the clubs with parachute payments without overburdening them with more debt than present.

Just a thought.