Tribunal Update

[MackworthRamIsGod]

38 minutes ago, Ghost of Clough said:

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

Its the bit that infuriates me too, it proves they are trying to make examples of clubs, at the expense of thousands of fans, so in the case of Derby County, this is more a case of Rick Parry vs Mel Morris and all the fans and players can go to hell.

Why, as a paying fan, should be continue to fund such an industry?

 

[gccrowdpleaser]

I think, based on the Weds info, that we could have been found guilty in some part and that arguments now are down to when the penalty should be applied. 

Us wanting it applied to last season like Wigan and the EFL wanting it to be to next.

There is potentially an advantage in being found guilty. That being...i believe that if you are then your rolling 3 year period for FFP gets reset to zero. And so effectively we start with a clean slate and perhaps better run finances.

[Spanish]

1 minute ago, gccrowdpleaser said:

I think, based on the Weds info, that we could have been found guilty in some part and that arguments now are down to when the penalty should be applied. 

Us wanting it applied to last season like Wigan and the EFL wanting it to be to next.

There is potentially an advantage in being found guilty. That being...i believe that if you are then your rolling 3 year period for FFP gets reset to zero. And so effectively we start with a clean slate and perhaps better run finances.

much as though it pains to admit but what is the point of a penalty if it has no impact

[Ghost of Clough]

Not sure how Wednesday thought they could get away with a slap on the wrist despite accepting (some of) the blame (happy with fine or points penalty split over 2 seasons)

 

 

Originally, I was hopeful that our behaviour after the 17/18 season would assist us. We started getting the wage bill under control, looked more towards the academy, etc... However, I no longer think that will help us.

 

It's nice to finally see the breakdown of points deducted based on losses (my guess was slightly out for the £10m+ ranges)

 

First time this mitigating factor has been disclosed, although Birmingham had extra points deducted due to increased losses in each year.

[MackworthRamIsGod]

4 minutes ago, gccrowdpleaser said:

I think, based on the Weds info, that we could have been found guilty in some part and that arguments now are down to when the penalty should be applied. 

Us wanting it applied to last season like Wigan and the EFL wanting it to be to next.

There is potentially an advantage in being found guilty. That being...i believe that if you are then your rolling 3 year period for FFP gets reset to zero. And so effectively we start with a clean slate and perhaps better run finances.

Fantastic, 20 million bid for Wilson incoming.

[Spanish]

12 minutes ago, Ghost of Clough said:

Not sure how Wednesday thought they could get away with a slap on the wrist despite accepting (some of) the blame (happy with fine or points penalty split over 2 seasons)

 

 

Originally, I was hopeful that our behaviour after the 17/18 season would assist us. We started getting the wage bill under control, looked more towards the academy, etc... However, I no longer think that will help us.

 

It's nice to finally see the breakdown of points deducted based on losses (my guess was slightly out for the £10m+ ranges)

 

First time this mitigating factor has been disclosed, although Birmingham had extra points deducted due to increased losses in each year.

 

12 minutes ago, Ghost of Clough said:

from the judgement

The penalty starts at 12

The band applicable to this case is £8 – 10 million, giving a reduction of 5 points, so that the net points deduction starts at 7 points

The seriousness of an intentional breach is an aggravating factor which requires the deduction of at least 3 additional points

However it is fair to note that the Club did very promptly admit the breach and, as set out in its letter dated 2 August, agreed to all the terms and restrictions which had been imposed by the EFL. The evidence from the chief executive of the EFL is that the Club has substantially complied with those conditions. The Club is entitled to an allowance of 1 point for mitigation

[Ghost of Clough]

17 minutes ago, duncanjwitham said:

I meant the 19/20 accounts, which we're yet to file (and 18/19 too - I think it's those that are overdue ATM?).  I know we're passed the end of June, so we can't change anything now, but the amount of profit/loss from 17/18 may have affected whether we met P&S or not.

One of the comments from the IDC report was what happened after July 31st was immaterial for Wednesday. As we've already passed our own deadline, I can't see how it will make a difference. It's also worth noting that the EFL cahrged the two clubs for failing the 2018 period. If the adjusted figures meant failing other periods as well, then we most likely would have been charged for failing multiple periods.

7 minutes ago, gccrowdpleaser said:

I think, based on the Weds info, that we could have been found guilty in some part and that arguments now are down to when the penalty should be applied. 

Us wanting it applied to last season like Wigan and the EFL wanting it to be to next.

There is potentially an advantage in being found guilty. That being...i believe that if you are then your rolling 3 year period for FFP gets reset to zero. And so effectively we start with a clean slate and perhaps better run finances.

This is undoubtedly true. It's still unclear whether Wednesday's stadium profit (moved to 18/19) would allow them a much larger budget for this season. The same would apply to us if we have to make adjustments to our historical amortisation.

[Sparkle]

2 hours ago, therealhantsram said:

Wow. So a clear statement from Wed, that the EFL wanted points deductions for DCFC in a different season to Weds despite us being charged at the same time.

That alone is an utter disgrace.

And vindictive ( why did that not happen with Birmingham city?) 

[gccrowdpleaser]

11 minutes ago, Spanish said:

much as though it pains to admit but what is the point of a penalty if it has no impact

I would agree but their own sanctioning guidelines state that...

'The penalty for breach of the 3 season P&S reporting rules is the deduction of 12 points to commence in the season following the breach 2018/19 for the 3 season period ending in 2018...'

They then set out that the difference in points depending on the breach. I.e if the breach is less than 2m then 9 points are removed.  Down to 12.5m to 15m drops it by 3 points. 12m is only imposed if the breach is 15m plus.

The Wednesday verdict has rule out any issue whatsoever with the stadium sale itself.

It leaves the valuation and the amortisation as the issue. 

If we take Derby at their word (that the value was submitted to the EFL and adjusted as per their request) on the valuation and the fact that the £60m valuation of the Wednesday stadium was approved then I see no way anyone can take legal issue with our valuation. 

That leaves the amortisation issue which as they have approved previously I can see no reason why they can raise the issue now but...if they do then I don’t see it adjusting our compliance to the regulations by more than 3-5m. That would leave is with an 8 or 7 point deduction on the 12 points. Thus a 4 or 5 point overall deduction. 

Based on the EFL's own guidelines that should be applied to the 2019-20 season as that would be rhe following season to that on which the charge was made.

Further to the initial point their own guidelines screw them because if you go up they cannot impose a points deduction following the breach as you are out of the league. Also the limitations stop at £15m. Well if you're prepared to leak 12 points for £15m then you may aswell do it to £50m because the punishment is the exact same.

[RandomAccessMemory]

Things of relevance to us

#26 - The EFL raised certain queries about the sale (I'm not clear on the date, but between submission of documents on 25 April 2018 and 15 May 2018, which was the date mentioned for one of the replies) and I'm going to assume they asked the same questions of us.

Quote

a. Can you please provide any external valuation you have received prior to setting the sale price?

b. Who is purchasing the Stadium? Is it a third party not connected with the Club?

c. When is the sale expected to be completed? As this forecasted profit is not completed, we are minded only to accept these profits within the P&S calculation on completion of the deal to confirm it will be in the Club's accounts within this financial year end.

d. Please provide any documentation in relation to the sale on its completion.

e. Can you please explain how the sale is reflected within the cash flow forecast? There looks to be an issue of shares of £40m rather than receipt of land sale. This then seems to be used immediately to pay working capital loans.

a. Our statement said we did this, and discussed it, and altered it to suit the EFL.

b. If they asked this then there can be no confusion over who was buying the stadium, according to our statement they haven't accused us of any deception.

c. Ours was completed by the year end according to the land registry transaction date.

d. If we also had to provide documentation then there can be absolutely no way the new owner wasn't known, it would have been in this documentation, and so wouldn't have taken until January 2020 for a charge if there was confusion.

e. Ours was reflected in the cash flow forecast.

#28

Quote

He also asked for the provision of an external valuation to support the price that would be paid for the stadium given that the sale would be to the owner.

We have said we did this. If this is what they have requested in this case, why can they now retrospectively get a valuation/s of ours and query the one we received at the time?

#111

Quote

There is no evidence at all that anything had been said by anyone on behalf of the Club to the EFL prior to 31 July that the sale had finally been agreed upon or had been reflected in some written agreement. The EFL knew that a valuation was a vital ingredient of any such arrangement.

and the email sent to the EFL which said

Quote

As discussed, we would like to understand at what point today you will be able to communicate the possibility of the club selling the stadium to the club's owner. I have attached [JK's] last email which outlines the different scenarios. We would be talking about scenario 2 or 3 and our question is whether the Fair Market Value can be based on the value of our insurance for the stadium. As discussed on Friday, we don't agree with the idea of third party valuation report that uses a depreciated replacement cost.

Possibly looks like the EFL asked for the valuation to be DRC based?

Annex 1 - The scenarios mentioned in the email above, very confused here as it says

Quote

set out in JK's email to the Club on 30 May 2020

surely it doesn't mean 2020, and actually means 2018??

I think ours will be

Quote

Scenario 2 - Club sells the stadium to a Company outside of the Football Group but still owned by the Club's owner.

• The transaction would be deemed as a Related Party Transaction in accordance with the P&S Rules and the onus would be on the Club to support the Fair Market Value of the transaction. The simplest way to do this would be through an independent external valuation of the fixed asset.
• Depending on the structure of the group or the other assets/operations of the purchasing company, the Club might still be caught by Rule 1.1.9 of the P&S Rules. Such a circumstance would be if the 'Newco' on purchasing the stadium carried out the match day and non-match day catering and hospitality operations. The purchasing company would be consolidated for the purposes of the P&S Rules resulting in the profit on the sale of the stadium being adjusted out of the results.
• If the purchasing Company is deemed to be a separate operation to the Club Group and the fixed asset can be proven to have been purchased at Fair Market Value, the profit on the sale of the fixed asset would be included in the Club's P&S Calculation.

"The simplest way to do this" - except that it appears not to be all that simple does it as they're now questioning this?!

The stadium is held as an investment property in the 2019 accounts (the first ones) of Gellaw Newco 202, it doesn't appear to carry out any of the things mentioned above (those would I think be down to Club DCFC and Stadia DCFC) and it is separate from the 'Club Group', so should be fine.

[Spanish]

5 minutes ago, gccrowdpleaser said:

I would agree but their own sanctioning guidelines state that...

'The penalty for breach of the 3 season P&S reporting rules is the deduction of 12 points to commence in the season following the breach 2018/19 for the 3 season period ending in 2018...'

They then set out that the difference in points depending on the breach. I.e if the breach is less than 2m then 9 points are removed.  Down to 12.5m to 15m drops it by 3 points. 12m is only imposed if the breach is 15m plus.

The Wednesday verdict has rule out any issue whatsoever with the stadium sale itself.

It leaves the valuation and the amortisation as the issue. 

If we take Derby at their word (that the value was submitted to the EFL and adjusted as per their request) on the valuation and the fact that the £60m valuation of the Wednesday stadium was approved then I see no way anyone can take legal issue with our valuation. 

That leaves the amortisation issue which as they have approved previously I can see no reason why they can raise the issue now but...if they do then I don’t see it adjusting our compliance to the regulations by more than 3-5m. That would leave is with an 8 or 7 point deduction on the 12 points. Thus a 4 or 5 point overall deduction. 

Based on the EFL's own guidelines that should be applied to the 2019-20 season as that would be rhe following season to that on which the charge was made.

Further to the initial point their own guidelines screw them because if you go up they cannot impose a points deduction following the breach as you are out of the league. Also the limitations stop at £15m. Well if you're prepared to leak 12 points for £15m then you may aswell do it to £50m because the punishment is the exact same.

yes as I've said previously today it looks like the amortisation is the issue and reliance on EFL approval is not a full defence.  We shall see soon

[Wignall12]

8 minutes ago, Spanish said:

yes as I've said previously today it looks like the amortisation is the issue and reliance on EFL approval is not a full defence.  We shall see soon

Will we ? .......it keeps dragging on !!

[Ghost of Clough]

9 minutes ago, Spanish said:

yes as I've said previously today it looks like the amortisation is the issue and reliance on EFL approval is not a full defence.  We shall see soon

I struggle to see us failing P&S unless we're guilty in some way regarding the stadium. Even if using the group accounts to calculate our P&S position, a recalculation of amortisation will (almost definitely) ensure we remain within limits by an estimate £3m - £20m if based on club accounts.

[JfR]

Am I the only one baffled at point 94 of the main decision where the article starts discussing the intricacies of, er... 'unlawful carnal knowledge' I think is the softest way of putting it?

[Spanish]

5 minutes ago, Ghost of Clough said:

I struggle to see us failing P&S unless we're guilty in some way regarding the stadium. Even if using the group accounts to calculate our P&S position, a recalculation of amortisation will (almost definitely) ensure we remain within limits by an estimate £3m - £20m if based on club accounts.

not sure restating player values based on how the rest of the league are doing it is not simple, well at least not to me. 

It will be interesting to see how they make the argument if it is the stadium because it will have to have one eye on SWFC, AV and Reading

[Ambitious]

1 hour ago, Ghost of Clough said:

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

I find this absolutely despicable in all honesty - it's an organisation trying to harm football clubs within their remit. They can't behind any other excuse. If we do get a points deduction, 12 points, we should push for the deduction to come in the season that we should've been punished. 

[Spanish]

2 minutes ago, JfR said:

Am I the only one baffled at point 94 of the main decision where the article starts discussing the intricacies of, er... 'unlawful carnal knowledge' I think is the softest way of putting it?

I agree it is an unusual use of that particular precedent!

[Mucker1884]

9 minutes ago, JfR said:

Am I the only one baffled at point 94 of the main decision where the article starts discussing the intricacies of, er... 'unlawful carnal knowledge' I think is the softest way of putting it?

I can't get my head round that

 

 

...said the step-daughter!   

 

 

[Sparkle]

The EFL are a shockingly poorly run farce aren’t they ? 

[therealhantsram]

The timeline from these documents is interesting for us.

Hearing took place June 22-30
Decision communicated to EFL and club on 16 July
Sanction communicated to EFL and club on 31 July.

Our hearing started 13 July.

In our case there have been consistent press rumours since last weekend that 'things don't look good for Derby'. It could be that the press have wind of the decision in our case, but we are awaiting details of the sanction.

Given all the emphasis in the reports about being consistent, it would not surprise me if the panel in our case were waiting for the written verdict from the Wed case before setting our sanction.