EFL appeal

[Ambitious]

9 minutes ago, Curtains said:

This is so annoying and it’s just another go at Derby .

https://footballleagueworld.co.uk/Derby-countys-bizarre-strategy-of-determining-player-values-revealed-as-efl-saga-rumbles-on/

PS The author regularly covers Nottingham Forest. 

————-—————-

The guy is a Forest fan, but it doesn't deter from what he's said. I haven't seen the Athletic article and I'm not about to sign up, but if that's true then what he's said isn't incorrect. 

The club is using a website to determine player values: why not just use Fifa or Football Manager? (that's a joke BTW)

It's becoming very clear with the more that comes to light that Mel Morris is an awful judge of character and trusts the wrong people with his money and his business. This is up there with Ince's mum recommending Mbappe for me. What an absolute farce of a football club. 

[Curtains]

 

[BaaLocks]

50 minutes ago, Curtains said:

You are missing the fact that the EFL want to scapegoat Derby County .

I think you're also missing the point that Derby have played this like a teenage maths student who has watched two YouTube videos and thinks they are Warren Buffett. Matt Slater has apprised it very well on The Athletic but key points such as Derby being able to present any valid method of calculating ERV and openly using tools such as Transfermkt to do so just shows how open they have left themselves to not only ridicule but also punishment. I totally get that they tried to game the system, fuelled in no small part by Mel's openly derisive views of FFP, but they completely ballsed this up and have got caught. Now we will have to pay the price, and it will not be in our hands to determine what that price is (clue: it's not on Transfermkt).

Link to The Athletic read, needs a subscription but - if I may - it's probably worth it in the next few weeks, this race is far from run.

https://theathletic.com/2582397/2021/05/13/explained-amortisation-delays-and-disapproval-the-efls-appeal-win-over-Derby/

[duncanjwitham]

Just now, Ambitious said:

The club is using a website to determine player values: why not just use Fifa or Football Manager? (that's a joke BTW)

It's purely for accounting purposes, it's not saying we use websites to decide on fees for buying or selling players or anything.  The reason to use a website is to have a 3rd party opinion factored into the valuations, so it's not just a matter of the club plucking values out of the air to suit our own needs.  We had to demonstrate that our method is reliable and systematic, and cross-checking against a website is a reasonable idea IMO.  It's sort of the same principle as getting a 3rd party valuer in to value the stadium etc.  The bigger worry is that we didn't appear to document any of this process, not that the process involved a website.

[BaaLocks]

1 hour ago, Ambitious said:

Trevor Birch was apparently the CEO of our club in 2007 for a very short period. I genuinely can't remember him, or what happened, but perhaps he's got an axe to grind against Mel and/or the club. He came in the summer of 2007 (after our promotion) and left in October 2007 (when it was apparent we were poo). I'd imagine he left when Adam Pearson became chairman? I'm not sure, but Mel would've been on the board when he was appointed CEO. 

He was with us for a very short time and has had a far more illustrious career since leaving than he ever would have had with us. I see no reason why he would either want to execute some grudge against us or risk both his reputation or current position to do so. There's just no reason plus, as you say, the only thing that remains from his time with us is the building (which we don't own any more - remember that some day, Mel 'he's one of our own' Morris sold our ground to fund, amongst other things, Bradley Johnson, Jacob Butterfield and Marcus Olsson).

Edited May 13, 2021 by BaaLocks

[Indy]

45 minutes ago, kevinhectoring said:

you were responding to my gripe that the club statement contained too much spin.

The club statement says:  the Club’s witnesses were found to have given truthful evidence about the amortisation policy, and their judgments were made in light of carefully researched and objectively justifiable information. The LAP did not interfere with that important finding.  

Don't think that overall this reflects the LAP judgement at all - it's a shame 

No. But it is less biased than the EFL’s short triumphalist statement, I think.
 

And a lot of the panels report seems to be irrelevant speculation and comment, and negative in tone. Including opinion explicitly based on evidence that wasn’t allowed to be submitted is one example. Also giving their opinion on how they would have found against the club on charges that hadn’t been appealed is another. 

 

[BaaLocks]

4 minutes ago, duncanjwitham said:

We had to demonstrate that our method is reliable and systematic

Which we completely failed to do and it's why we're where we are - in a nutshell

[duncanjwitham]

Just now, BaaLocks said:

Which we completely failed to do and it's why we're where we are - in a nutshell

Not really. The original panel agreed our method was reliable and systematic. And the appeals panel didn't overturn that aspect of it.  The question is whether we are allowed to do it at all.

[Indy]

50 minutes ago, duncanjwitham said:

That's literally what the second charge was - that our accounts did not comply with FRS102. What changed late on was the exact particulars of how we weren't compliant, once it became clear exactly what amortisation policy we were using.  We knew all along that we would have to defend the accounts compliance. Once the charges changed slightly, we were given the choice of an adjournment or to introduce additional evidence, and we chose neither.

I think bundling criticism of not using straight line amortisation and con-compliance with FRA102 implied that the charge was that only straight line amortisation was compliant. That certainly seems to be how the club read the charge in their rebuttal of it. As this isn’t true, they hadn’t prepared an argument against it beyond directing the commission to look at the regulations. 
 

That’s how I read it, anyway. 

[kevinhectoring]

36 minutes ago, BramcoteRam84 said:

but even the latest panel said we acted truthfully and honestly

there are numerous comments in the judgement which seriously call into question the club's good faith - see some below. These are papered over in the club statement, which is an attempt at a whitewash.  The Club must have considered a high level resignation in response to this episode. Problem is, it's got so personal between MM and the EFL that his judgement is clouded. It's no wonder we have become such an outcast

 

25. These explanations were at best confusing and at worst seriously misleading. As appears below, they misstated the principles relating to ‘residual values’ (which were always nil at the end of the period of the player contract) (see DC decision [52][58][223b] and [228a]) and wrongly stated that they assumed an ‘active market’, which they did not do.

26 ...the note of the meeting records that the policy was said by the Club to be “in line with that disclosed in the Club’s accounts” (which was quite wrong) and records the explanation that “the Club used residual values when assessing each Player’s amortisation charge” (which was also quite wrong). Given the confusion, which was at least largely the fault of the Club, the criticism of EFL by DC seems remarkably harsh,

28. The DC made disclosure orders in relation to documents in the Club’s control relevant to the accounting treatment. However, the Club did not produce a single document evidencing or relating to the accounting treatment adopted and confirmed that none existed.    

[BaaLocks]

1 minute ago, duncanjwitham said:

Not really. The original panel agreed our method was reliable and systematic. And the appeals panel didn't overturn that aspect of it.  The question is whether we are allowed to do it at all.

Original panel overturned, which is what an appeal is, so their view is now redundant.

Appeals panel absolutely overturned the validity of the process - both whether it gave us an unfair advantage and whether the process was well implemented (the 'marking our own homework' piece referred to in The Athletic article. I do recommend reading it for clarity).

[duncanjwitham]

2 minutes ago, Indy said:

I think bundling criticism of not using straight line amortisation and con-compliance with FRA102 implied that the charge was that only straight line amortisation was compliant. That certainly seems to be how the club read the charge in their rebuttal of it. As this isn’t true, they hadn’t prepared an argument against it beyond directing the commission to look at the regulations. 
 

That’s how I read it, anyway. 

It shouldn't have mattered though.  The charge was that our accounts were non-compliant, so we should have had the arguments prepared that they were compliant.  Telling the panel to just RTFM was never going to work.

[Leeds Ram]

I've not read every page as been a bit snowed under this week but the obvious questions seem to be 

 

1) Is there precedent for the EFL deducting points once a season has finished? (yes) 

2) Did the points deduction have a significant effect such as relegation? (yes) 

3) were the circumstances of the point deduction similar to ours or was the egregiousness of the rule breaking comparable to our own? (from what I can gather ours appear worse over a longer period of time)

4) Does the jeopardy  the EFL have in this case match others i.e., reputational damage, potential court costs, and media scandal? (This appears to be our get out tbh) 

It all just reads like the club's been run by a bunch of jokers who've seriously screwed us over and put is in jeopardy. Combined with the Alonso takeover bid it just makes me want to weep. 

[duncanjwitham]

1 minute ago, BaaLocks said:

Original panel overturned, which is what an appeal is, so their view is now redundant.

Appeals panel absolutely overturned the validity of the process - both whether it gave us an unfair advantage and whether the process was well implemented (the 'marking our own homework' piece referred to in The Athletic article. I do recommend reading it for clarity).

Not correct.  The report document from the appeal is very clear - the EFL appealed on 4 grounds, 2 of which were the reliable and systematic nature of our approach, and they upheld the original panel in both of those appeals.  They weren't overly happy with the original panels decisions, or our process for doing the valuations, but they didn't overturn them.

The grounds the EFL won on is whether you can factor in economic benefits from player sales into your amortization, not our process for doing it.

[DarkFruitsRam7]

39 minutes ago, rsmini said:

I’ve not read the latest Athletic article but reading through this thread on Twitter the situation sounds bizarre

 

 

This is an excellent article and an example of why The Athletic is worth paying for.

Two things stuck out to me in particular.

This sounds pathetic from us:

And this tells you everything you need to know about how little the EFL care about protecting football clubs:

[Amberram]

2 hours ago, Archied said:

Roper ?

Mildred

[RandomAccessMemory]

Just so we’re clear, these were the original 5 respects in which the EFL said our amortisation was contrary to FRS 102.

1. Was dropped before the IDC when the EFL realised they had misunderstood our approach and that we didn’t have a non-zero value at the end of their contracts, ie. when they are worth zero because of Bosman.

2. IDC dismissed, LAP substituted their decision below.

3 and 4. Dismissed by both the IDC and the LAP.

5. IDC original decision stands.

These are the two things the IDC have to decide on ‘punishment’ (from the list I posted before) for.

What happens next is anyone’s guess, but this is not (at least at this point) about us having overspent in that 3 year period.

The way I understand it is if the IDC simply says we need to restate our accounts for that period, as our ‘punishment’ for the 2 decisions above, to make them compliant, only then (if we have gone over the P&S limit) is the point at which a new charge would be bought for that.

So, I guess this is about what punishment we should get for having non compliant accounts for those years, and what, if any, mitigating factors there are for that.

[Spanish]

11 minutes ago, BaaLocks said:

I give that about 20 mins before it's taken down ?

it does frustrate me that here important facts that are getting lost

The EFL made 2 charges against us the first was dismissed an not appealed.  The second, the first particular was dropped by the EFL and we were found guilty of the fifth and not the others

They appealed 4 out of the five particulars, the fifth was dropped as it was outside jurisdiction and it is only the second particular which the LAP upheld the appeal.  I say only but you know what I mean.  So out of a considerable number of accusations the EFL have made a complete balls up.  Surely this is a story in itself.  it just looks like they have being throwing mud at a wall and a bit has stuck

[BaaLocks]

Just now, duncanjwitham said:

Not correct.  The report document from the appeal is very clear - the EFL appealed on 4 grounds, 2 of which were the reliable and systematic nature of our approach, and they upheld the original panel in both of those appeals.  They weren't overly happy with the original panels decisions, or our process for doing the valuations, but they didn't overturn them.

The grounds the EFL won on is whether you can factor in economic benefits from player sales into your amortization, not our process for doing it.

Wording direct from the appeal states "the EFL had strong grounds for contending the treatment adopted by the club was neither systematic nor reliable" but let's leave it there as I doubt we're going to agree on it.

[RandomAccessMemory]

13 minutes ago, kevinhectoring said:

there are numerous comments in the judgement which seriously call into question the club's good faith - see some below. These are papered over in the club statement, which is an attempt at a whitewash.  The Club must have considered a high level resignation in response to this episode. Problem is, it's got so personal between MM and the EFL that his judgement is clouded. It's no wonder we have become such an outcast

 

25. These explanations were at best confusing and at worst seriously misleading. As appears below, they misstated the principles relating to ‘residual values’ (which were always nil at the end of the period of the player contract) (see DC decision [52][58][223b] and [228a]) and wrongly stated that they assumed an ‘active market’, which they did not do.

26 ...the note of the meeting records that the policy was said by the Club to be “in line with that disclosed in the Club’s accounts” (which was quite wrong) and records the explanation that “the Club used residual values when assessing each Player’s amortisation charge” (which was also quite wrong). Given the confusion, which was at least largely the fault of the Club, the criticism of EFL by DC seems remarkably harsh,

28. The DC made disclosure orders in relation to documents in the Club’s control relevant to the accounting treatment. However, the Club did not produce a single document evidencing or relating to the accounting treatment adopted and confirmed that none existed.    

Ultimately irrelevant as the only thing the LAP did was substitute their decision for the IDC’s on the second particular only.