EFL Verdict

[RoyMac5]

9 minutes ago, kevinhectoring said:

If we stick our heads in the sand we all look like fools and the club just gets more and more isolated 

Where was the 'head-sticking'? The EFL are not going to turn into a pleasant, easy to work with organisation just because we re-do our P&S straight line as they want. Why not re-do them as we want and include detailed notes and descriptions - that was the sticking point wasn't it, no clear workings out?

[duncanjwitham]

1 hour ago, Spanish said:

this is the core of it, there are no records of our 6 monthly meetings to decide their ERV

That's not the core of it though, is it?  The LAP found that we couldn't use ERVs at all.  They were disparaging about our methods for doing the calculations, but choose not uphold any of the appeals on that issue because the original DC made no mistakes (didn't "err in law" or whatever it was). The only thing they upheld (beyond the issue from the DC about not being clear in the accounts) was that the DC ignored the professors testimony, which was specifically on the use of ERVs at all. The EFL's argument was basically that you cannot use ERVs unless you have a guaranteed purchase (which players will never have) and that's what the LAP ruled was correct.  So it wouldn't matter if we had a perfect, 100% reliable method for calculating them, because we cannot *guarantee* that we can sell a player for that ERV, we cannot expect to gain any economic benefit from it.

[Spanish]

13 minutes ago, duncanjwitham said:

That's not the core of it though, is it?  The LAP found that we couldn't use ERVs at all.  They were disparaging about our methods for doing the calculations, but choose not uphold any of the appeals on that issue because the original DC made no mistakes (didn't "err in law" or whatever it was). The only thing they upheld (beyond the issue from the DC about not being clear in the accounts) was that the DC ignored the professors testimony, which was specifically on the use of ERVs at all. The EFL's argument was basically that you cannot use ERVs unless you have a guaranteed purchase (which players will never have) and that's what the LAP ruled was correct.  So it wouldn't matter if we had a perfect, 100% reliable method for calculating them, because we cannot *guarantee* that we can sell a player for that ERV, we cannot expect to gain any economic benefit from it.

the core problem was mentioned by @sagewhich I was replying to.  If we had made some effort to properly record how we did it I think it would have helped our case.  As it is it looks desperate and designed to kick the can until we found some magic beans which we did when we sold PP.

[Woodley Ram]

17 minutes ago, duncanjwitham said:

That's not the core of it though, is it?  The LAP found that we couldn't use ERVs at all.  They were disparaging about our methods for doing the calculations, but choose not uphold any of the appeals on that issue because the original DC made no mistakes (didn't "err in law" or whatever it was). The only thing they upheld (beyond the issue from the DC about not being clear in the accounts) was that the DC ignored the professors testimony, which was specifically on the use of ERVs at all. The EFL's argument was basically that you cannot use ERVs unless you have a guaranteed purchase (which players will never have) and that's what the LAP ruled was correct.  So it wouldn't matter if we had a perfect, 100% reliable method for calculating them, because we cannot *guarantee* that we can sell a player for that ERV, we cannot expect to gain any economic benefit from it.

it didn't help that the EFL put in Pope as an expert and we didn't. the fact that we had to declare additional figures in 2020 as the amortisation figures were not working didnt help  

[duncanjwitham]

1 minute ago, Spanish said:

the core problem was mentioned by @sagewhich I was replying to.  If we had made some effort to properly record how we did it I think it would have helped our case.  As it is it looks desperate and designed to kick the can until we found some magic beans which we did when we sold PP.

I don't think it would have made any difference at all.  The first step was proving that we were even allowed to do what we were doing - having failed to do that, whether we were doing it well or not is irrelevant.  If we'd found a random accountant to stand up in the DC and say that what we were doing is perfectly normal, then that would have probably been enough.  The "error in law" was ignoring the expert in the room - if we'd had competing experts and the DC had found ours more credible, then there would have been no error. The DC were already convinced what we were doing was okay, so getting an expert witness to agree to it should have been a rubber-stamping exercise.

Beyond that, the DC were satisfied our methods for calculating ERVs were OK (despite the shoddy record-keeping etc), and the LAP found no grounds to overrule that.  So keeping better records would have made no difference.  The screwup the club is responsible for is not getting our own expert witness.  That's what ultimately cost us.

Obviously that doesn't excuse the poor record-keeping, it's quite frankly pathetic and embarrassing for the club to be admitting that in a legal proceeding

[Spanish]

5 minutes ago, duncanjwitham said:

I don't think it would have made any difference at all.  The first step was proving that we were even allowed to do what we were doing - having failed to do that, whether we were doing it well or not is irrelevant.  If we'd found a random accountant to stand up in the DC and say that what we were doing is perfectly normal, then that would have probably been enough.  The "error in law" was ignoring the expert in the room - if we'd had competing experts and the DC had found ours more credible, then there would have been no error. The DC were already convinced what we were doing was okay, so getting an expert witness to agree to it should have been a rubber-stamping exercise.

Beyond that, the DC were satisfied our methods for calculating ERVs were OK (despite the shoddy record-keeping etc), and the LAP found no grounds to overrule that.  So keeping better records would have made no difference.  The screwup the club is responsible for is not getting our own expert witness.  That's what ultimately cost us.

Obviously that doesn't excuse the poor record-keeping, it's quite frankly pathetic and embarrassing for the club to be admitting that in a legal proceeding

your final comments are spot on.  Also in DC1 we made a big thing of how beastly the EFL was to us, equally pathetic

[RadioactiveWaste]

4 minutes ago, duncanjwitham said:

I don't think it would have made any difference at all.  The first step was proving that we were even allowed to do what we were doing - having failed to do that, whether we were doing it well or not is irrelevant.  If we'd found a random accountant to stand up in the DC and say that what we were doing is perfectly normal, then that would have probably been enough.  The "error in law" was ignoring the expert in the room - if we'd had competing experts and the DC had found ours more credible, then there would have been no error. The DC were already convinced what we were doing was okay, so getting an expert witness to agree to it should have been a rubber-stamping exercise.

Beyond that, the DC were satisfied our methods for calculating ERVs were OK (despite the shoddy record-keeping etc), and the LAP found no grounds to overrule that.  So keeping better records would have made no difference.  The screwup the club is responsible for is not getting our own expert witness.  That's what ultimately cost us.

Obviously that doesn't excuse the poor record-keeping, it's quite frankly pathetic and embarrassing for the club to be admitting that in a legal proceeding

I think given the time money and effort we put in to defending our case we should've done. Although it's possible every one qualified that we asked declined to take it on as ours was the more risky position. Having expert witness testimony found against could impact a career. I only mean that in so far as anyone qualified to be an expert witness is likely to be highly conservative in approach.

[duncanjwitham]

3 minutes ago, RadioactiveWaste said:

I think given the time money and effort we put in to defending our case we should've done. Although it's possible every one qualified that we asked declined to take it on as ours was the more risky position. Having expert witness testimony found against could impact a career. I only mean that in so far as anyone qualified to be an expert witness is likely to be highly conservative in approach.

The thing is though, an expert witness doesn't even really have to comment on our specific position.  They just had to say it's fine to use ERVs for intangible assets without a guaranteed purchaser, maybe state the type of situations where it's acceptable or unacceptable to use them etc. The DC can then make their own determination as to whether we meet those criteria or not. 

[EraniosSocks]

[RoyMac5]

2 minutes ago, duncanjwitham said:

The thing is though, an expert witness doesn't even really have to comment on our specific position.  They just had to say it's fine to use ERVs for intangible assets without a guaranteed purchaser, maybe state the type of situations where it's acceptable or unacceptable to use them etc. The DC can then make their own determination as to whether we meet those criteria or not. 

So are you saying we didn't bother, or that we hadn't realised that we might be challenged on whether using ERV was allowable at all?

[duncanjwitham]

2 minutes ago, RoyMac5 said:

So are you saying we didn't bother, or that we hadn't realised that we might be challenged on whether using ERV was allowable at all?

We don't know why.  Maybe we didn't think we needed to because we had our own accountant there to explain things. Maybe we decided it wasn't worth paying for one.  The DC offered us the chance to defer that part of the charge so we could prep an expert, so time-pressure is no excuse, but maybe we just wanted to get it sorted as quickly as possible.  But whatever the reason, it's what cost us.

[Van der MoodHoover]

Sounds like an inexplicable own goal. 

[RoyMac5]

Surely we will appeal if the EFL don't to ensure that time runs out for stupid league swapping ideas!?

[ColonelBlimp]

On 28/06/2021 at 08:51, Ghost of Clough said:

"difficult to have sympathy for Derby given their indiscretions" - indiscretions originally approved by the EFL for 3 consecutive accounting periods.

"independent body has now opted to dole out a fine alone and not a points deduction like the twelve points Sheffield Wednesday were docked last year" - yeah, that's probably because the charge wasn't related to overspending ?

"clear examples of points being an appropriate sanction for such rule breaks and that should happen" - really? I don't think any club has ever been charged for using an improper amortisation policy. 

"that should mean the penalty being applied for last season which would see Derby relegated to League One" - based on what exactly? Because a verdict for SWFC was arrived at just after the end of last season and had their penalty applied to 20/21?

 

The problem is the perception of us "cheating P&S", which automatically means points deduction in people's minds.

Makes you want to sign up to every club forum in the land and rebut all this nonsense. Put them right on a few things.

Not me though, I can't be bothered.

[duncanjwitham]

4 minutes ago, RoyMac5 said:

Surely we will appeal if the EFL don't to ensure that time runs out for stupid league swapping ideas!?

The only real incentive for us to appeal is to reduce the fine. In theory we could ask them to strike off the requirement to resubmit the accounts, but given that it's clearly the most logical response to the hearing, and not even a punishment in and of itself, I think there's zero chance of that getting changed.  Us appealing won't delay anything.

Personally, I'd just take the fine on the chin and walk away from this one.

[Tamworthram]

16 minutes ago, RoyMac5 said:

Surely we will appeal if the EFL don't to ensure that time runs out for stupid league swapping ideas!?

Why? If they don’t appeal (I don’t think they will) then the punishment will be a £100k fine plus the need to resubmit our accounts. We have until 18th August to submit (after the season has started) so, any points deduction would come next season.

[Jimbo Ram]

16 minutes ago, duncanjwitham said:

The only real incentive for us to appeal is to reduce the fine. In theory we could ask them to strike off the requirement to resubmit the accounts, but given that it's clearly the most logical response to the hearing, and not even a punishment in and of itself, I think there's zero chance of that getting changed.  Us appealing won't delay anything.

Personally, I'd just take the fine on the chin and walk away from this one.

Just a fine would be a great result, best one we have had in months ?

[DCFC1388]

7 minutes ago, Tamworthram said:

Why? If they don’t appeal (I don’t think they will) then the punishment will be a £100k fine plus the need to resubmit our accounts. We have until 18th August to submit (after the season has started) so, any points deduction would come next season.

Any punishment for when the accounts are resubmitted will he applied next season regardless of if we submit them before or after the season starts

[Mucker1884]

7 minutes ago, Jimbo Ram said:

Just a fine would be a great result, best one we have had in months ?

You say that... and in all honesty, that was my initial thought.  A sigh of relief all round, was my thought... and still is!

 

But of course, if you are innocent... or truly and realistically believe you are innocent... then even a fiver at £1 per week would be deemed unfair, and worthy of appeal.

Of course, neither you, I, nor the gatepost know what Mel and/or his advisors are thinking!  ?

[Tamworthram]

14 minutes ago, DCFC1388 said:

Any punishment for when the accounts are resubmitted will he applied next season regardless of if we submit them before or after the season starts

That’s my point. All the EFL can appeal is the severity of the punishment already communicated (ie fine and resubmit accounts). So, if they don’t appeal then there is no chance (as I understand it) of any retrospective points deduction.