Mel Morris interview on Radio Derby 1pm

[Red Ram]

1 hour ago, RadioactiveWaste said:

Thing is, it *could* reflect reality. In Derby's case it  "as if by magic" made a reality in which we met FFP/P&S rules in years where we'd spent a lot of money. Funny that. If it had been implimented during the Nigel Clough/GSE auterity football years it might have been a whole lot more convincing that it was being done as an improvment to the accounting methodology.

Part of what I thought came up in the hearings and written reasons was essentially (paraphrasing) "There's not enough reliable data to make using a non-straight line method defensible" after all each player is an individual human being who happens to be talented at playing football, each player will be on an individual contract, you can't really reliably say what the value of each of those contracts would be at any point other than the start (you know what you paid) and the end (there is no longer value) which is why everyone else does it in a straight line. Doesn't mean you'd have to do it in a straight line, but you'd have to present a good case of why a straight line wasn't best.

I did thnk that prehaps what could be defensible is a curve (ar series of curves) made from a large scale analysis of transfers as to how contract values depreciate over different contract lengths (and ages, positions etc) and develop a standarised non-liniar methodology - perhaps someone doing a data science course might want to do a paper on that?

 

They did exactly that. MM said they looked at 25,000 historical transfers and correlated them to remaining contract length. The defence of our amortisation policy was the strongest part of the interview.

[Orphanram]

I’m still appalled by the communication to the club employees from the manager to the general staff and think that was brushed over to a degree. That alone is unforgivable and any leader of any organisation needs to own that responsibility. Morris in this respect has not only failed in this but didn’t show nearly enough contrition for this in my opinion: That said, the detail he shared about the events that have transpired over the last three years does shine a light in the ridiculous way the  EFL & the Premier league try to administer the rules and regulations that determine the fiscal landscape that clubs operate within. Institutionally football is broken and Morris thought he could break through that. Clearly he couldn’t and he gambled with our club to try and achieve that with the devastating consequences we now face. From a wider perspective he might be vindicated in the years that follow this but unfortunately this has come at the expense at the club he claims to support and love. 

[ck-]

6 minutes ago, Red Ram said:

They did exactly that. MM said they looked at 25,000 historical transfers and correlated them to remaining contract length. The defence of our amortisation policy was the strongest part of the interview.

Except that if I recall correctly, we were criticised, even by the broadly supportive original hearing, for having no records for how we calculated values. No process, no formula, and - crucially - no evidence whatsoever.

Did I misremember?

Edited September 19, 2021 by ck-
Typo

[RoyMac5]

4 minutes ago, ck- said:

Except that if I recall correctly, we were criticised, even by the broadly supportive original hearing, for having no records for how we calculated values. No process, no formula, and - crucially - no evidence whatsoever.

Did I misremember?

True. I assumed we'd lost the fag packet we'd worked stuff out on.

[CBRammette]

1 hour ago, Woodypecker said:

Not condoning Mel's culpability at all - the failed gambles are clear enough, he's put us where we are - though you missed one  'misfortune' out! The fateful Joiner's Arms pi$$gate crash and morale/squad-crippling aftermath. It put the skates under Cocu. Has any club ever seen such a stupid, reckless caper from captain and his jolly pals? Then, having to pay off clown Keogh, to boot...Mel's disastrous sacking decision!

Forget Balotelli's "Why Always Me?"....it's "Why Always Derby?"

In everything this weekend almost forgot that!  Yes the sacking decision - it was a pivotal moment wasnt it. 

[Red Ram]

4 hours ago, JuanFloEvraTheCocu'sNesta said:

So in summary, we are in administration because high-flying, multi-millionaire businessman Mel Morris accidentally stated in public that he'd eventually have to let the club go for nothing, thus ensuring no buyer with half a brain would table an offer until we're in administration and the club is available for nothing?

How did this bloke ever get rich?

This was the part of the interview that made the least sense of all though. It's a real pity neither Nicholson or Dawes challenged him on it or at least asked him to elaborate.

If Mel was prepared to let the club go for nothing as long as the debt was paid off, how does it benefit a potential purchaser to wait for us to go into Administration? The purchase price was already zero and as per Keiran Maguire's analysis, the excellent summary here https://www.football365.com/news/Derby-county-administration-failure-opinion, and the Peter Marples facebook post, most of the debt will still have to paid off in full even after coming out of Administration (i.e. the debts to HMRC and to MSD etc).

So, a prospective purchaser who decides to wait it out will, due to the interest continuing to acrue on the loans, just increase the amount of debt they're going to inherit as it will just keep rising. Add to that the obvious point that going into Administration virtually guarantees relegation to League One due to the 12 points deduction and it means that any new owner would be buying a club with an even less sustainable business model than we already have (much lower TV money, lower attendances, less sponsorship income etc). Just from a purely business perspective, why would a prospective owner decide to do that? And from a football point of view, they'd have already demonstrated that they didn't have the interests of the club at heart anyway.

Mel's optimism that going into Administration will magically unlock the transfer of the club to new owners who have been waiting in the wings just seems unfounded to me. I hope I'm proven entirely wrong...

 

Edited September 19, 2021 by Red Ram

[Monkeytennis12345]

Take it on the chin....we actually have no choice anymore. It's going to be a long punishment.......I hate football at the moment :{ 

[vonwright]

Bottom line for me is that while I can accept a) Covid has led to a huge drop off in revenues and b) the EFL hasn't covered itself in glory with the p and s stuff, it remains the case that we've been massively overspending for years, we've run up debts (and tax bills) that we can't settle, and it feels irrelevant now whether our accounting system was within the rules or not. What matters is the financial reality behind it, and for that - for the fact we were in such a precarious position when Covid hit - I'm afraid I do blame the owner. 

Edited September 19, 2021 by vonwright

[ScamRam]

3 minutes ago, vonwright said:

Bottom line for me is that while I can accept a) Covid had led to a huge drop off in revenues and b) the EFL hasn't covered itself in glory with the p and s stuff, it remains the case that we've been massively overspending for years, we've run up debts (and tax bills) that we now can't settle, and it feels irrelevant now whether our accounting system was within the rules or not. What matters is the financial reality behind it, and for that - for the fact we were in such a precarious position when Covid hit - I'm afraid I do blame the owner. 

Bravo, my thoughts entirely

[therams69]

43 minutes ago, rustylee said:

But even if everyone on here had bought into what you said in May how would that have stopped us being where we are now?

Highinsight is a wonderful thing. We should have pushed more for answers. We should have got a plan back then. We should have offloaded in the summer. We should have been involved with the club to stop this from happening. Collectively we could have helped, whether thats by volunteering, buying a stake etc etc - no expert in this but if Mel had opened up more rather than being how he is, who knows...

[bimmerman]

18 minutes ago, Red Ram said:

This was the part of the interview that made the least sense of all though. It's a real pity neither Nicholson or Dawes challenged him on it or at least asked him to elaborate.

If Mel was prepared to let the club go for nothing as long as the debt was paid off, how does it benefit a potential purchaser to wait for us to go into Administration? The purchase price was already zero and as per Keiran Maguire's analysis, the excellent summary here https://www.football365.com/news/Derby-county-administration-failure-opinion, and the Peter Marples facebook post, most of the debt will still have to paid off in full even after coming out of Administration (i.e. the debts to HMRC and to MSD etc).

So, a prospective purchaser who decides to wait it out will, due to the interest continuing to acrue on the loans, just increase the amount of debt they're going to inherit as it will just keep rising. Add to that the obvious point that going into Administration virtually guarantees relegation to League One due to the 12 points deduction and it means that any new owner would be buying a club with an even less sustainable business model than we already have (much lower TV money, lower attendances, less sponsorship income etc). Just from a purely business perspective, why would a prospective owner decide to do that? And from a football point of view, they'd have already demonstrated that they didn't have the interests of the club at heart anyway.

Mel's optimism that going into Administration will magically unlock the transfer of the club to new owners who have been waiting in the wings just seems unfounded to me. I hope I'm proven entirely wrong...

 

He's in my opinion just tried to save face and twaddle a reason out as to why he's not the bad guy

At this moment in time,I believe that liquidation is round the corner. It's awful to think it that the club I've loved for 30 years could be wiped away but unfortunately that's the reality. Who'd buy a debt laden club with less guaranteed income?

[Tamworthram]

8 minutes ago, vonwright said:

Bottom line for me is that while I can accept a) Covid had led to a huge drop off in revenues and b) the EFL hasn't covered itself in glory with the p and s stuff, it remains the case that we've been massively overspending for years, we've run up debts (and tax bills) that we now can't settle, and it feels irrelevant now whether our accounting system was within the rules or not. What matters is the financial reality behind it, and for that - for the fact we were in such a precarious position when Covid hit - I'm afraid I do blame the owner. 

By and large, I agree with you. The only questions I’d have (I’m sure someone out there has the answer) are: is the debt owed to HMRC actually PAYE and When did we start to run it up? I thought it was linked to Covid in the sense that the clubs income fell off a cliff but it still had PAYE to pay.

[I know nuffin]

2 hours ago, I know nuffin said:

relisted

Religated

 

 

Edited September 19, 2021 by I know nuffin
Utocorrect

[Spanish]

2 hours ago, G STAR RAM said:

Incorrect.

The stadium was purchased in 2018.

He owes cash for the purchase, the funds he has put in since then could be itemised as loan repayments, why is that incorrect?

[Spanish]

1 hour ago, Ramtastic ones said:

Probably and I say that with the acceptance that I may be wrong. In reality teams buy player who perform to the expected level an in this scenario the model of exponential depreciation works. If a player under performs then the straight line model applies - unless the club decided to off load, then the negative exponential would apply. If a player over performs then his asset value would increase. Accordingly, no fixed model is correct and logically the method of amortisation applied, should reflect the individual asset. For example Bogle's asset value increased, jozefoons decreased - why treat them the same?

You can’t increase the value

[Topram]

Is there a time frame on when we could go into liquidation? How long do we have for a potential owner to come in

[CornwallRam]

3 minutes ago, Topram said:

Is there a time frame on when we could go into liquidation? How long do we have for a potential owner to come in

You can't start two seasons in administration and remain in the league. So August 2023 is a key date.

[Topram]

1 minute ago, CornwallRam said:

You can't start two seasons in administration and remain in the league. So August 2023 is a key date.

Thank you, like some fans I have no clue how it all works just the longer we have before liquidation the better 

[Red Ram]

4 minutes ago, Topram said:

Is there a time frame on when we could go into liquidation? How long do we have for a potential owner to come in

There's no time frame as such as I understand it. According to Kieran Maquire, the decision to go into liquidation would only be taken if more money could be raised for the creditors from breaking up the clubs assets and selling them off individually than it could from selling the club as a going concern. That's in our favour but it all hinges on finding new owners who are prepared to settle the club's debts.

[DCFC1388]

Seems to me like Mel put us on the road to administration the moment he only wanted new owners to pay the debts off, which is pretty much what fans were asking him to do in terms of selling for a £1, he was getting £0 from the deal itself.

New owners are always going to want us to go into admin and have less debts to pay if that is all they were going to pay for anyway, so it makes sense what Mel says where he expects previous interested parties to come back in.

Yes we are likely to go down now but most thought that anyway this year & majority of last year, so the new owners would probably think the same so they will know we are down but with less overall debt to pay.