The Price of Football Podcast - Derby County in Administration

[RoyMac5]

1 minute ago, Taribo said:

…..speak for yourself 

Yeah, no problem. I don't pretend to know everything unlike some.

[The Baron]

3 hours ago, Charlotte Ram said:

I listen also to their twice weekly podcast as it is good listening on my commute into work, however they are obsessed with the rams and slag them off at every opportunity which is annoying, they also laugh at their own jokes which is doubly annoying.

I will listen tonight on my way home but don't expect any great revelations from him.

We honestly are not obsessed with Derby and have said on many occasions (a) We hope to have no need to discuss the club again and (b) not keen with behaviour of owners results in punishment for fans via points deductions.
 

The reason why the club has appeared on the show is a combination of EFL Charges, Keough sacking claim, refusal to publish accounts, amortisation, failure to pay wages on time, FFP, collapsed sale deals and administration.
 

If none of those had arisen then the club would not have had a mention. 

As for laughing at our own jokes, I laugh at Kevin’s because I think he’s very funny. 

[duncanjwitham]

2 hours ago, BramcoteRam84 said:

when Jim Wheeler pressed him on Mel’s defence of the amortisation policy he shot it down quickly, amortisation isn’t meant to be a reflection of value. It isn’t perfect but it’s consistent. Using transfermarkt to value players is as reliable as using Wikipedia as a source!!

Mel’s explanation of what we’re doing was pretty terrible. He either didn’t understand it properly himself, or he was massively oversimplifying beyond the point of being useful.  The key thing is (as far as I understand it), we’re not really saying the players value drops most in the last season, we’re saying our ability to sell them does.  A subtle distinction maybe, but it makes all the difference - under FRS102, we’re losing the ability to profit from the disposal of that asset so it gets amortised away.

And it doesn’t matter what KM thinks about the accuracy of transfermarkt, the Disciplinary Commission found that our method of valuing the players was reliable and systematic enough for the purposes of FRS102, and the League Appeal Panel found in our favour for all of the EFLs appeals in that regard. Not to mention our accountants, auditors etc signing off on it.  

We weren’t just relying on one website either, we were apparently getting valuations from multiple agents and multiple websites, to try and come up with an independent valuation, I.e not one that we were tweaking to fit our needs. And honestly, is it *that* different to valuing property by getting estate agents to value it and cross-checking similar properties on Zoopla etc?

(usual caveats about whether we were actually doing what we claimed to be doing etc)

[Crewton]

5 minutes ago, The Baron said:

We honestly are not obsessed with Derby and have said on many occasions (a) We hope to have no need to discuss the club again and (b) not keen with behaviour of owners results in punishment for fans via points deductions.
 

The reason why the club has appeared on the show is a combination of EFL Charges, Keough sacking claim, refusal to publish accounts, amortisation, failure to pay wages on time, FFP, collapsed sale deals and administration.
 

If none of those had arisen then the club would not have had a mention. 

As for laughing at our own jokes, I laugh at Kevin’s because I think he’s very funny. 

To be fair, you did write a very good demolition job on QPR's FFP behaviour. Unfortunately, Steve Gibson didn't read it and Rob Couhig wasn't our owner at the time. 

[DCFC27]

9 hours ago, kevinhectoring said:

The main problem with Maguire’s ‘I thought Mel was better than that’ is that he’s not listened to what MM said yesterday. Or understood what’s going on
 

Here it is (not direct quotes)

“I can’t sell whilst the EFl is on my back

“The EFL aren’t resolving this. They are dragging their feet and it seems they will continue to do that so long as I am owner. “
 
In other words, the anti MM vote on the EFl board is forcing MM to pour money into the club whilst they reduce the value of the club by delaying resolution. 
 

Ok Mel is largely the unlucky author of his own misfortune. But Kieron, you foolish man, it’s not surprising he’s pulled the plug 

He authorised the contracts and created the budgets. The EFL didn’t help but Mel still has his fortune and just won’t pay.

[GenBr]

6 minutes ago, DCFC27 said:

He authorised the contracts and created the budgets. The EFL didn’t help but Mel still has his fortune and just won’t pay.

Playing devils advocate here, but how do you know he still has his fortune?

[Crewton]

I mean, where was the clamour from the football world for QPR, Leicester, Bournemouth, Watford, Wolves and Villa to be put out of business for their obvious disdain for FFP, legal threats to the EFL in the cases of QPR and Bournemouth, and dodging schemes so blatantly crooked that even the Blind Boys of Alabama could have see through them? 

Got a fine? No problem! Pay it using a fraction of your ill-gotten PL gains. ?

[DCFC27]

2 minutes ago, GenBr said:

Playing devils advocate here, but how do you know he still has his fortune?

Reports today, he’s done well in his other investments. Not overly  accurate but according to the Sunday times he’s worth £515m. Even if he’s worth half of that he can more than afford to keep the club running. Even if he’s worth £100m he’d still be one of the richest owners in the championship.

[Ghost of Clough]

4 minutes ago, DCFC27 said:

Reports today, he’s done well in his other investments. Not overly  accurate but according to the Sunday times he’s worth £515m. Even if he’s worth half of that he can more than afford to keep the club running. Even if he’s worth £100m he’d still be one of the richest owners in the championship.

That's like saying someone who owns a house should be willing to invest £100k towards something... when they haven't even got the cash to buy a new washing machine.

Whatever he's worth, £80m of that is the stadium.

[Gringo]

37 minutes ago, The Baron said:

We honestly are not obsessed with Derby and have said on many occasions (a) We hope to have no need to discuss the club again and (b) not keen with behaviour of owners results in punishment for fans via points deductions.
 

The reason why the club has appeared on the show is a combination of EFL Charges, Keough sacking claim, refusal to publish accounts, amortisation, failure to pay wages on time, FFP, collapsed sale deals and administration.
 

If none of those had arisen then the club would not have had a mention. 

As for laughing at our own jokes, I laugh at Kevin’s because I think he’s very funny. 

Hello Kieran

[Ramos]

41 minutes ago, The Baron said:

We honestly are not obsessed with Derby and have said on many occasions (a) We hope to have no need to discuss the club again and (b) not keen with behaviour of owners results in punishment for fans via points deductions.
 

The reason why the club has appeared on the show is a combination of EFL Charges, Keough sacking claim, refusal to publish accounts, amortisation, failure to pay wages on time, FFP, collapsed sale deals and administration.
 

If none of those had arisen then the club would not have had a mention. 

As for laughing at our own jokes, I laugh at Kevin’s because I think he’s very funny. 
 

Don’t suppose you could do us a favour and as best you can explain the administration process? I was hoping Mel was going to at least address it yesterday during his interview but he did nothing to explain what happens next or to even reassure Derby fans there will still be a Derby county at the end of this. I know that’s not a straightforward question. 

[DCFC27]

11 minutes ago, Ghost of Clough said:

That's like saying someone who owns a house should be willing to invest £100k towards something... when they haven't even got the cash to buy a new washing machine.

Whatever he's worth, £80m of that is the stadium.

I don’t think it is. His house isn’t worth £515m fella, It’s a nice house in Turnditch, excavated underneath with millions of pounds worth of cars. But even if we take them into account it’s not worth that. 
 

He would need to cash in some of his other investments, but so he should. 

[uttoxram75]

Not listened to this bamfords podcast so can't comment but I do know he has worked tirelessly on twitter to take Derby down and fuelled the anti-Derby feelings that have driven the EFL's drawn out tactics to find summat to punish us with.

Lets be in no doubt, the EFL thought we'd broken the rules with the stadium sale and faced external pressure to punish us when it was proven to be within the EFL regs.

 

[The Baron]

25 minutes ago, Ramos said:

Don’t suppose you could do us a favour and as best you can explain the administration process? I was hoping Mel was going to at least address it yesterday during his interview but he did nothing to explain what happens next or to even reassure Derby fans there will still be a Derby county at the end of this. I know that’s not a straightforward question. 

The administrators will initially try to put together an inventory of assets that they can potentially sell, as well as write to all known creditors advising them that the complany(ies) is in administration, and that all current sums payable are frozen until the administration ceases. Once they know what they have to sell, they will advertise the club for sale although are likely to be inundated with idiots and tyrekickers as well as legitimate buyers. Often they will ask for a deposit for exclusive rights to inspect the books from potential new owners. 

They will ask for a statement of affairs from management, this is a summary of the most recent management accounts and identify which, if any costs can be cut. There are likely to be redundancies as a result. 

They will also ask suppliers to sign new contracts with the administrators and guarantee payment for all future purchases during the course of the admin procedure. 

The most critical issue in the short term is that of finding funding. The wages have to be paid in September, and this will be challenging as it is a seven figure sum, with relatively few assets (property assets appear to be owned by Gellaw, which is not in administration) although there will be the residue of the season ticket money received pre appointment. In addition the administrators will estimate their fees, in the case of Wigan they were over £1.6m plus a one-third uplift upon completion of a successful sale, plus legal and other costs on a few hundred thousand. 

In the case of Wigan, the most recent football administration, things were easier because the club had property assets (it had two training grounds, one of which was sold to Preston for £1.5m) as well as plenty of players to sell (this generated £10m) as the admin took place in the summer during the transfer window. Derby's administrators have a disadvantage in both of these issues. 

Once Derby is sold the new owners will have to trade under a business plan agreed with the EFL, and a combination of the liquidators of the OldCo and the new owners need to pay all of the preferred creditors and a dividend of 25% of the unsecured creditors within two years or face a further 15 point penalty. 

Again here Derby's position is more challenging than that of Wigan, where (a) the club owner wrote off the debts due to him (b) Wigan had property assets to sell to the new club owners and (c) I think that HMRC were still unsecured creditors in 2020, so were only entitled to 25% of a much lower figure than the estimated (figure given on the podcast by RamsTrust) £26m owing to the tax authorities. The football creditors figure may be higher than in the case of Wigan too, though whether there are still monies owing to Keogh and whether they are deemed to be football or unsecured creditors is uncertain. 

Edited September 20, 2021 by The Baron

[Ramos]

3 minutes ago, The Baron said:

The administrators will initially try to put together an inventory of assets that they can potentially sell, as well as write to all known creditors advising them that the complany(ies) is in administration, and that all current sums payable are frozen until the administration ceases. 

They will ask for a statement of affairs from management, this is a summary of the most recent management accounts and identify which, if any costs can be cut. There are likely to be redundancies as a result. 

They will also ask suppliers to sign new contracts with the administrators and guarantee payment for all future purchases during the course of the admin procedure. 

The most critical issue in the short term is that of finding funding. The wages have to be paid in September, and this will be challenging as it is a seven figure sum, with relatively few assets (property assets appear to be owned by Gellaw, which is not in administration) although there will be the residue of the season ticket money received pre appointment. In addition the administrators will estimate their fees, in the case of Wigan they were over £1.6m plus a one-third uplift upon completion of a successful sale, plus legal and other costs on a few hundred thousand. 

In the case of Wigan, the most recent football administration, things were easier because the club had property assets (it had two training grounds, one of which was sold to Preston for £1.5m) as well as plenty of players to sell (this generated £10m) as the admin took place in the summer during the transfer window. Derby's administrators have a disadvantage in both of these issues. 

Once Derby is sold the new owners will have to trade under a business plan agreed with the EFL, and a combination of the liquidators of the OldCo and the new owners need to pay all of the preferred creditors and a dividend of 25% of the unsecured creditors within two years or face a further 15 point penalty. 

Again here Derby's position is more challenging than that of Wigan, where (a) the club owner wrote off the debts due to him (b) Wigan had property assets to sell to the new club owners and (c) I think that HMRC were still unsecured creditors in 2020, so were only entitled to 25% of a much lower figure than the estimated (figure given on the podcast by RamsTrust) £26m owing to the tax authorities. The football creditors figure may be higher than in the case of Wigan too, though whether there are still monies owing to Keogh and whether they are deemed to be football or unsecured creditors is uncertain. 

Thanks for explaining - really appreciated. I’m still struggling to understand why at this point, Mel has decided to put the club (or at least imply the intention) in admin. As you say there’s no transfer window to even raise funds from player sales, from the very little squad we have. The picture just looks completely bleak. 

[RadioactiveWaste]

5 minutes ago, The Baron said:

The administrators will initially try to put together an inventory of assets that they can potentially sell, as well as write to all known creditors advising them that the complany(ies) is in administration, and that all current sums payable are frozen until the administration ceases. 

They will ask for a statement of affairs from management, this is a summary of the most recent management accounts and identify which, if any costs can be cut. There are likely to be redundancies as a result. 

They will also ask suppliers to sign new contracts with the administrators and guarantee payment for all future purchases during the course of the admin procedure. 

The most critical issue in the short term is that of finding funding. The wages have to be paid in September, and this will be challenging as it is a seven figure sum, with relatively few assets (property assets appear to be owned by Gellaw, which is not in administration) although there will be the residue of the season ticket money received pre appointment. In addition the administrators will estimate their fees, in the case of Wigan they were over £1.6m plus a one-third uplift upon completion of a successful sale, plus legal and other costs on a few hundred thousand. 

In the case of Wigan, the most recent football administration, things were easier because the club had property assets (it had two training grounds, one of which was sold to Preston for £1.5m) as well as plenty of players to sell (this generated £10m) as the admin took place in the summer during the transfer window. Derby's administrators have a disadvantage in both of these issues. 

Once Derby is sold the new owners will have to trade under a business plan agreed with the EFL, and a combination of the liquidators of the OldCo and the new owners need to pay all of the preferred creditors and a dividend of 25% of the unsecured creditors within two years or face a further 15 point penalty. 

Again here Derby's position is more challenging than that of Wigan, where (a) the club owner wrote off the debts due to him (b) Wigan had property assets to sell to the new club owners and (c) I think that HMRC were still unsecured creditors in 2020, so were only entitled to 25% of a much lower figure than the estimated (figure given on the podcast by RamsTrust) £26m owing to the tax authorities. The football creditors figure may be higher than in the case of Wigan too, though whether there are still monies owing to Keogh and whether they are deemed to be football or unsecured creditors is uncertain. 

Quick one - during the period of administration, is the going concern aspect as precarious as any kind of default on any kind of payment means liquidation, or is there flexibility (or flexibility at creditors discression)?

[May Contain Nuts]

1 hour ago, Crewton said:

I mean, where was the clamour from the football world for QPR, Leicester, Bournemouth, Watford, Wolves and Villa to be put out of business for their obvious disdain for FFP, legal threats to the EFL in the cases of QPR and Bournemouth, and dodging schemes so blatantly crooked that even the Blind Boys of Alabama could have see through them? 

Got a fine? No problem! Pay it using a fraction of your ill-gotten PL gains. ?

 

No two-bit self important james blunt decided to go running to the EFL to grass them up until it was too late to do anything?

Edited September 20, 2021 by Coconut's Beard

[The Baron]

19 minutes ago, RadioactiveWaste said:

Quick one - during the period of administration, is the going concern aspect as precarious as any kind of default on any kind of payment means liquidation, or is there flexibility (or flexibility at creditors discression)?

No, the purpose of administration is to protect the company from the threat of liquidation, however, if the administrators cannot arrange funding then there could be a problem as they would have to stop trading. Either the administrators will take the view they have enough cash/assets to pay costs during the administration, or another party could provide some funding. 

[kevinhectoring]

1 hour ago, DCFC27 said:

He authorised the contracts and created the budgets. The EFL didn’t help but Mel still has his fortune and just won’t pay.

By the time this all ends he will have put,  what,  £250 million into our club. Criticise the mistakes if you want. But where does it come from, your bizarre notion that because he bought the club he is indentured to put every last penny into it ? It’s just a weird proposition 

[Gee SCREAMER !!]

5 minutes ago, kevinhectoring said:

By the time this all ends he will have put,  what,  £250 million into our club. Criticise the mistakes if you want. But where does it come from, your bizarre notion that because he bought the club he is indentured to put every last penny into it ? It’s just a weird proposition 

No, just enough to pay the tax bill and the loans he took on so we can have a ground to play in. He can sell the ground back to a new investor at 4 million a year for the next 15 years if he likes.  Or he can look for someone to pay his bills, not get it and be the man who destroyed a founder member of the football league.  If the club didn't have debt to carry it would have been sold 12 months ago.  EFL or not. Probably to a decent investor as well, rather than 50p millionaires who have come and gone.