Derby finally accept 21 point deduction.

[Tamworthram]

19 minutes ago, desirelines said:

Will we hear from Mel any time soon I wonder? I'd love to know what he's thinking now he's the most hated man in Derby

I very much doubt it.

There’s nothing he can say or do to put things right (apart from write off any loans and gift the stadium back. As if either of those are going to happen) and if he tries to defend himself he’s only likely to make himself even less popular unless he has some bombshell revelation.

It’s probably better for all concerned (the club, the fans and Mel himself) if he keeps a low profile and we all move on rather than keep reminding ourselves (and him) that he was primarily responsible.

I don’t really want to hear from him, I just want him to do the best he can for the club in terms of the stadium.

[Gee SCREAMER !!]

Without reading through the whole thing .  I've heard an overspend of huge amounts in 18/19 . As we brought in 11 million for Vydra, at least 2 million for the playoffs and over 7 million for flogging our bookended management team, I'm struggling with that one.  Does any of this penalty include accounts from 19/20  or 20/21.  If so, with figures being bandied about by other clubs, we definitely rolled over. 

Either way we can thank Captain Mel for admin.  The other 12 is the killer.

[BramcoteRam84]

Well some big revelations today. Notably the losses were considerably more than we had been led to believe and upon restating the accounts in line with the way the EFL want them doing (not going to say rules as there’s still nothing in the rule book to say it should be straight-line) and the rest of the league comply with we incurred multiple points breaches in excess of the 9 we’ve been given. In other words we’ve got off lightly it could’ve been worse, not that it really makes any difference now. 
 

Are the EFL vindicated? Absolutely not. Doesn’t change the fact they’ve allowed a competition that is grossly unfair with parachute payments and allowing bigger losses for those clubs, brought in P&S rules that are vague in some parts, complex in others and don’t really protect the integrity of the league, they don’t punish clubs who are promoted, they allow the additional dodgy practices of Wolves’ Mendes deal and use of loan system and deferring payments to essentially make top half premier league signings, they allow the dodgy practices of Watford and Forest who move players between clubs to dodge FFP. The way they have singled out Derby is a gross hypocrisy, entirely political, vindictive and is in no way about protecting the integrity of the league. If it was they’d be finding ways to go after Wolves Leicester Leeds, they’d have punished Bournemouth again upon relegation, they’d be stopping Forest’s loophole of moving players between clubs and they would be clamping down on Stoke’s dodgy practices around Covid. They are not. They are a joke of an organisation, odious to the core, and an independent regulator is badly needed.

However the EFL is not in any way to blame for our predicament, that honour falls to one man. If he’d stuck around then we might have forgiven him an FFP breach but he plunged us into administration as well and said it was in the best interests of the club. Given what has gone on, given the FFP deal the EFL put on the table to Mel is effectively the one we have now, I can see no benefit to administration other than Mel didn’t want to fund the losses any more caused by his crippling mismanagement and exacerbated by Covid, this when losses now are a great deal smaller than earlier in his stewardship. We are in this because of Mel and Stephen Pearce and no one else. 

We need to take our medicine and rebuild. The critical thing is we get a new owner by Jan as if not we could face a January that will set us back years. Get an owner in, we might be able to bounce back quickly. 
 

Final point on the EFL, will they relinquish the highly restrictive embargo should we get new owners willing to stand behind us? I get retaining it while we’re still in admin but to continue it post takeover is unnecessarily draconian and vindictive. And also, they cited a breach of the 19/20 and 20/21 merged P&S period in the judgement, so will points deductions apply when about half the league fail this accounting period? How can they not with wage bills significantly larger than ours and significant reduced revenue through Covid. 
 

The one positive is our costs are now under much better control, with a buyer, a ground (the last decent thing you can do Mel) and retaining our academy status then we will be in an excellent place to rebuild. But we need that buyer and quickly!!

[Mihangel]

9 minutes ago, Red Ram said:

According to Kieran Maquire, amortisation isn't mean to reflect residual value so I'm not sure it would be all that relevant.

Words 3 and 4 of your post help us to move on, you can ignore the clueless teacher...

[AndyinLiverpool]

47 minutes ago, PistoldPete said:

But we knew this. And  if we  broke  FFP before January 2020 why didn't EFL charge us for breach of 2018-19?  

The account weren't submitted, were they?

[Hordh]

26 minutes ago, i-Ram said:

The 2018/19 accounts have never been submitted Pete. That is part of the reason we have been under embargo for 2 years. Mel needed to pay c£95m for the stadium or possibly more to have got round it. Or he could have sold Johnson/Butterfield/Anya/Blackman and Nugent at a bargain £15m job lot ?

 

[Ghost of Clough]

Finally a bit of time to look at the figures.

3 years to 2017
My prediction: £8.63m overspend
Actual = £7.76m overspend

This would 'reset' 15/16 and 16/17 figures.

3 years to 2018
Using adjusted figures for 15/16 and 16/17;
My prediction: £12.43m underspend
Actual = £10.88m underspend

No further adjustments required as we were within limits.

3 years to 2019
Using adjusted figures for 16/17;
My prediction: £3.78m overspend
Actual = £11.72m overspend

This would 'reset' the ginormous £37m P&S loss in 18/19!!! (my estimate)

3 years to 2020
Using adjusted figures for 18/19;
My prediction: £2.35m underspend
Actual = Unknown - not referenced so will be within the limit.

4 years to 2021
Using adjusted figures for 18/19;
My prediction: £6.00m underspend
Actual = £1.96m overspend

19/20 will definitely be 'reset', 20/21 will be borderline - worst case is this being reset too.

 

What this actually means

1. For 21/22, we only need to avoid P&S losses exceeding £13m.
2. I either overestimated how much the wage bill has come down (estimated currently at £20m) or how much we have actually paid for players (estimated at values similar to Transfermarkt)

[Ghost of Clough]

13 minutes ago, BramcoteRam84 said:

Notably the losses were considerably more than we had been led to believe

In all seriousness, my estimates were only out by an average of £2.3m per season. Is that "considerably more"?

[SBW]

1 hour ago, PistoldPete said:

The IDC ruled that we did not act in bad faith. Just made an honest error. And in fact the IDC had previously said it wasnt even an error it was compliant apart from the description in the accounts being a bit sloppy, for which on its own no punishment was even considered.

That is just one of the elements.  What about not paying HMRC. Not paying wages, not pay clubs owed transfer fees, not submitting accounts, Morris admitting any resubmitted accounts would breach FFP?

 

C'mon mate, it's poo.  We all know it is.  It's going to take some healing, but we aren't being unfairly punished.  We pushed hard for promotion, too hard and as a result the club acted in very bad faith.  I'd say the accepting on penalties shows the Admin team recognised we also breached rules.

 

 

[europia]

47 minutes ago, Pearl Ram said:

Would you really like to hear anything from him ? Don’t get me wrong, if you did, that’s fine, but myself...if he told me it was raining I’d go outside and see if I got wet.

Exactly. I couldn't stomach listening to the interview he did with Dawes on Radio Derby. If you've put your (beloved?) local football club into administration for the vultures to scrap over.... really, what is there to be said?? 

[BramcoteRam84]

Just now, Ghost of Clough said:

In all seriousness, my estimates were only out by an average of £2.3m per season. Is that "considerably more"?

In terms of the P&S breaches yes as it’s all about the phasing. I watch your updates with interest as probably the best authority on here when it comes to the P&S figures. We were debating no points deduction or about 4 points at worst and what Mel said to RD in September seemed to back that up. The P&S breaches shown today indicate the EFL could have hit us for more than the 9 they have.

In the grand scheme of things is it the massive breach it’s been made out to be by the EFL, the media, and fans of rival clubs - absolutely not but that’s where the rules are not fit for purpose. But against their rules applying amortisation in the way they want to apply it they’ve got us bang to rights whether we think it’s fair or not.

Im genuinely intrigued though to see how they treat clubs on the accounts for the Covid years because surely half the league will fail. 

[Ghost of Clough]

1 minute ago, BramcoteRam84 said:

In terms of the P&S breaches yes as it’s all about the phasing. I watch your updates with interest as probably the best authority on here when it comes to the P&S figures. We were debating no points deduction or about 4 points at worst and what Mel said to RD in September seemed to back that up. The P&S breaches shown today indicate the EFL could have hit us for more than the 9 they have.

In the grand scheme of things is it the massive breach it’s been made out to be by the EFL, the media, and fans of rival clubs - absolutely not but that’s where the rules are not fit for purpose. But against their rules applying amortisation in the way they want to apply it they’ve got us bang to rights whether we think it’s fair or not.

Im genuinely intrigued though to see how they treat clubs on the accounts for the Covid years because surely half the league will fail. 

I believe if we had gone to IDC we would have got a much better outcome - not least, taking into account not having the time to take action after the first failure to reduce losses before failing further periods.

The 4 points comment by Mel is an odd one now we see the actual figures. I swear he said that was in relation to the 3 years to 2018... a period we were within the limits ?

[CBRammette]

3 minutes ago, BramcoteRam84 said:

Well some big revelations today. Notably the losses were considerably more than we had been led to believe and upon restating the accounts in line with the way the EFL want them doing (not going to say rules as there’s still nothing in the rule book to say it should be straight-line) and the rest of the league comply with we incurred multiple points breaches in excess of the 9 we’ve been given. In other words we’ve got off lightly it could’ve been worse, not that it really makes any difference now. 
 

Are the EFL vindicated? Absolutely not. Doesn’t change the fact they’ve allowed a competition that is grossly unfair with parachute payments and allowing bigger losses for those clubs, brought in P&S rules that are vague in some parts, complex in others and don’t really protect the integrity of the league, they don’t punish clubs who are promoted, they allow the additional dodgy practices of Wolves’ Mendes deal and use of loan system and deferring payments to essentially make top half premier league signings, they allow the dodgy practices of Watford and Forest who move players between clubs to dodge FFP. The way they have singled out Derby is a gross hypocrisy, entirely political, vindictive and is in no way about protecting the integrity of the league. If it was they’d be finding ways to go after Wolves Leicester Leeds, they’d have punished Bournemouth again upon relegation, they’d be stopping Forest’s loophole of moving players between clubs and they would be clamping down on Stoke’s dodgy practices around Covid. They are not. They are a joke of an organisation, odious to the core, and an independent regulator is badly needed.

However the EFL is not in any way to blame for our predicament, that honour falls to one man. If he’d stuck around then we might have forgiven him an FFP breach but he plunged us into administration as well and said it was in the best interests of the club. Given what has gone on, given the FFP deal the EFL put on the table to Mel is effectively the one we have now, I can see no benefit to administration other than Mel didn’t want to fund the losses any more caused by his crippling mismanagement and exacerbated by Covid, this when losses now are a great deal smaller than earlier in his stewardship. We are in this because of Mel and Stephen Pearce and no one else. 

We need to take our medicine and rebuild. The critical thing is we get a new owner by Jan as if not we could face a January that will set us back years. Get an owner in, we might be able to bounce back quickly. 
 

Final point on the EFL, will they relinquish the highly restrictive embargo should we get new owners willing to stand behind us? I get retaining it while we’re still in admin but to continue it post takeover is unnecessarily draconian and vindictive. And also, they cited a breach of the 19/20 and 20/21 merged P&S period in the judgement, so will points deductions apply when about half the league fail this accounting period? How can they not with wage bills significantly larger than ours and significant reduced revenue through Covid. 
 

The one positive is our costs are now under much better control, with a buyer, a ground (the last decent thing you can do Mel) and retaining our academy status then we will be in an excellent place to rebuild. But we need that buyer and quickly!!

Good summary. Out of all of it I get some of the embargo restrictions going forward as it would be galling to local creditor businesses who may lose a lot of money if out of brief admin in January we then pay transfer fees or sign someone on big wages. However what really stinks is how harshly we have been dealt throughout for a protracted period just because we didnt get promoted compared to those who similarly stretched the rules or broke FFP but went up, earned the riches for a while and have come down with no meaningful sanction. But we seem to have been punished many times such that we were broken without a points deduction.  If you are doing FFP then it must be applied to all the same. The championship used to be such an exciting league, better than the premiership in terms of competitiveness but as premiership riches have increased as have parachute payments that competitiveness has sadly gone.  It will only get sorted when they dont get as much for the next TV deal and it hits the coffers

[vonwright]

3 minutes ago, BramcoteRam84 said:

In terms of the P&S breaches yes as it’s all about the phasing. I watch your updates with interest as probably the best authority on here when it comes to the P&S figures. We were debating no points deduction or about 4 points at worst and what Mel said to RD in September seemed to back that up. The P&S breaches shown today indicate the EFL could have hit us for more than the 9 they have.

In the grand scheme of things is it the massive breach it’s been made out to be by the EFL, the media, and fans of rival clubs - absolutely not but that’s where the rules are not fit for purpose. But against their rules applying amortisation in the way they want to apply it they’ve got us bang to rights whether we think it’s fair or not.

Im genuinely intrigued though to see how they treat clubs on the accounts for the Covid years because surely half the league will fail. 

Also - if we are honest - the scale of losses under a straight-line amortisation policy lays bare the underlying financial situation fairly well. Our policy was based on back-ending losses and essentially pretending worthless players were worth something. Huge losses were only partially offset by a 'generous' stadium sale. The whole pattern is one of overspending compounded by overspending, dodging the final reckoning for as long as possible. And then the final dodge was to put the club in administration and leave the mess for someone else to clean up. I'm trying to work out what the plan was if we hadn't been pulled up on our amortisation and I'm struggling. 

[JfR]

10 minutes ago, SBW said:

That is just one of the elements.  What about not paying HMRC. Not paying wages, not pay clubs owed transfer fees, not submitting accounts, Morris admitting any resubmitted accounts would breach FFP?

 

C'mon mate, it's poo.  We all know it is.  It's going to take some healing, but we aren't being unfairly punished.  We pushed hard for promotion, too hard and as a result the club acted in very bad faith.  I'd say the accepting on penalties shows the Admin team recognised we also breached rules.

 

 

HMRC, transfer fees and non-submission of accounts were/are being punished with embargos
Not paying wages was punished with a separate suspended 3 point deduction

[EtoileSportiveDeDerby]

2 hours ago, Rev said:

I'm not sure £8m a month is correct?

Wasn't it £8m a week?

Cant be thats over 400m a year. Even 8m is on the high side at 96m a year.

[Tyler Durden]

19 minutes ago, vonwright said:

Also - if we are honest - the scale of losses under a straight-line amortisation policy lays bare the underlying financial situation fairly well. Our policy was based on back-ending losses and essentially pretending worthless players were worth something. Huge losses were only partially offset by a 'generous' stadium sale. The whole pattern is one of overspending compounded by overspending, dodging the final reckoning for as long as possible. And then the final dodge was to put the club in administration and leave the mess for someone else to clean up. I'm trying to work out what the plan was if we hadn't been pulled up on our amortisation and I'm struggling. 

 

[vonwright]

6 minutes ago, Tyler Durden said:

 

I should also say - as someone who has been pretty vocal in attributing a fair bit of blame to our previous owners - I don't think the EFL has covered itself in glory. The whole system stinks: football basically doesn't work, financially, outside the Premiership. There's a complete disconnect between the Prem and the rest of football. And rather than any kind of benevolent independent oversight the whole thing seems to be run on the basis of 'Yeah we all know it doesn't really work, but just don't take the **** and we will pretend it's all fine and functional'. At best the EFL is curbing the worst excesses while turning a blind eye to the underlying issues. We messed up, I can't really defend the way we were run - but it's not like we were one bad apple in an otherwise perfectly healthy batch. 

Edited November 16, 2021 by vonwright

[San Fran Van Rams]

I haven't read the latest in this thread as frankly I don't have the time or inclination. The whole process has been an absolute farce - a witch hunt against an owner; a wider agenda in an attempt to force change up the pyramid; and a corrupt system which bows to those who shout the loudest.

The biggest issue in those whole debacle is that there is an assumption that the LAP made the correct decision about our amortization policy's non-compliance with FRS102. My understanding is that even though the original DC (which included the relevant experts) found the policy to be in compliance (apart from poor disclosure), the LAP then decided to uphold the original particulars even though the LAP had no accounting expertise on it. 

The second biggest issue is that EFL have used the club's financial plight to have it agree to the punishment. The EFL knew full well that we were unable to let the sanctions/appeals decision slip given the existing funding and limited cashflow and the inability to sell the club without that decision agreed upon. The EFL forced us to agree to the decision or face liquidation. To me, this is forcing a false confession and is completely unjust and unfair. 

The third biggest issue is that we have been repeatedly punished for the same perceived mis-demeanor which I'm still yet to see full evidence that we're guilt of - non-compliance with FRS 102. Putting the compliance matter to one side, we've been punished through a strict transfer embargo, an inability to utilize a league wide loan and now a points deduction. The overall points deduction is also a repeated sanction for the same alleged crime given we would have changed our approach and our decisions if we were to know we couldn't use it. (To note, indirectly we've also been punished with administration as the whole EFL debacle forced buyers to pull out a potential acquisition that would have prevented this from happening).

Finally, the fourth biggest issue is that throughout this whole process, Derby's name has been dragged through the mud. Whether its from the EFLs shockingly worded statements, leaks to the national press, or miss/over simplified reporting by the press, Derby County is now a dirty word amongst many a fan - I do not care that we are not liked. I care that we are not liked because of false accusations and an agenda from our governing body which is meant to protect our club and the game we love.

As I've said before, I do not admonish MM of any responsibility. His financial mis-management of Derby is shocking and he should be condemned as one of, if not the, worst owners in our history and the fact he decided to walked away from the steaming pile of poo he created says a lot about the man.

The EFL, however, has done nothing but further punish and cripple the club and is as worthy of as much criticism as our esteemed previous owner. It is an unfit and unjust governance body that needs dismantling and building from the floor up again. 

Edited November 16, 2021 by San Fran Van Rams
typos

[Red Ram]

1 hour ago, ShoreRam said:

Words 3 and 4 of your post help us to move on, you can ignore the clueless teacher...

Yeah what does a Professor of football finance who writes the exams on amortisation used in accountancy exams across the country know about it?