Derby finally accept 21 point deduction.

[PistoldPete]

36 minutes ago, G STAR RAM said:

Having been subject to reviews on my audit files in the past, I can assure you that they go through everythint with a fine tooth comb.

If youre suggesting that they would have not even looked at one of the biggest figures in the accounts I would suggest that you are mistaken, although this is just my opinion. 

Can you please advise what 'further evidence' was made available to the LAP that was not available to the IDC?

There was none.. in fAct The  LAP  only ruled on a matter of law , not on the facts of the case. They did not cross examine anyone or have any extra evidence.  Proper remedy should have been to refer back to the IDC which had an accountant on it.

[DCFC1388]

I know some are saying to ignore the business plan & sign players ready for next season & take any punishment this season as we're down already but that is impssible to do.

The EFL have to sign off all deals dont they so they just wouldnt sign it off if we did try & do the above, same way they didnt sign off on Marriotts contract renewal

[Hordh]

Good to get this out of the way, although the club are still not out of the woods yet what with the business plans and having to obtain a CVA that will satisfy the EFL. The person to blame for this is Morris who attempted to cheat the system. The irony that PP looks like being part of a deal at way less than the 'valuation' can't be lost either and goes to show the club dodged further punishment over that deal! 

[SBW]

Glad it's finally over - well at least this part of it.  God knows what happens beyond this season?

Been a long-time lurker, but felt compelled to join the other day.

 

I think we all need to try move on, I don't think there's anything healthy about seeking to have jabs at the EFL.  The state of the accounts... etc will probably forever remain unknown now.  But I think we (the club I should say, not fans as apart from enjoying the ambition/spending, there's no responsibility re: this outcome) need to take it on the chin.  There clearly has been some wrongdoings.  Not paying HMRC, not producing the accounts for years and the issues around amortisation and the stadium sale, whether it breaks rules or not, it was all very immoral and I hope as a club that's something that can be addressed in the future.

 

Maybe it's just me, being old and sentimental, I want to support a club that is all above board, acts with morality and takes the higher ground.  I am sure the EFL could have handled it very differently, I think the way the club (or maybe Mel?) acted throughout this put their nose out of joint and any sense of goodwill went out the window a long time ago.  Is that right or not? who knows, but I think everyone just needs to accept it has happened now.

 

Get behind the lads, there is clearly a lack of quality in the squad, it's evident.  But they are trying and I think all considered, we have to respect that.  Now is an opportunity for those who want to be around next season to get some games, prove their worth and get some exposure.  

[Yani P]

The EFL will probably ensure our Admin business plan is as crippling as possible just to add another layer to the punishment.

[G STAR RAM]

6 minutes ago, PistoldPete said:

There was none.. in fAct The  LAP  only ruled on a matter of law , not on the facts of the case. They did not cross examine anyone or have any extra evidence.  Proper remedy should have been to refer back to the IDC which had an accountant on it.

Not according to @Chris_D

[bimmerman]

Meh..at least it's not liquidation and we have a club to support, could always be worse

[i-Ram]

23 hours ago, 86 Hair Islands said:

And by your metrics, a £21.5 million disadvantage in the final years of the respective players' contracts. ERV and straight line amortisation policies have two salient similarities; they start and end with the same sums, so net depreciation figures for the two methods are identical. Our methodology was accepted by the EFL for the three years in question and independently audited and approved by Derby's auditors, the IDC and the The Institute of Chartered Accountants in England and Wales (ICAEW). That's three independent and fully qualified bodies versus the the appeal board which was appointed by the EFL and contained not one accounting professional and whose decision remains unratified, yet cannot be appealed. 

Against this background, the club has spent most of the last two years under embargo and now finds itself shorn of senior squad members, unable to develop youth acquisitions and facing the additional punishment of a points deduction approaching 3 times that of Reading who made operating losses of £43.5million in the 2019/20 season, with accumulated losses totalling £138million. Their last overall wage bill was £37.6m with wages running at 211 per cent of revenue compared with 226 per cent the previous year. More frustrating still is the fact that Reading are able to appeal their 9 point sanction via an independent panel. 

With all this in mind, can you explain why you take issue with folk suggesting there is something of a witch-hunt in process because for the life of me, it's hard to see anything even-handed about the EFL's behaviour at any point throughout the process. Folk are not expecting any kind of special dispensation after all, only a fair trial which I'd venture is far from unreasonable.

What is all that Reading stuff? You have always seemed steadfastly against Whataboutery. Let’s just concentrate on The Rams shall we.

To me, but I might be just old school, it does matter that we wanted to adopt an amortisation policy completely different to all other clubs in the league that we were competing against (in fact we were the only one applying a different policy amongst a membership group of 72). If we wanted to adopt such a policy we should have been more transparent and got the policy formally approved. Otherwise it is, to me at least, no more than wanting to seek some advantage.

I am sorry I will not be swayed from my view, which is very long standing on this board, that Morris and Pearce were trying to gain some spending advantage by changing the policy. It gave them the ability to spend more, although they of course spent the extra monies lamentably and we actually gained no sporting advantage. Whilst I accept your key point, and have never argued differently, that ultimately the net depreciation figures for the two methods are identical what is different is one policy allows for accelerated spending and/or (if you like) puts off reporting judgment day. Well judgment day has come today and confirms our overspending and P&S breach in the years after what has previously been audited. An overspending, and breach, which would have happened whichever amortisation policy is applied.

The EFL come out of this with little credit, but we, as a Club, have had this coming for a long time because of what I see as gaming. There is only one person to blame for that, and the fact that we are now heading back to the old 3rd Division next season. COYR!

[JfR]

Does anyone know the new FFP losses for each individual 1-year period? I've figured out a couple of the values, but not all of them

The overall loss over the entire period from 2014-2021 would be £87.72m (the £46.76m loss from 2014-2017 plus the £40.96m loss from 2017-2021).

Assuming the reported £5.6m FFP loss for 2014/15 is the same, seeing as it was before the change in policy, I factored this into the figures.

From this, I found that the combined loss for the two year period between 2015-2017 would be £41.16m (removing the known £5.6m loss for 2014/15 from the £46.76m loss for 2014-2017).

From this, I found that the 2017/18 period consisted of a £13.04m profit (removing the £41.16m loss in 2015-2017 from the £28.12m loss from 2015-2018).

Finally, I found that the last period, comprising 2018-2021* consisted of a £54m loss (removing the the £13.04m profit from 2017/18 from the £40.96m loss from 2017-2021).

So below are the figures I've got:

2014/15: -£5.6m
2015/16-2016/17: -£41.16m (ave. -£20.58m per each period)
2017/18: +£13.04m
2018/19-2019/20/21*: -£54m (ave. -£27m per each period)
Total loss: -£87.72m (ave. -£14.62m per each period)

So, if instead of looking at the figures as rolling 3-year averages, we simply say the club could lose up to £78m over 6 seasons, the club would have overspent this limit by £9.72m. This would have represented a 7 point deduction without aggravating factors, if this overspend was represented in a single season. It should be noted, however, that this does not factor in for the possibility that, under the previous method, losses from this period were intended to be "absorbed" into a later season (for example, if the club were to make a loss of only £3m this season, the overspend could be absorbed into that value in its entirely), nor does it factor in the option to argue that mitigating circumstances, particularly around the pandemic, made it extremely difficult if not impossible to not overspend during this period (e.g., the £20m unanticipated gap in finances).

 

*note that the 2019/20 and 2020/21 periods are presented in the P&S reports as a single year comprising an average between the two years.

[Kingpin]

24 minutes ago, LeedsCityRam said:

seems Quantuma have accepted what the EFL reportedly wanted all along in terms of FFP punishment,

They’re bound to. Quick sale needed. They’re Just suits with their own costs to cover, and pound of flesh to take. 
 

is anyone surprised ?

Edited November 16, 2021 by Kingpin

[Crewton]

As if to demonstrate the lack of understanding of which "rules" Derby have broken, we have this pile of nonsense from The Grauniad :

https://www.theguardian.com/football/2021/nov/16/Derby-deducted-another-nine-points-for-breaches-of-efl-rules-over-pride-park-sale

What a dreadful excuse for journalism and editing.

 

[kevinhectoring]

4 hours ago, Gaspode said:

Probably because we'd already been cleared of any wrong doing in the original case. The EFL appeal was focusiing on whether we'd used the different method to decieve or to gain an advantage, not whether we'd broken accountancy rules....

 

4 hours ago, G STAR RAM said:

Were we told one was required?

I'd say a qualified auditor, backed up by the ICAEW review of our file is pretty conclusive. 

What makes no sense is referring the matter to a panel with no accountants on it, to conclude on accountancy matters, and then having no right to appeal their judgement. 

You ask, Was our legal team told an expert was required ?!!     it’s an adversarial system where Nick de Marco has to decide how best to win the case, what evidence to put forward. We put no expert evidence forward. Hard to believe then that the accounting world was unanimous in thinking our policy was within FRS 102. Because if they had been, we would have had them in there shouting it from the rafters at the IDC
 

On your last paragraph: Does it make sense for a judge to decide a case that turns on a complex point of engineering? Or on a difficult question about the mental health of a defendant? Loads of cases turn on points of expertise that are way outside the competence of the judges. The solution is that expert evidence covers areas where the judge has no expertise. 

 

[i-Ram]

4 minutes ago, Crewton said:

As if to demonstrate the lack of understanding of which "rules" Derby have broken, we have this pile of nonsense from The Grauniad :

https://www.theguardian.com/football/2021/nov/16/Derby-deducted-another-nine-points-for-breaches-of-efl-rules-over-pride-park-sale

What a dreadful excuse for journalism and editing.

You should read their reports on political and social matters. Even more shocking.

[kevinhectoring]

4 hours ago, Gaspode said:

Probably because we'd already been cleared of any wrong doing in the original case. The EFL appeal was focusiing on whether we'd used the different method to decieve or to gain an advantage, not whether we'd broken accountancy rules....

Sorry wasn’t clear, I’m talking about the first hearing. The earlier post claimed that the accounting community agree that our method was FRS compliant. But at the initial IDC  hearing, the EFL puts forward professor Pope as an accounting expert, saying it was not compliant. And we put forward ... no one!!  No one ?  So de Marco decided that rather than put forward our own expert, we should discredit theirs. Suggests we could not find convincing expert support 

[Indy]

27 minutes ago, PistoldPete said:

There was none.. in fAct The  LAP  only ruled on a matter of law , not on the facts of the case. They did not cross examine anyone or have any extra evidence.  Proper remedy should have been to refer back to the IDC which had an accountant on it.

IIRC they specifically said the LAP could not consider any new evidence. If they could, we could have presented a new expert witness to formally state during the proceedings that everything was FRS102 compliant. 

[kevinhectoring]

31 minutes ago, G STAR RAM said:

d like to see a sample of Championship players sold over the last 10 years and see how their sale value compares to their NRV using straight line amortisation method.

That’s not the sample that shows whether the straight line basis makes sense. The sample you should ask for is how many players are above the straight line, and by how much. And how many are below. If it largely balances out, then that’s justification for the policy. 

[PistoldPete]

12 minutes ago, Crewton said:

As if to demonstrate the lack of understanding of which "rules" Derby have broken, we have this pile of nonsense from The Grauniad :

https://www.theguardian.com/football/2021/nov/16/Derby-deducted-another-nine-points-for-breaches-of-efl-rules-over-pride-park-sale

What a dreadful excuse for journalism and editing.

 

No wonder they are always begging for money frome their online readers. They can't afford proper journalists.

[PistoldPete]

18 minutes ago, JfR said:

Does anyone know the new FFP losses for each individual 1-year period? I've figured out a couple of the values, but not all of them

The overall loss over the entire period from 2014-2021 would be £87.72m (the £46.76m loss from 2014-2017 plus the £40.96m loss from 2017-2021).

Assuming the reported £5.6m FFP loss for 2014/15 is the same, seeing as it was before the change in policy, I factored this into the figures.

From this, I found that the combined loss for the two year period between 2015-2017 would be £41.16m (removing the known £5.6m loss for 2014/15 from the £46.76m loss for 2014-2017).

From this, I found that the 2017/18 period consisted of a £13.04m profit (removing the £41.16m loss in 2015-2017 from the £28.12m loss from 2015-2018).

Finally, I found that the last period, comprising 2018-2021* consisted of a £54m loss (removing the the £13.04m profit from 2017/18 from the £40.96m loss from 2017-2021).

So below are the figures I've got:

2014/15: -£5.6m
2015/16-2016/17: -£41.16m (ave. -£20.58m per each period)
2017/18: +£13.04m
2018/19-2019/20/21*: -£54m (ave. -£27m per each period)
Total loss: -£87.72m (ave. -£14.62m per each period)

So, if instead of looking at the figures as rolling 3-year averages, we simply say the club could lose up to £78m over 6 seasons, the club would have overspent this limit by £9.72m. This would have represented a 7 point deduction without aggravating factors, if this overspend was represented in a single season. It should be noted, however, that this does not factor in for the possibility that, under the previous method, losses from this period were intended to be "absorbed" into a later season (for example, if the club were to make a loss of only £3m this season, the overspend could be absorbed into that value in its entirely), nor does it factor in the option to argue that mitigating circumstances, particularly around the pandemic, made it extremely difficult if not impossible to not overspend during this period (e.g., the £20m unanticipated gap in finances).

 

*note that the 2019/20 and 2020/21 periods are presented in the P&S reports as a single year comprising an average between the two years.

I have always assumed were budgeting to stay within FFP and only didnt do so due to reasons we could not possibly have foreseen, namely the EFL charging us on the amortsiation issue and even more surprising the panel accepting the charge. Then we have COVID of course.

If neither of these had happened we would not have had an FFP penalty or an admin penalty .. unless someone has any evidence to the contrary in which case I will stand corrected. .

[kevinhectoring]

22 minutes ago, Kingpin said:

They’re Just suits with their own costs to cover,

I think the admins regard themselves as a profit centre not a cost centre

[YouRams]

Anyone else finding it really frustrating that MM started this fight with the EFL, runs away from it, puts us into admin then we have the book thrown at us and the EFL can carry on with their bullying ways and we’re left to look like the bad guys hated by everyone.

He had two options for me keep fighting what he started whatever the cost, if the EFL are in the wrong let everybody see it.

Or option two should’ve held his hands up, he’s not as smart as he thought he was, take the 9 point deduction and sell the club for whatever he could.

Instead he’s royally shafted us it’s unforgivable, no matter how much he put in, his ego has ruined our club.