Mel, did he really eat my hamster?

[G STAR RAM]

15 hours ago, Red Ram said:

Mel Morris inherited a squad panistakingly built on a shoestring budget by Nigel Clough over a number of seasons. It came within a whisker of getting promoted under Steve McClaren. That side could have survived and prospered in the Prem with a few key additions.

Once that squad missed out in the play-off final against QPR, Mel spent upwards of £50 million over the next 5 years or so, making it progressively weaker. He tripled the wage bill in the process, to the point where the annual wage bill was in excess of the club's annual turnover. Basically he gambled, lost and then did the classic gambler's fallacy thing - kept gambling to try and recover his losses. We ended up in breach of FFP in 3 of the 4 rolling three year windows within this period - hence the points deduction, which was actually significantly lower than the maximum tartiff that could have been imposed by the ELF. The HMRC winding up order was filed in January 2020 which was before COVID had hit the UK so it's literally rewriting history to try and blame COVID.

Mel, quite simply, massively overspent and then tried every trick in the book to massage the figures, including, and this keeps getting overlooked, changing the amortisation method without making it sufficiently clear to the EFL what the changes were. By the way, the EFL do not sign off accounts - this is another often repeated misconception. The club and then it's auditors sign off their own accounts. However the EFL do  have a duty to investigate and penalise any potential breaches of the rules that come to their attention. All the EFL have done is enforce the rules agreed on by all it's members including Derby. They had no choice but to do so. Blaming the EFL is like blaming the iceberg rather than the captain of the titanic.

Add to the above the decision to put us into administration which has, at best, more or less guaranteeed relegation to League One and, at worst, put the very survival of the club at risk. This, despite repeated previous assurances that he would continue to fund the club until it got a buyer.

I'm sure Mel geniunely wanted the best for the club and was desperate to suceed but the end result of his tenure is that Derby County may not exist in it's current form by this time next year. So yes, he ate your hamster.

You appear to have missed a very important piece from your jigsaw.

I am sure that you will remember that the EFL go an INDEPENDENT Disciplinary Commission to review the alleged rule breaking.

The outcome of that and the EFLs decisions to ignore the findings is a major part in how we ended up where we are.

[RoyMac5]

56 minutes ago, PistoldPete said:

I think the initial non payment was due to the club being in advanced stages of being sold, the buyer who had agreed to take over  pulled out at the last minute in January 2020. Let's hope that history doesnt repeat itself in January 2022.

It can't have just been a small amount though - HMRC don't threaten winding up orders just like that do they?

[CBRammette]

I think its all too raw to be objective as yet. But I think Mel's main error was when he started to go with the invincible hype and think he was bigger than our club. Noone is and once you put yourself arrogantly above the parapet like that you generally make enemies who will want to bring you down. Once it got to that point neither he or those enemies had much thought for what it is really all about.... the existence of a founding member of the league, our lovely Derby County. Shame on everyone involved from Mel, those at the EFL, football analysts/writers and those at other clubs (prob not just the 2 more public ones). All are culpable to some extent but Mel seemed to lose his judgement and we have paid

[PistoldPete]

5 minutes ago, RoyMac5 said:

It can't have just been a small amount though - HMRC don't threaten winding up orders just like that do they?

Well 40% tax on a £35m wage bill, plus Employer and employee NI , wouldn't take long for that to build up to a tidy sum. mel's "excuse" was that it was due to be paid by the buyer, but they pulled out so he had to pay it instead. Seems pretty lame maybe , but main thing is it was paid.      

[RoyMac5]

2 minutes ago, PistoldPete said:

Well 40% tax on a £35m wage bill, plus Employer and employee NI , wouldn't take long for that to build up to a tidy sum. mel's "excuse" was that it was due to be paid by the buyer, but they pulled out so he had to pay it instead. Seems pretty lame maybe , but main thing is it was paid.      

I know what the 'excuse' was and it still doesn't sit right that it got that far - he must have stopped paying for quite some time on the pretext of (another?!) take-over.

So he's let the club get close to going under more than once! 

[TigerTedd]

55 minutes ago, RoyMac5 said:

I know what the 'excuse' was and it still doesn't sit right that it got that far - he must have stopped paying for quite some time on the pretext of (another?!) take-over.

So he's let the club get close to going under more than once! 

Remember when those down the road would have a winding up order every other week, and we would take the piss. I kind of wish a winding up order was the least of our worried now. 

[PistoldPete]

1 hour ago, RoyMac5 said:

I know what the 'excuse' was and it still doesn't sit right that it got that far - he must have stopped paying for quite some time on the pretext of (another?!) take-over.

So he's let the club get close to going under more than once! 

Like I say it may only be one month's PAYE tax, still a million or two. HMRC can get very trigger happy, they tried to liquidate Bury for want of a few thousand quid.  I don't think we were remotely close to going under in January 2020. We are a lot closer now, although admin team still say they are positive. 

[gfs1ram]

21 hours ago, Truckle said:

I don’t understand why we are all so keen to blame Mel rather than the EFL. 

The problem with laying the blame at Mel’s door is that the logic just doesn’t add up.  It relies on 3 pillars:

• Mel is as thick as mince
• He actively decided to ruin and devalue an asset he owns
• He is some kind of agent who intentionally bought Derby to ruin it.

Let’s assume for a second that Mel Morris is neither stupid nor intent on ruining the club he supports, then you really have to ask – how does any of it make sense?

There is an alternative narrative to the ‘Mel ate my hamster’ view of the world. What he did during his time was try to get us promoted by sailing as close to the limit of FFP as possible, just like every other club with a reasonably minted owner.  Where he massively failed was in not having the foresight to build a time machine.

When we submitted the financial figures to the EFL on 30th June 2016 the EFL signed-off on those figures. As a result Mel based his future spending plans on how much he could put into the club while staying within FFP using that method. He funded the club on this basis for the next 3 years, without a murmur from the EFL.

Let’s say that the EFL had been even half-way competent – it’s a stretch I know, but bear with me – and had said on the 30th of June 2016.

“Mr Morris, we don’t think you should amortise in this way, can you resubmit using the previous method?”

What do you think he would have done? Given that he’s not stupid or intent on ruining the club I’m betting he’d have said:

“Right you are, I’ll change my plans accordingly”

And over the next couple of years sold Tom Laurence and not bought Krystian Beilik.  From the figures that have been quoted I think would have been enough to comply with FFP, and if it wasn’t he would have sold someone else, wouldn’t he?  Given the alternative was to destroy a really valuable asset he owned I don’t think that is an unreasonable assumption.  I would argue the EFL retrospectively moving the goal posts and a global pandemic that disproportionately hits the best supported teams are why we are where we are rather than the blame all laying at Mel’s door.

My sentiments exactly but I also agree with Pistolpete, LazioW & David's additional comments re Admin.

Yes Mel gambled big time and lost. QPR, Villa, Bournemouth and even Boro amongst others did the same and won. We made some awful costly signings for which Mel has to take responsibility.

However putting the Club into Administration looks to be his biggest mistake. Far from crystallising the position it immediately handed the initiative to the EFL to impose dubious points deductions and too Boro and Wycombe to hold the Club to ransom. 

What I would have loved to have seen was for Mel to take those three to court if necessary and fight our position. Something the Administrators will not/cannot do.

Our amortisation policy was entirely legal and an accepted accounting practice we were just the first to introduce it in football. Just because Gibson threatened the EFL with legal action and Maguire highlighted it, asking a Club to rewrite/backdate it's accounts some 2/3 years later is just wrong. As the OP says in fairness Derby/Mel would have based the FFP calculations on those original figures.

Mel should also have cleared the debts then selling the Club would have been easier. 

Whats another £100m when you have already lost £200m ??  Then again it's not my money ?

I fear now the Middlesborough claim could well liquidate the Club.

 

 

 

 

[PistoldPete]

29 minutes ago, gfs1ram said:

My sentiments exactly but I also agree with Pistolpete, LazioW & David's additional comments re Admin.

Yes Mel gambled big time and lost. QPR, Villa, Bournemouth and even Boro amongst others did the same and won. We made some awful costly signings for which Mel has to take responsibility.

However putting the Club into Administration looks to be his biggest mistake. Far from crystallising the position it immediately handed the initiative to the EFL to impose dubious points deductions and too Boro and Wycombe to hold the Club to ransom. 

What I would have loved to have seen was for Mel to take those three to court if necessary and fight our position. Something the Administrators will not/cannot do.

Our amortisation policy was entirely legal and an accepted accounting practice we were just the first to introduce it in football. Just because Gibson threatened the EFL with legal action and Maguire highlighted it, asking a Club to rewrite/backdate it's accounts some 2/3 years later is just wrong. As the OP says in fairness Derby/Mel would have based the FFP calculations on those original figures.

Mel should also have cleared the debts then selling the Club would have been easier. 

Whats another £100m when you have already lost £200m ??  Then again it's not my money ?

I fear now the Middlesborough claim could well liquidate the Club.

 

 

 

 

I agree with all of this except not sure how much choice Mel had in putting us into admin. does he have the money anymore? 
 

and I certainly hope you are wrong about Boro claim liquidating us. The claim itself is rubbish of course but they could delay a buyer coming in which is absolutely not what we need.

[RoyMac5]

2 minutes ago, PistoldPete said:

I agree with all of this except not sure how much choice Mel had in putting us into admin. does he have the money anymore? 
 

and I certainly hope you are wrong about Boro claim liquidating us. The claim itself is rubbish of course but they could delay a buyer coming in which is absolutely not what we need.

Who was in charge of the Club?

Who made all the decisions?

Who still owns the ground?

Which Club is in administration and at risk of liquidation?

[hintonsboots]

32 minutes ago, gfs1ram said:

fear now the Middlesborough claim could well liquidate the Club.

 

 

[i-Ram]

8 minutes ago, PistoldPete said:

I agree with all of this except not sure how much choice Mel had in putting us into admin. does he have the money anymore? 

This is the 60m (dollar) question isn’t it? If he has the money then he has sold the Club down the river. If he has run out of money, and this I think unlikely, he has been a silly old fool. 

[PistoldPete]

30 minutes ago, i-Ram said:

This is the 60m (dollar) question isn’t it? If he has the money then he has sold the Club down the river. If he has run out of money, and this I think unlikely, he has been a silly old fool. 

Agreed. In fact I said much the same in response to the original post. 

[Ram-Alf]

19 hours ago, Archie said:

 

I don't know how he shuts his eyes and sleeps at night. The guilt alone would ruin me. 

During my time as a Senior Union Official, I've met several multi millionaires, One more than once(Sir John Rose ex CEO of Rolls Royce)and the common denominator is...they see life WAY WAY different to a person on the shop floor, If I only had £10k and lost £9,500 on a secondhand car as it was broken i'd be mortified , Or if had 100s of millions of £s and lost £100m what's all the fuss, I'm still filthy rich.

MM doesn't walk in our shoes...he may have done once, The circle he runs in is wealth, He kidded those who believed him, People fooled him he employed, Money becomes an issue when you see walking at the end of the tunnel and the tap is still running and pissing money out...Lansdowne at Bristol City a good example.

MM played HIS! game, Turned the tap off, He loved the limelight as pictures of him at away games buying beers for some, He didn't like to be criticised...hence the Breakfast Club a few years back, The fallout with several Managers, Walking into the dressing room at HT, The shananingans over Pearsons/Clements sackings shows what kind of person MM is/was.

MM also gave a lot of his wealth away, Hospital, Charities, Supporters, Gifts left right and centre, But in a "selfish" way knowing he either put it through as tax relief or knew his other monies would re coup those gifts.

He'll get no plaudits or anger from myself, It's the person on the shopfloor who gets my sympathy.

 

[Red Ram]

5 hours ago, G STAR RAM said:

You appear to have missed a very important piece from your jigsaw.

I am sure that you will remember that the EFL go an INDEPENDENT Disciplinary Commission to review the alleged rule breaking.

The outcome of that and the EFLs decisions to ignore the findings is a major part in how we ended up where we are.

Do you mean this independent disciplinary panel?

https://www.derbytelegraph.co.uk/sport/football/football-news/Derby-county-efl-appeal-fine-5605588

https://www.efl.com/news/2021/june/-Derby-county/

The EFL did not ignore the findings. In fact they (reluctantly) accepted them and decided not to appeal against the £100k fine.

It was the independent panel itself that

"found the policy adopted for the amortisation of player registrations and the description in the notes to the Annual Accounts did not comply with Profit & Sustainability (P&S) rules"

and in consequence, ordered Derby

"to submit revised and restated accounts for the years ended 30 June 2016, 30 June 2017 and 30 June 2018" using a "compliant form of amortisation in accordance with accounting standard FRS102 and the requirement of the P&S Rules".

From what I remember, Mel assured us that the revised accounts would still be within FFP. It was only in the final interview with Radio Derby that he finally admitted that this wasn't the case.

Apologies in advance if you're referring to a different part of the process though...

 

 

Edited January 1, 2022 by Red Ram

[RoyMac5]

1 hour ago, PistoldPete said:

Agreed. In fact I said much the same in response to the original post. 

He's not poor. He's plenty of financial 'equity'. He just decided 'no more'!

He got us into debt and has baled out rather than keep funding us. But before then made sure he's got the ground - how come that (seperate) company hasn't gone into admin then?

Edited January 1, 2022 by RoyMac5

[MackworthRamIsGod]

13 hours ago, TigerTedd said:

Ive realised something. Putting us into administration at the start of the season, was Mel’s last attempt at circumventing the rules and trying to be clever. And, true to firm, it has back fired on him again.

if you get to the end of the season, adrift in the relegation zone, you can’t just go into admin then and take your 12pt deduction when it doesn’t matter. It gets taken off you next season instead.

so what he’s done is said, ‘well last season we just barely survived. This season we’re under an embargo, and we’re likely to have some sort of points deduction. So relegation is inevitable. So now is the perfect opportunity to go into admin and take the points deduction this season, so it doesn’t effect next season’.

If we had to go into admin, and the choice is between now and next season, now probably would be the most logical time to do it. (The question being, did we really have to go into admin? Could he have propped us io for another season til we got past all this EFL ********? No other championship club has had to go into admin despite the pandemic. Was that a purely selfish decision, or was their some twisted logic that going into admin now was the best long term solution for the club?) - but let’s give him the benefit of the doubt and say that we’d got to a point where admin was the last inevitable resort to get him and us out of the mess he’d created.

little did he know, that we’re actually putting on a fantastic show of spirit, and if we only had to deal with the 9pt deficit, we’d already be as good as out of the relegation zone, and planning next season in the championship.

i don’t think he’s done anything to purposefully ruin the club, I don’t think he’s vindictive, or that he’s the route of all evil. I just think he’s been a bit naive, a bit unlucky, a bit reckless, a bit cocky, and a bit stupid. And a combination of all those things, is a recipe for disaster.

 

I've always said, he is so unlucky, like ridiculously so. He is like the skittles man on the advert that touches everything and it turns to skittles. Only for him its poo.

[Rosythram]

It’s called having the opposite of the Midas touch, when everything you touch turns to poo.

Yes it’s not the best just lately but Derby County FC has always had a tendency to be the ultimate in roller coasters, I for one hold no malice.

At most things in life you serve an apprenticeship possibly two that you don’t, one being a parent and the other a football chairman both of which can on occasions be an absolute nightmare.

I really do believe we will be ok it might not all happen in the majority of supporters acceptable time frame but I’m sure it will happen and to the club’s benefit and satisfaction.

Happy New Year to one and all.

[Crewton]

5 hours ago, TigerTedd said:

Remember when those down the road would have a winding up order every other week, and we would take the piss. I kind of wish a winding up order was the least of our worried now. 

From "Accountancy Daily" 19/09/2016

Quote

Nottingham Forest Football Club is set to overturn a sixth winding up order at the Companies Court later today, stating that outstanding debts to HMRC have been settled

The club, currently standing at 13th in the Football League Championship, is due in court this afternoon, but club executives have told local paper the Nottingham Post that they have paid the debt already and have had written confirmation that HMRC’s petition will be dismissed.

Nottingham Forest finance director Lalou Tifrit said: ‘This was settled some time ago, the club is in a sound, financially viable position. We have a good relationship with HMRC and we are disappointed that the process has gone this far.’

The Reds last faced a winding up order in March this year, when HMRC also confirmed at the hearing that the debt had been paid in full. The latest order is number six in a line stretching back over the last couple of years.

In 2014 the club faced a petition from Le Bistro, a subsidiary of stadium caterers Elior which sought settlement of a £200,000 bill, which was paid. The same year HMRC issued a winding up petition over an unpaid tax bill of £1.8m, which was dismissed after the debit and costs were paid in full.

Also in 2014 another winding-up petition by football agency Impact Sports Management Ltd, over an unidentified debt, was also settled, while in January 2016 there was been one other winding-up petition relating to another undisclosed tax debt which has been paid in full.

Nottingham Forest has recently been released from a transfer embargo imposed by the Football Association in 2014 for failing to comply with the financial fair play rules. The ban meant the club has been unable to take part in three previous transfer seasons, but was lifted in May.

The good old days.

[JuanFloEvraTheCocu'sNesta]

Regardless of his intent, Mel has let the club in such a dire state that it's very existence is threatened.

To be blunt, I dont care what he was trying to do. He owned the club, the buck stops with him. His fault.