Stephen Pearce on Radio Derby 6pm Tuesday

[We'll be back in 81]

Maybe part of the Clowes deal with Mel to buy the ground was that Pearce had to be kept on for a period of time, just a thought.

[G STAR RAM]

1 hour ago, Leeds Ram said:

I'm not a lawyer but I find it hard to believe that Morris still has an NDA so wide-ranging around Pearce that he can't shed any light at all on how he felt while performing that job. I would think it would be very hard, if not impossible, to make an argument that Pearce's feelings on job performance and environment are part of confidential company information. As far as I am aware NDA's that are too broad or pertain to information which could not be considered confidential can be broken and have been. There is also a question that if he did sign an unbreakable NDA then there would also surely be questions as to the viability of his use in his position in the post-Morris era as presumably Pearce also couldn't discuss these issues with Clowes either. I find it odd that everyone just seems to have accepted this explanation with seemingly little to no probing at all, including local journalists. 

I think the sooner leaves the club the better. He helped drive the club off the cliff edge and repeatedly went on media shows telling us all everything was hunky dory when it wasn't. His discussion on radio derby where he says 'he'd rather not discuss the mel era' just shows his problems. I find it staggering that someone that high up in the club could comfortably state that given the trauma that the club and the fanbase went through. A trauma which he helped create and would have failed to mop up without a last minute local businessman saving his backside. 

Either the bloke was incompetent or he lied. Those are the two choices he's left with tbh. Our amortisation policy which he helped deploy was a recipe for disaster aside from the moral questionability of such a practice. Clowes kept him on for god knows what reason- perhaps he's a nice guy who believes the best in everyone or maybe he saw a giant organisation in an absolute state and needed someone to steer the ship for a year or two while he got more acquainted with it. However, the day Pearce leaves, either mutually or not, will be a day I'll be celebrating. 

Just a few counter arguments here:-

When was the last time, pre administration, that he told everyone things were hunky dory? The last time I remember it was the Nunsfield House forum, at which point the ground sale had gone through and the amortisation policy agreed with The EFL. Even then from memory he said we were sailing close to the wind and were possibly be within hundred thousand of the limit. Seem to remember him saying it was why a good cup run would help. Happy to be corrected if I've got anything wrong here.

The amortisation policy that you seem to state he made up is actually quite very standard policy. Not standard in the football world but certainly very common in the business world. It was actually a clever idea which helped reflect reality much more than the current system did. Of course if there was anything wrong with it, the EFL had plenty of opportunity to point this out.

Not really sure what you want him to say about the MM era? Personally I'm happy to leave it in the past and also happy to trust Clowes' judgement if he thinks keeping him on is to the benefit of the club. Clowes is a Derby fan through and through and I'm sure if he thought Pearce was responsible for nearly destroying the club he loves, he would be long gone.

[Leeds Ram]

10 minutes ago, G STAR RAM said:

Just a few counter arguments here:-

When was the last time, pre administration, that he told everyone things were hunky dory? The last time I remember it was the Nunsfield House forum, at which point the ground sale had gone through and the amortisation policy agreed with The EFL. Even then from memory he said we were sailing close to the wind and were possibly be within hundred thousand of the limit. Seem to remember him saying it was why a good cup run would help. Happy to be corrected if I've got anything wrong here.

The amortisation policy that you seem to state he made up is actually quite very standard policy. Not standard in the football world but certainly very common in the business world. It was actually a clever idea which helped reflect reality much more than the current system did. Of course if there was anything wrong with it, the EFL had plenty of opportunity to point this out.

Not really sure what you want him to say about the MM era? Personally I'm happy to leave it in the past and also happy to trust Clowes' judgement if he thinks keeping him on is to the benefit of the club. Clowes is a Derby fan through and through and I'm sure if he thought Pearce was responsible for nearly destroying the club he loves, he would be long gone.

To the first question I'd just put this up as an example as to what I'm talking about. 

 on the amortisation policy, my brother-in-law who worked as a senior accountant at a major firm described it to me as crooked and dangerous as a policy. He spotted it as a red flag immediately when he read reports of it tbh. Now I tend to trust his judgement in these matters as he's highly regarded in his field. 

On the third point I'd like him to show some f****** contrition. He's somehow been kept on a six figure salary after playing a significant role in almost killing the club. I don't think I've ever heard him even apologise for his role in this. When he's asked about his role in the media I don't think it's good enough for him to say he'd rather not talk about it. Given what the club and the fans went through it strikes me as exceedingly arrogant that he believes he can simply pretend it never happened. 

 

Edited February 22 by Leeds Ram

[Tamworthram]

1 hour ago, We'll be back in 81 said:

Maybe part of the Clowes deal with Mel to buy the ground was that Pearce had to be kept on for a period of time, just a thought.

Possible but very unlikely I would have thought. I can’t imagine Mel being bothered enough to put any such condition in the contract and risk it not going through.

[G STAR RAM]

20 minutes ago, Leeds Ram said:

To the first question I'd just put this up as an example as to what I'm talking about. 

 on the amortisation policy, my brother-in-law who worked as a senior accountant at a major firm described it to me as crooked and dangerous as a policy. He spotted it as a red flag immediately when he read reports of it tbh. Now I tend to trust his judgement in these matters as he's highly regarded in his field. 

On the third point I'd like him to show some f****** contrition. He's somehow been kept on a six figure salary after playing a significant role in almost killing the club. I don't think I've ever heard him even apologise for his role in this. When he's asked about his role in the media I don't think it's good enough for him to say he'd rather not talk about it. Given what the club and the fans went through it strikes me as exceedingly arrogant that he believes he can simply pretend it never happened. 
 

Fair comment on the first point, I genuinely don't remember the last time I had really even heard him in public. 

I think even at the point in question we were not in much financial trouble which I could probably demonstrate if I went through the accounts.

As an accountant and auditor for 25 years myself, I also see myself very well qualified to comment on the amortisation matter and I'm completely baffled why anyone in the field would describe the policy as crooked, and the experts on the Independent Disciplinary Commission certainly didn't seem to take that view either.

Regarding the 3rd point, fair enough if you think an apology would go anywhere towards putting things right. I imagine if he did apologise you wouldn't accept it anyway given how you seem to view matters. Also perhaps he doesn't think he has anything to apologise for, after all it wasn't him that pulled the plug and stopped funding his business.

[Crewton]

57 minutes ago, Tamworthram said:

Possible but very unlikely I would have thought. I can’t imagine Mel being bothered enough to put any such condition in the contract and risk it not going through.

I agree - trying to impose a CEO on the purchaser wouldn't get past a first draft.

[Herdwick Ram]

1 hour ago, G STAR RAM said:

Fair comment on the first point, I genuinely don't remember the last time I had really even heard him in public. 

I think even at the point in question we were not in much financial trouble which I could probably demonstrate if I went through the accounts.

As an accountant and auditor for 25 years myself, I also see myself very well qualified to comment on the amortisation matter and I'm completely baffled why anyone in the field would describe the policy as crooked, and the experts on the Independent Disciplinary Commission certainly didn't seem to take that view either.

Regarding the 3rd point, fair enough if you think an apology would go anywhere towards putting things right. I imagine if he did apologise you wouldn't accept it anyway given how you seem to view matters. Also perhaps he doesn't think he has anything to apologise for, after all it wasn't him that pulled the plug and stopped funding his business.

I'm also a qualified accountant, and I too find it baffling why anyone would describe the amortisation policy as "crooked" ?

Anyone with a rudimentary understanding of reporting standards ( ie, FRS102 & IFRS15 etc ) would know that the policy would be subject to independent audit, and would have been picked up if that was the case. And remember, the IDC found no fault with the policy itself as the initial charge was dismissed, the issue on appeal was disclosure and not the policy per se.

And in fact, the audit files were also subject to an additional review by the ICAEW too - which is about as thorough as you can get.

Maybe SP simply can't disclose private matters because he's an employee of the company and as such has a professional + moral + legal obligation not too, or maybe his simply doesn't want to talk about it ..... and maybe we ought to give him the benefit of the doubt as DC clearly has ( and by effectively saving the club he should have earned our trust as fans ).

 

[Leeds Ram]

2 hours ago, G STAR RAM said:

Fair comment on the first point, I genuinely don't remember the last time I had really even heard him in public. 

I think even at the point in question we were not in much financial trouble which I could probably demonstrate if I went through the accounts.

As an accountant and auditor for 25 years myself, I also see myself very well qualified to comment on the amortisation matter and I'm completely baffled why anyone in the field would describe the policy as crooked, and the experts on the Independent Disciplinary Commission certainly didn't seem to take that view either.

Regarding the 3rd point, fair enough if you think an apology would go anywhere towards putting things right. I imagine if he did apologise you wouldn't accept it anyway given how you seem to view matters. Also perhaps he doesn't think he has anything to apologise for, after all it wasn't him that pulled the plug and stopped funding his business.

On the second point, I guess it's like anything in fields people have different views. From memory, my brother-in-law believed it was essentially a ploy to overinflate assets to skirt what were rules put in place to ensure fairness of competition. He felt, from what I remember, that it also indicated deeper issues with the core business model. I would emphasise I know nothing about this area at all but I do know we were at odds with how other clubs did their accounts at the time. 

On the 3rd point honestly, an apology and a recognition of his role in the disaster would go a long way with me. He was a core part of the flawed unsustainable business structure which left us in 10's of millions of debt and ultimately saw us as a bankrupt and isolated business. By not openly recognising his role in that debacle and it's ludicrous to suggest as CEO he had no role in it, it just makes me think what planet is this guy on. It makes me think he's arrogant and a bit ridiculous. I recognise people make mistakes, even serial mistakes, but a failure to acknowledge to recognise those mistakes is a serious issue for me. 

Edited February 22 by Leeds Ram

[europia]

5 hours ago, Leeds Ram said:

I'm not a lawyer but I find it hard to believe that Morris still has an NDA so wide-ranging around Pearce that he can't shed any light at all on how he felt while performing that job. I would think it would be very hard, if not impossible, to make an argument that Pearce's feelings on job performance and environment are part of confidential company information. As far as I am aware NDA's that are too broad or pertain to information which could not be considered confidential can be broken and have been. There is also a question that if he did sign an unbreakable NDA then there would also surely be questions as to the viability of his use in his position in the post-Morris era as presumably Pearce also couldn't discuss these issues with Clowes either. I find it odd that everyone just seems to have accepted this explanation with seemingly little to no probing at all, including local journalists. 

I think the sooner leaves the club the better. He helped drive the club off the cliff edge and repeatedly went on media shows telling us all everything was hunky dory when it wasn't. His discussion on radio derby where he says 'he'd rather not discuss the mel era' just shows his problems. I find it staggering that someone that high up in the club could comfortably state that given the trauma that the club and the fanbase went through. A trauma which he helped create and would have failed to mop up without a last minute local businessman saving his backside. 

Either the bloke was incompetent or he lied. Those are the two choices he's left with tbh. Our amortisation policy which he helped deploy was a recipe for disaster aside from the moral questionability of such a practice. Clowes kept him on for god knows what reason- perhaps he's a nice guy who believes the best in everyone or maybe he saw a giant organisation in an absolute state and needed someone to steer the ship for a year or two while he got more acquainted with it. However, the day Pearce leaves, either mutually or not, will be a day I'll be celebrating. 

Totally agree. There's no way that SP wasn't complicit. To suggest otherwise is rather fanciful. 

[G STAR RAM]

1 hour ago, Herdwick Ram said:

I'm also a qualified accountant, and I too find it baffling why anyone would describe the amortisation policy as "crooked" ?

Anyone with a rudimentary understanding of reporting standards ( ie, FRS102 & IFRS15 etc ) would know that the policy would be subject to independent audit, and would have been picked up if that was the case. And remember, the IDC found no fault with the policy itself as the initial charge was dismissed, the issue on appeal was disclosure and not the policy per se.

And in fact, the audit files were also subject to an additional review by the ICAEW too - which is about as thorough as you can get.

Maybe SP simply can't disclose private matters because he's an employee of the company and as such has a professional + moral + legal obligation not too, or maybe his simply doesn't want to talk about it ..... and maybe we ought to give him the benefit of the doubt as DC clearly has ( and by effectively saving the club he should have earned our trust as fans ).

 

The only thing I'd say about the amortisation policy is that the fair value of players is very subjective but, for me, the principle of lower amortisation in the early years of a contract seemed fairly logical and more realistic than straight line amortisation. 

The only argument I could see against it in our situation is that we overpaid for older players with very little residual value, even taking that into account the end result would always have been the same.

[G STAR RAM]

1 hour ago, Leeds Ram said:

On the second point, I guess it's like anything in fields people have different views. From memory, my brother-in-law believed it was essentially a ploy to overinflate assets to skirt what were rules put in place to ensure fairness of competition. He felt, from what I remember, that it also indicated deeper issues with the core business model. I would emphasise I know nothing about this area at all but I do know we were at odds with how other clubs did their accounts at the time. 

On the 3rd point honestly, an apology and a recognition of his role in the disaster would go a long way with me. He was a core part of the flawed unsustainable business structure which left us in 10's of millions of debt and ultimately saw us as a bankrupt and isolated business. By not openly recognising his role in that debacle and it's ludicrous to suggest as CEO he had no role in it, it just makes me think what planet is this guy on. It makes me think he's arrogant and a bit ridiculous. I recognise people make mistakes, even serial mistakes, but a failure to acknowledge to recognise those mistakes is a serious issue for me. 

I think having different views is quite a leap from calling something crooked, when it isn't. 

Unless your brother in law was privvy to the valuations assigned to players and had his own reliable method for proving they were over inflated I really struggle to see how he could come to the conclusion it was crooked and I'd say his opinion was anything other than professional and is more akin to the Kieran Maguire type comments made with no justification. 

I'm afraid I just can't agree with you on the last point. We were left bankrupt because our owner refused to continue to financially support us.

With regards to what I said earlier regarding the timescale of us getting in the mess,.with a wage bill of over £40m it would literally only have taken 9 or 10 months to rack up a PAYE debt of £25m. Hence how we went from being in a good position pre Covid to tens of millions in debt when we entered administration in September 2021 (from memory).

[G STAR RAM]

38 minutes ago, europia said:

Totally agree. There's no way that SP wasn't complicit. To suggest otherwise is rather fanciful. 

Complicit in?

[angieram]

Aren't most football clubs at Championship level and above part of a "flawed unsustainable business structure", propped up by the largesse of their owners? Until they decide to pull the plug - and that's where the current problem in football lies. 

Does that mean every CEO is at fault for following the instructions of their owners? 

There's one person to blame for the mess at Derby County, and he is no longer owner! 

[duncanjwitham]

26 minutes ago, angieram said:

Aren't most football clubs at Championship level and above part of a "flawed unsustainable business structure", propped up by the largesse of their owners? Until they decide to pull the plug - and that's where the current problem in football lies. 

Does that mean every CEO is at fault for following the instructions of their owners? 

There's one person to blame for the mess at Derby County, and he is no longer owner! 

I mean, we're basically in that position now.  Maybe Pearce should resign in protest at the horrendous way Clowes is running the club?  I'm sure that would make a few heads explode on here.

(I'm sure I don't need a sarcasm tag, but just in case... /s)

[Steve Buckley’s Dog]

30 minutes ago, angieram said:

Aren't most football clubs at Championship level and above part of a "flawed unsustainable business structure", propped up by the largesse of their owners? Until they decide to pull the plug - and that's where the current problem in football lies. 

Does that mean every CEO is at fault for following the instructions of their owners? 

There's one person to blame for the mess at Derby County, and he is no longer owner! 

Except Middlesbrough obviously! All their losses, moving funds about and writing off debts is absolutely sustainable because Steve Gibson says so. The rest, yes, but not them. The only thing that has prevented them reaching the riches of the promised land is nasty Derby County buying Martin Waghorn! If it wasn’t for that…doesn’t bear thinking about does it. They could be champions of Europe, just like Leeds. 

[valakari]

Stephen Pearce had the same attitude at the forum at PP before Xmas, as he did in this podcast... he considered any question re the Morris era as irrelevant and refused to talk about...well Mr Pearce, you should read the room, we, the fans, would like to know...and.... certainly deserve, at the very least, an apology!!!

Edited February 23 by valakari
Typo

[Leeds Ram]

11 hours ago, G STAR RAM said:

I think having different views is quite a leap from calling something crooked, when it isn't. 

Unless your brother in law was privvy to the valuations assigned to players and had his own reliable method for proving they were over inflated I really struggle to see how he could come to the conclusion it was crooked and I'd say his opinion was anything other than professional and is more akin to the Kieran Maguire type comments made with no justification. 

I'm afraid I just can't agree with you on the last point. We were left bankrupt because our owner refused to continue to financially support us.

With regards to what I said earlier regarding the timescale of us getting in the mess,.with a wage bill of over £40m it would literally only have taken 9 or 10 months to rack up a PAYE debt of £25m. Hence how we went from being in a good position pre Covid to tens of millions in debt when we entered administration in September 2021 (from memory).

Well not really no. In my field, there is a range of different views on legitimacy- one person may say something is legitimate another person may reasonably contest that point. Again, I'm not an accountant so on the more technical details I can't contest them. 

If a business cannot sustain itself without regular large infusions of cash it makes it functionally non-viable does it not?  Now most clubs do run on an investor model but we were at the sharper end of owner investment reliance with the Villa, Leeds, Stoke and a couple of others. The red flags were there with the loan from MSD, selling the stadium back to himself at an overinflated price, and the inability to pay Cocu's full severance package which he 'deferred'.  Rowett's revelations that Mel was scaling back investment to then only go and blow a load on Lampard speaks of serious strategic failures at a high level. This was hardly a well-managed ship- it was a wreck moving from one expensive mistake to another. Now you can lay all that at the feet of Mel or you can suggest maybe the CEO is also in some way to blame. With the amortisation policy, it completely alienated us from the EFL, rightly or wrongly, strategically it was an idiotic thing to do even if it got us out of the mire temporarily. The blowback was horrific. 

I think it's difficult to argue the club wasn't financially and strategically mismanaged. It led us to go within a week of non-existence, indebted and unable to even pay transfer fees on players we'd already signed. We were left in a position no other club in the division was in. I tend to think that Pearce as CEO bears some responsibility for that and his unwillingness to publically own up to his part in almost killing a 140-year-old institution doesn't reflect well on him. It in my view speaks a little to his character and potentially lack of it. It leaves a cloud hanging over the club with him here continuing. 

That's just my opinion though and I respect that plenty of others with more knowledge than me of the situation will disagree. 

[Leeds Ram]

1 hour ago, angieram said:

Aren't most football clubs at Championship level and above part of a "flawed unsustainable business structure", propped up by the largesse of their owners? Until they decide to pull the plug - and that's where the current problem in football lies. 

Does that mean every CEO is at fault for following the instructions of their owners? 

There's one person to blame for the mess at Derby County, and he is no longer owner! 

There are levels and levels. We weren't operating like a Preston or a Coventry or a Luton. We were operating closer to a Villa, Leeds and Stoke model. In my opinion, those models are inherently dangerous and if you don't have billions (which Mel never did) then it adds an extra layer of risk. You add in the 'unique' amortisation policy, selling off PP to the owner at an overinflated price, buying players which it turned out we couldn't fully pay for and the MSD loan it all starts to look like an absolute shambles... which it was. We don't know the full circumstances as to the timeline when Mel decided he'd pull the funding but I doubt he woke up one morning and said 'f*** this I'm pulling the plug'. Rumours had already been circulating that there were financial problems before we went into administration after all. 

I think pretending Pearce had no control over the running of the club as CEO is slightly ridiculous. Also pretending we were run 'just like every other club' isn't exactly true either. We enacted policies to maximise our financial leverage and when the capital ran out the floor dropped out from underneath us. In doing so we alienated other clubs and the organisation running our league who bore a grudge against us until a new owner took over. 

Now personally, I don't think it's good enough for the CEO at the time who still remains in his job merely to say 'I'd rather not discuss it'. Well, I and 30,000 others would rather not have seen the club almost liquidated, the academy pilfered and a relegation forced upon us. I'm sure the people who lost their jobs would rather not have seen that happen and the vendors who lost money would rather have been paid on time and in the full amount. To me it just stinks that he takes that attitude given what has happened. 

[G STAR RAM]

4 minutes ago, Leeds Ram said:

Well not really no. In my field, there is a range of different views on legitimacy- one person may say something is legitimate another person may reasonably contest that point. Again, I'm not an accountant so on the more technical details I can't contest them. 

If a business cannot sustain itself without regular large infusions of cash it makes it functionally non-viable does it not?  Now most clubs do run on an investor model but we were at the sharper end of owner investment reliance with the Villa, Leeds, Stoke and a couple of others. The red flags were there with the loan from MSD, selling the stadium back to himself at an overinflated price, and the inability to pay Cocu's full severance package which he 'deferred'.  Rowett's revelations that Mel was scaling back investment to then only go and blow a load on Lampard speaks of serious strategic failures at a high level. This was hardly a well-managed ship- it was a wreck moving from one expensive mistake to another. Now you can lay all that at the feet of Mel or you can suggest maybe the CEO is also in some way to blame. With the amortisation policy, it completely alienated us from the EFL, rightly or wrongly, strategically it was an idiotic thing to do even if it got us out of the mire temporarily. The blowback was horrific. 

I think it's difficult to argue the club wasn't financially and strategically mismanaged. It led us to go within a week of non-existence, indebted and unable to even pay transfer fees on players we'd already signed. We were left in a position no other club in the division was in. I tend to think that Pearce as CEO bears some responsibility for that and his unwillingness to publically own up to his part in almost killing a 140-year-old institution doesn't reflect well on him. It in my view speaks a little to his character and potentially lack of it. It leaves a cloud hanging over the club with him here continuing. 

That's just my opinion though and I respect that plenty of others with more knowledge than me of the situation will disagree. 

Once again though, I'd re-iterate to go around accusing a business of being crooked without any evidence, is a very unprofessional thing for someone who is very highly regarded in their field to do. The fact that Independent experts who have had access to all of the information have basically shown that claim to be false should really tell you everything you need to know, and if you're incorrectly continuing to use that label against Stephen Pearce then it is obviously going to unfairly sway your opinion on him. Just my take on matters.

Even taking the MSD loan of £20m into account, it is highly plausible that this was covering costs all incurred post Covid, once again making Pearce's comment made in May 2020 truthful at the time it was told.

At what point MM stopped funding the club will never be known (In the last accounts signed off, MM had given written assurances that he would continue to support the clubs financing requirements up to June 2020 at the earliest.) but my guess would be post Covid) What Pearce could do about that I am not sure?

[G STAR RAM]

5 minutes ago, Leeds Ram said:

There are levels and levels. We weren't operating like a Preston or a Coventry or a Luton. We were operating closer to a Villa, Leeds and Stoke model. In my opinion, those models are inherently dangerous and if you don't have billions (which Mel never did) then it adds an extra layer of risk. You add in the 'unique' amortisation policy, selling off PP to the owner at an overinflated price, buying players which it turned out we couldn't fully pay for and the MSD loan it all starts to look like an absolute shambles... which it was. We don't know the full circumstances as to the timeline when Mel decided he'd pull the funding but I doubt he woke up one morning and said 'f*** this I'm pulling the plug'. Rumours had already been circulating that there were financial problems before we went into administration after all. 

I think pretending Pearce had no control over the running of the club as CEO is slightly ridiculous. Also pretending we were run 'just like every other club' isn't exactly true either. We enacted policies to maximise our financial leverage and when the capital ran out the floor dropped out from underneath us. In doing so we alienated other clubs and the organisation running our league who bore a grudge against us until a new owner took over. 

Now personally, I don't think it's good enough for the CEO at the time who still remains in his job merely to say 'I'd rather not discuss it'. Well, I and 30,000 others would rather not have seen the club almost liquidated, the academy pilfered and a relegation forced upon us. I'm sure the people who lost their jobs would rather not have seen that happen and the vendors who lost money would rather have been paid on time and in the full amount. To me it just stinks that he takes that attitude given what has happened. 

Once again you are referring to an over inflated price of the stadium, something which experts in the field and an Independent Disciplinary Commission disagree with.

To form a view, should you not be using facts, rather than your own personal views?