Davefevs Posted August 27, 2020 Share Posted August 27, 2020 @AnotherDerbyFan do you amortisation of £25m in 18/19 or 19/20? If 19/20...have you got access to accounts, or is this a calculation? Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 27, 2020 Author Share Posted August 27, 2020 (edited) 55 minutes ago, AnotherDerbyFan said: The Disciplinary Commission disagree with you. For example, The EFL's 'expert' arrived at the £50m valuation by scaling up costs of stadiums for Morecombe, Chesterfield, Clochester, MK Dons, Doncaster, Shrewsbury, and Burton. He failed to note a variety of differences: built corners, possibility to expand, roof, quality of facilities. Somehow, the 'expert' concluded PPS was "bog-standard", and further devalued the stadium by using average attendance instead of capacity. DRC is usually calculated by multiplying the cost per seat by capacity to attain a new build cost. This figure is then reduced by a depreciation factor to reach the DRC value with land value added on. The panel concluded that anything less than £3000 per seat would be considered basic. As PPS is certainly above basic, £3k is the very minimum that should be used. Guess what... that's the exact figure JLL used to reach the £81.1m value. If you disagree with PPS not being basic, then you need to visit more grounds. The rebuild of your own stadium cost a reported £40-45m, with a capacity of 27,000 - equivalent to cost per seat of £1.67k. However, it was a replacement/refurbishment of the original stadium meaning it was the equivalent to £2.84k for a new stadium. Facilities of your stadium are inferior to ours, and you haven't filled in all corners. This supports the claim that £3k for ours is correct. All accounted for, so nothing to get your knickers in a twist over. Oversight from the club not to clearly define it. It's all out in the open now, and there are clearly no issues with it. Rules say it was acceptable. We weren't alone in doing it. Are you saying recruiting a player of Rooney's calibre means we should increase our sponsorship income? Bizarre that you think increased exposure shouldn't mean more sponsorship. Comes across more like jealousy of not having the pull we do. Most likely a financial issue, but we don't know the full facts. At the at the end of the day, Lawrence and Bennett still have value and could/can still perform the job they're paid to do, whereas Keogh couldn't. With Keogh joining MK Dons I think that's the end of the matter. If the case was still ongoing, we'd still hold his registration and he wouldn't have a club. I can't believe you're trying to argue against a club pursuing loans to cover losses given the coronavirus circumstances. Perhaps if Pearce was on the board much earlier the EFL would be in better shape now. He's clearly well respected by most clubs, hence why he's in the position he is. The fact he's clever enough to see where the rules allow a club to maximise it's potentially shouldn't be considered a bad trait. Other club's follow his lead - they copied our stadium sale, and it's only a matter of time before clubs copy our amortisation policy. There's little benefit in copying what everyone else does, as without parachute payments, it's unlikely you'll earn promotion. Every club should be continuously looking at ways of doing something better than they already are. Finally read the report in full! Pride Park, this was at the time it was built one of many similar grounds built between mid 1990s-early 2000s. The construction cost in 1997 was quite cheap and cheerful. Wiki says £28m. £3k per seat x 33k? Depreciation by 1/3 wasn't it then land value added in. About £70m? Granted the range was £3-3,500 per seat. I'm no valuer but some of his examples were puzzling! Leicester's valuation feels a very good comparable, Coventry? Stoke's ground was built in 1997 and isn't a much lower capacity. Under £50m, £51m (was £60m until naming rights went) and under £50m respectively. Land value may well be cheaper in these places of course. 'Facilities of AG inferior to Pride Park'?? Don't see it myself! That's a laugh and a half. The lack of corners surely is a factor though, as well as lower capacity. On the flipside, land value in Bristol exceeds that of Derby. The roof is a hypothetical and still hasn't AFAIK moved forward so irrelevant. The 2018/19 accounts and beyond will be the decisive factor, but under FRS 102 I am guessing it will be. 1) Oversight? Convenient! IF it was Chansiri and oversight, could well believe it given the mess he made if that! 2) Were the first, I believe. I've a strong view on the issue in general- UEFA rules explicitly exclude fixed asset disposals from FFP so that feels the best approach. 3) What came first? Again, convenient! 4) A grubby financial issue most certainly. How can registration be held if he's been sacked? I hope he plays on and wins just to prove a point. 5) You expressed your liking for the rules in point 2 and alluded to them in point 1. Rules are rules and I'd have to reread the article but a rule is definitely out there somewhere about investment in more than one club. If clubs complain, are EFL not duty-bound to investigate? Totally disagree. It's fair to say your club 'do things differently', of that there can be no doubt! Not in the slightest, because he's on the board of an Executive which wishes to enforce certain regulations and at the same time on the board of a club who use every questionable method in the book to try and circumnavigate it! Sooner clubs can vote him out the better. Don't disagree on Parachute Payments though. They need significant reform minimum. Edited August 27, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 27, 2020 Author Share Posted August 27, 2020 1 hour ago, AnotherDerbyFan said: I can't see us pursuing any legal case based on the claims already made. There may be a case of us pursuing damages due to missing out on investment, being put under a wrongful embargo, missing out on recruitment, and potentially reduced sponsorship. Given the club statement about all clubs being financially punished due to just a few clubs pushing for a penalty, I can't see us dragging things out further and causing more financial reductions to clubs. Hmm, a fairly magnanimous spin. Let's see. I don't really see good grounds for legal action or recompense given that the right to bring the charges themselves was lawful. I recall claims by Derby that it was all unlawful at the time of charge, the Commission seems to have firmly established this NOT to have been the case. The soft embargo is consistent with P&S regulations as a holding position where there is doubt or non-compliance with eg timely submission of Projected Accounts/FFP. Or doubt about whether compliance will be achieved, seems fair enough. Not the EFL's fault. They have to apply regulations fairly, fearlessly and without favour. Seems an irrelevant consideration to me, sponsorship likewise. Had the charges been thrown out in their entirety, then a case would certainly be stronger. Had they been thrown out as unlawful or malicious then absolutely. Except they weren't- many of your defences eg Estoppel fell flat. Would have to read the Club Statement but often Club Statements not unnaturally paint clubs in a favourable light. I'd be surprised if only a few clubs raised concerns. Also, the section on EFL Arbitration. https://www.efl.com/-more/governance/efl-rules--regulations/section-9--arbitration/ 95.1 Membership of the League shall constitute an agreement in writing between the League and the Clubs and between each Club for the purposes of section 5 of the Arbitration Act: To take action, a notice of Arbitration would need to be served. Disputes have to be settled via Arbitration as part of terms of membership, potentially. Quote Link to comment Share on other sites More sharing options...
Hxj Posted August 27, 2020 Share Posted August 27, 2020 1 hour ago, Mr Popodopolous said: Finally read the report in full! Pride Park, this was at the time it was built one of many similar grounds built between mid 1990s-early 2000s. The construction cost in 1997 was quite cheap and cheerful. Wiki says £28m. £3k per seat x 33k? Depreciation by 1/3 wasn't it then land value added in. About £70m? Granted the range was £3-3,500 per seat. I'm no valuer but some of his examples were puzzling! Leicester's valuation feels a very good comparable, Coventry? Stoke's ground was built in 1997 and isn't a much lower capacity. Under £50m, £51m (was £60m until naming rights went) and under £50m respectively. Land value may well be cheaper in these places of course. 'Facilities of AG inferior to Pride Park'?? Don't see it myself! That's a laugh and a half. The lack of corners surely is a factor though, as well as lower capacity. On the flipside, land value in Bristol exceeds that of Derby. The roof is a hypothetical and still hasn't AFAIK moved forward so irrelevant. Simply put the expert appointed by the EFL to value the stadium wrote a poor expert report and was poorly prepared for the hearing. That is the EFL's fault. 1 Quote Link to comment Share on other sites More sharing options...
AnotherDerbyFan Posted August 27, 2020 Share Posted August 27, 2020 (edited) 2 hours ago, Davefevs said: @AnotherDerbyFan do you amortisation of £25m in 18/19 or 19/20? If 19/20...have you got access to accounts, or is this a calculation? It's stated in the Decision document. £6.5 in 17/18, £4.6 in 18/19, £25.1 in 19/20. Page 30, Section 59 1 hour ago, Mr Popodopolous said: Finally read the report in full! Pride Park, this was at the time it was built one of many similar grounds built between mid 1990s-early 2000s. The construction cost in 1997 was quite cheap and cheerful. Wiki says £28m. Which doesn't take in to account work completed later on. £28m covers initial build, then filling in of the corners. Quote £3k per seat x 33k? Depreciation by 1/3 wasn't it then land value added in. About £70m? Granted the range was £3-3,500 per seat. On a DRC basis the final amout using those figures was £74.4m (missing £3m due to feeds and finance costs) Quote I'm no valuer but some of his examples were puzzling! Leicester's valuation feels a very good comparable, Coventry? Stoke's ground was built in 1997 and isn't a much lower capacity. Under £50m, £51m (was £60m until naming rights went) and under £50m respectively. Land value may well be cheaper in these places of course. 'Facilities of AG inferior to Pride Park'?? Don't see it myself! That's a laugh and a half. The lack of corners surely is a factor though, as well as lower capacity. On the flipside, land value in Bristol exceeds that of Derby. The roof is a hypothetical and still hasn't AFAIK moved forward so irrelevant. I can only assume you don't visit away grounds. When was the last time you visited Derby? 'Similar' ground such as Stoke, Southampton, Middlesbrough and even Swansea are considerably below the standard of PPS, despite being built to a similar style and by the same people - mainly due to the improvements made in the last few years. Considerations for stadium valuation are: Corners Structure - cantilevered roof (this is what I was referring to, not the propose roof upgrade), with unrestricted views Facilities including hospitality, boxes, 'back of house' offices, club shop, restaurant, etc... Potential to expand Pitch composition and under-soil heating Concourse heating Superior seating (West Stand only) LED advertising boards Sound system Enhanced floodlights Media rooms and camera positions Did you consider land area might differ? I could be mistaken but i'm fairly sure PPS is a larger land area than Ashton Gate Quote The 2018/19 accounts and beyond will be the decisive factor, but under FRS 102 I am guessing it will be. 1) Oversight? Convenient! IF it was Chansiri and oversight, could well believe it given the mess he made if that! The detail didn't seem to be that much different than other clubs. It's an simple oversight to not describe it in full detail. It only took the EFL the best part of 5 years from when we implemented it (with permission) for it to be brought up. 3 years since the accounts were released. Quote 2) Were the first, I believe. I've a strong view on the issue in general- UEFA rules explicitly exclude fixed asset disposals from FFP so that feels the best approach. We aren't in a UEFA competition. Not sure why you keep bringing their rules up to imply we should be following them instead. You aren't advocating using their 30mEUR limits instead of our £39m. As things stand, the EFL rules allow it. Quote 3) What came first? Again, convenient! One came as a result of the other. A clause in the sponsorship contract which allowed us to negotiate a better deal if we sign a 'star' player. Quote 4) A grubby financial issue most certainly. How can registration be held if he's been sacked? I hope he plays on and wins just to prove a point. Keogh appealed the sacking. Until the case was closed the club must keep hold of his registration. Quote 5) You expressed your liking for the rules in point 2 and alluded to them in point 1. If an owner has cash flow problems he shouldn't be permitted to seek a loan. You're just asking for financial ruin in current circumstances. Quote Rules are rules and I'd have to reread the article but a rule is definitely out there somewhere about investment in more than one club. If clubs complain, are EFL not duty-bound to investigate? Nothing about loaning to multiple clubs, hence nothing was made of the same company loaning to Southampton and Sunderland. The issue is down to having a significant share of multiple clubs, which only becomes a concern if Derby and Sunderland default on the loans. Edited August 27, 2020 by AnotherDerbyFan 2 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 27, 2020 Author Share Posted August 27, 2020 (edited) Been to a few away grounds, I'll get onto the rest of your post later but it seems that the PL would like to block the loophole now- I think it would find favour because the PL clubs can't benefit on a UEFA level from it so it's pointless. https://www.dailymail.co.uk/sport/football/article-8667811/Premier-League-seek-BLOCK-clubs-selling-grounds-leasing-back.html Blocking the profit aspect of the loophole for FFP as opposed to the loophole itself feels the best way to go here. Hope he's right! I wonder what would happen if it's written out going into 2020/21 but a club has already done it in 2018/19 say? On a sidenote, Matt Hughes appears not to like Derby very much- lot of their fans think so anyway. Strong moral compass? Listening to Talksport catchup, Simon Jordan and FFP. Jim White is a bit of a shill for Mel Morris isn't he. Maybe there should be a rule that says ONLY what a third party will pay in terms of sale and leaseback- ie what a finance company, a bank- and what they would charge in rent. Truly arms length. https://www.examinerlive.co.uk/sport/football/news/sheffield-wednesday-efl-profitability-sustainability-18830908 Here is a bit more detail on the planned changes. Edited August 27, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Davefevs Posted August 27, 2020 Share Posted August 27, 2020 (edited) Ta. Here’s the link for anyone else. Amortisation “stuff” from pg21. https://www.efl.com/siteassets/efl-documents/youth-alliance/200824---efl-v-derby-county--decision.pdf @Mr Popodopolous it looks like the £25.1m amortisation in 19/20, is the end of the can being kicked down the road. As a process / practice, I think it’s more sensible, even if it was standardised as 10% for each year up to C-1 (C = Contract end) So a 3 year deal with be: 10, 10, 80 A 4 year deal, 10, 10, 10, 70 etc. Obviously club should state amortisation model in advance. Edited August 27, 2020 by Davefevs 1 1 Quote Link to comment Share on other sites More sharing options...
Harry Posted August 27, 2020 Share Posted August 27, 2020 15 hours ago, reddoh said: hope that was in ffp and not one up manship? Cash. Straight into the pocket of my Romanian (Transylvanian) friend. I can subvert the system as well as any dodgy football chairman!! 1 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 27, 2020 Author Share Posted August 27, 2020 (edited) Paragraph 59 is interesting- already partially covered by Dave. Quote 59) For completeness, we record that there was discussion about the Club’s approach to amortisation between the Club and the EFL in April and May 2019: a) In April 2019, as part of the process of reviewing the Club’s 2019 P&S Submission, the EFL wrote to the Club with various queries. Question 17 was in the following terms: 30 ‘Can you please explain the variances in Player related amortisation charges from £6.5m in 2017/18 down to £4.6m in 2018/19 up to £25.1m in 2019/20? As part of this, please explain how the charge reduces from £3.3m in the 6 months to December 2018 down to £1.2m in the 6 months to June 2019? The reason that Paragraph 59 a) is interesting to me is that how do you lose in excess of £30m with such a low amortisation charge!! Because elsewhere in the written reasons I'm sure it mentioned a massive loss for 2018/19 or forecast loss anyway- perhaps that loss came down a bit with playoff final and Lampard compensation. Or is that the consolidated accounts losses, as that would make more sense. Quote 67) At around the same time, in spring 2018, the Club provided financial information to the EFL in accordance with the P&S Rules (‘the Club’s P&S Information’) for the 36 month reporting period to 30 June 2018. The Club’s P&S Appendix 1 Form, provided as part of the Club’s P&S Information, recorded a) A loss before tax for T-2 (year to 30 June 2016) of £14,725,00015 with Adjusted Earnings Before Tax of (-£9,019,000) b) A loss before tax for T-1 (year to 30 June 2017) of £7,873,00016 with Adjusted Earnings Before Tax of (-£4,686,000) c) A forecast loss before tax for T (year to 30 June 2018) of £27,445,000 with Adjusted Earnings Before Tax of (-£23,970,000) 68) The Club’s actual/forecast aggregated loss before tax for T, T-1 and T-2 was thus £50,043,000 and its actual/forecast Adjusted Earnings Before Tax for T, T-1 and T-2 was thus (-£37,675,000). That aggregate figure for Adjusted Earnings Before Tax was in excess of the LLT and very close to the ULT Quote 69) On 12 April 2018 the EFL wrote to the Club raising various queries about the Club’s P&S Information. The Club responded on 25 April 2018, enclosing a revised P&S Appendix 1 Form That revised P&S Appendix 1 Form recorded a) A loss before tax for T-2 (year to 30 June 2016) of £14,725,000 with Adjusted Earnings Before Tax of (-£15,271,000)17 b) A loss before tax for T-1 (year to 30 June 2017) of £7,873,000 with Adjusted Earnings Before Tax of (-£4,686,000) c) A forecast loss before tax for T (year to 30 June 2018) of £27,445,000 with Adjusted Earnings Before Tax of (-£23,970,000) The Club’s actual/forecast aggregated loss before tax for T, T-1 and T-2 was thus still £50,043,000, but its actual/forecast Adjusted Earnings Before Tax for T, T-1 and T-2 had become (-£43,927,000). That aggregate figure for Adjusted Earnings Before Tax had thus become a figure in excess of the LLT and the ULT. T-2 shows a change and the reason seems to be as follows- makes more sense. Quote Little Addition 17 The figure had been revised to remove an impermissible ‘add back’ that reflected a Transaction with a Related Party That would be the loan cancellation? Just a thought on Governance, but given the regulations allow for in-season breaches to be punished accordingly there and then- surely the March figures should be the ones for FFP purposes? Fair Value on a profit or a DRC basis? The latter feels more apt to me! I don't think the EFL should have budged on the £74.4m vs £81.1m that's for sure. Now here comes the reason for my shock at the losses given the flex downwards in amortisation! Quote 101) On 29 March 2019 – the date on which the Annual Report and Financial Statements of the Club and its parent for the year ended 30 June 2018 - the Club provided its 2019 P&S Submissions to the EFL. The P&S Appendix 1 form provided with the 2019 Submissions a) Recorded a loss before tax for T-2 (year to 30 June 2017) of £20,575,000 with Adjusted Earnings Before Tax of (-£13,407,000) b) Recorded a loss before tax for T-1 (year to 30 June 2018) of £1,146,000 with Adjusted Earnings Before Tax of £7,207,000 c) Recorded a forecast loss before tax for T (year to 30 June 2019) of £38,727,000 with Adjusted Earnings Before Tax for T of (-£31,517,000) The Club’s actual/forecast aggregated loss before tax for T, T-1 and T-2 was thus £60,448,000 and its actual/forecast Adjusted Earnings Before Tax for T, T-1 and T-2 was (-£37,717,000). That aggregate figure for Adjusted Earnings Before Tax was accordingly in excess of the LLT but below the ULT Based on what I've read through the reasons, I as a neutral observer am perfectly comfortable with the view that the EFL were entitled to place soft embargoes on Derby for a variety of reasons. Quote Acknowledging that, in light of the receipt by the Club of substantial compensation following the departure of its first team manager and staff to Chelsea, the Club’s 3 year aggregate figure for Adjusted Earnings Before Tax was ‘circa £37.1m’ I honestly thought Derby would've got more compensation than that for Lampard and co! Looks to have been about £600k or so! Edited August 27, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 27, 2020 Author Share Posted August 27, 2020 (edited) I suppose I would ask the question. Disposal- or even disposal and leaseback on the open market- would Pride Park yield £81.1m with a £1.1m annual rent- I very much doubt it! Likewise, in what world would Hillsborough fetch £60m and an unknown rent? Edited August 27, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
AnotherDerbyFan Posted August 27, 2020 Share Posted August 27, 2020 @Mr Popodopolous My rough calculation process... Using 2018 P&S losses as a base point: £7,207,000 Subtract the stadium profit, profit on players, managers and amortisation from 2018: £7,207,000 - £39,940,387 - £3,719,424 - £1,850,000 + £6,540,038 = -£31,762,773 Add on the confirmed amortisation and stadium rent in 2019: -£31,762,773 - 4,600,000 - 1,139,726 = -£37,502,499 Add on estimated profit on players (The club received fees for Vydra, Weimann, Jerome): -£37,502,499 + £4,000,000 = -£33,502,499 Minus a rough estimate on change to wages: -£33,502,499 + £6,000,000 = -£27,502,499 £4m off the stated £31.5m in March 2019. Lampard joined Chelsea in July, so I didn't think the compensation would fall under 18/19, but 19/20 instead. Rumours at the time were about £4m. 1 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 27, 2020 Author Share Posted August 27, 2020 (edited) The profit is curious given the amortisation model chosen- wage bill down by £6m in 2018/19? Your own accounts state in terms of post balance sheet events- talking about the profit on disposal here. Appears on both the Derby County and Sevco 5112 accounts. Quote 27. Post balance sheet events In the period since the end of the financial year the Company has entered into agreements to dispose of first team players with a net book value of £12,819,777 for £11,704,300. There's more about purchases in it too but not particularly interested in that. Post balance sheet I take to be between July 1st 2018 and the accounts being published- but in this instance, it could both Summer 2018 and winter 2019 windows? Fee received-net book value is the usual formula but I guess this changes with residual value? Edited August 27, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
AnotherDerbyFan Posted August 27, 2020 Share Posted August 27, 2020 4 minutes ago, Mr Popodopolous said: The profit is curious given the amortisation model chosen- wage bill down by £6m in 2018/19? Changes between 17/18 and 18/19... Wages removed: Russell (1/2 season), Palmer (1/2 loan), Vydra, Weimann, Shackell (minus 1/2 season loan in 17/18), Blackman, Lowe (loan), Jerome (1/2 season), Martin (minus 1/2 season loan in 17/18), Baird, Bent (minus 1/2 season loan in 17/18), Pearce (1/2 season), Thorne (1/2 season), Butterfield (1/2 season loan), Ledley (1/2 season) Wages added: Waghorn, Marriott, Jozefzoon, Holmes, Evans, Wilson, Mount, Tomori, Cole (1/2 season), King (1/2 season), Ambrose (1/2 season) 4 minutes ago, Mr Popodopolous said: Your own accounts state in terms of post balance sheet events- talking about the profit on disposal here. Appears on both the Derby County and Sevco 5112 accounts. There's more about purchases in it too but not particularly interested in that. Post balance sheet I take to be between July 1st 2018 and the accounts being published- but in this instance, it could both Summer 2018 and winter 2019 windows? Fee received-net book value is the usual formula but I guess this changes with residual value? I guess the profit on players is the difference between mine and the official figures. Strike my £4m profit of and we're bang on the money. According to transfermarkt, Vydra, Weimann and Jerome were signed for a combined £13.5m minus a bit of amortisation them it won't be far off £12.8m. Surprised we only sold them for £11.7m when Vydra was rumoured at about £11m, Weimann at £2m and Jerome £1-1.5m. 1 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 27, 2020 Author Share Posted August 27, 2020 2 minutes ago, AnotherDerbyFan said: Changes between 17/18 and 18/19... Wages removed: Russell (1/2 season), Palmer (1/2 loan), Vydra, Weimann, Shackell (minus 1/2 season loan in 17/18), Blackman, Lowe (loan), Jerome (1/2 season), Martin (minus 1/2 season loan in 17/18), Baird, Bent (minus 1/2 season loan in 17/18), Pearce (1/2 season), Thorne (1/2 season), Butterfield (1/2 season loan), Ledley (1/2 season) Wages added: Waghorn, Marriott, Jozefzoon, Holmes, Evans, Wilson, Mount, Tomori, Cole (1/2 season), King (1/2 season), Ambrose (1/2 season) I guess the profit on players is the difference between mine and the official figures. Strike my £4m profit of and we're bang on the money. According to transfermarkt, Vydra, Weimann and Jerome were signed for a combined £13.5m minus a bit of amortisation them it won't be far off £12.8m. Surprised we only sold them for £11.7m when Vydra was rumoured at about £11m, Weimann at £2m and Jerome £1-1.5m. Always thought Vydra alone though could be misremembering was about £12m! I'll go with what you say of course. Ah you're talking about P&S losses of course? I was thinking in terms of accounting losses alone! That explains that then. Wage fall would make sense- I remember believing a year back that Vydra and Weimann being replaced by Marriott and Waghorn for example would work out cheaper on that score. 1 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 27, 2020 Author Share Posted August 27, 2020 (edited) Interesting line from elsewhere. Dom Howson transfer Q&A- this bit jumps out a bit. Could mean in terms of EFL involvement with Wigan of course but if not...could mean they have to run deals past the EFL to some extent! Rightly so too if that's what it means, given how Chansiri rolled the dice with Rhodes in 2017/18! Quote As I reported last week, a transfer fee has been agreed for Windass. However, the deal is complicated and not straight forward. Wednesday are not just dealing with Wigan. They are dealing with Wigan's administrators and the EFL as well so that has slowed everything down. But I know Wednesday remain cautiously optimistic they will get the transfer done and over the line. On a general note, my reading of the regulations is that the EFL have the absolute right to look a bit closer at a club, any club if 3 year adjusted losses exceed £15m to the existing season provided there is no total profit in the prior 2 seasons of accounts The absolute right to get further involved if they are not convinced about a clubs intent and compliance. Clearly the big trigger for referral to an IDC is breaching the upper limits but there are multiple layers. It's unclear but if a club was under guidance and went ahead and disregarded in a stupid and flagrant way- even if under £39m- could they theoretically be referred to IDC? Edited August 27, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 28, 2020 Author Share Posted August 28, 2020 (edited) May as well take a look at some of the legal claims and rebuttals. Derby as we know in mid January, put out quite the astonishing statement about the lawfulness and legality of the right to bring the charges- and of the charges themselves. https://www.dcfc.co.uk/news/2020/01/club-statement-17th-january-2020 Quote As a matter of law, the EFL is not entitled to bring either of the charges, having previously agreed to all of the arrangements surrounding the stadium sale and never having raised the issue of player amortisation before. The Club shall argue that the very bringing of the Charges itself is unlawful. Not necessarily. Quote The EFL can choose to correct what they now see as an error in their decisions. However, it cannot punish the Club for its own errors. The Club shall therefore vigorously contest the charges and the EFL’s legal right to bring them. The Club and all staff will be making no further comment on these matters. I wonder if there are grounds of appeal the EFL had not considered- or was the choice of valuer, and to an extent Accountancy expert, wholly what did for them? Before I get onto substance, some of Mel Morris's early claims are laughable. Persecution complex slightly? Quote a) Mel Morris. Mr Morris has throughout the relevant period been the owner and Chairman of the Club. He gave evidence about his purchase of Pride Park from the Club and the background to that sale. His witness statement also contained a considerable amount of evidence about the Club’s wider relationship with the EFL – a relationship which he characterises as i) Involving ‘dislike’ of him and the Club by the EFL ii) Him being an ‘enemy of the EFL state’, and iii) The EFL having an ‘axe to grind against [him] personally’ 'Enemy of the EFL state'? Joker! Clownish comment. Quote Regardless of how Mr Morris might perceive the way that he and the Club are viewed by the EFL, we reject any suggestion that the EFL’s factual evidence was in any way tainted by animosity or dislike (and, for the avoidance of doubt, reject any suggestion that such animosity or dislike was established on the evidence before us), or that the EFL’s factual evidence was in any way unreliable as a result. Rightly so too! Edited August 28, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 28, 2020 Author Share Posted August 28, 2020 (edited) On a side note, I believe the EFL have made an error with their reform of FFP- clubs should not be allowed to wangle out- see Reading. Of course if clubs voted for it... Why they appear to have lifted a soft embargo on Reading given their position...? Talking of possible EFL errors, I wonder how things pan out if they approach this aspect differently: Quote c) Thirdly, the EFL gave the Club no opportunity to have the 6 January 2020 determinations by the Executive reviewed by a Disciplinary Commission pursuant to P&S Rule 6. Having made those determinations on 6 January 2020 the EFL did not communicate the fact of those determinations to the Club prior to charging the Club. Might such a panel have come to a different decision with respect to the £81.1m thereby opening the door to punishment in these proceedings? Though probably not! Still wonder if a different EFL approach might have seen things take a different path though. Quote d) Fourthly, both the EFL and the Club have consistently treated these proceedings as proceedings pursuant to section 8 of the EFL Regulations, not as ‘review proceedings’ under P&S Rule 6.2. By way of example i)On 30 January 2020 the Club served a ‘summary response’ pursuant to EFL Regulation 89.3. That summary response made it clear that the complaint was not admitted, thus triggering the referral to a Disciplinary Commission ‘for it conduct a full hearing in respect of the complaint’ in accordance with EFL Regulation 91.4 ii) The proceedings have been conducted in accordance with Appendix 2 to the EFL Regulations Could the opportunity to review have seen a different trajectory? Had the review determined Pride Park to be say £65m then they fail FFP to 2019 and the Executive's restatement stands. Possible EFL made an error? Edited August 28, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 28, 2020 Author Share Posted August 28, 2020 (edited) Now for some legal defences. These are just key snippets, feel free to read at leisure etc. The first set-ie the defences for the First Charge! Procedural Defence 1: EFL had already determined Fair Market Value prior to January 2020 Procedural Defence 2: the First Charge is ultra vires A further Procedural Defence relying on Ultra Vires: the 14 day period. Perhaps Part 2 of ultra vires. Procedural Defence 3: Contractual Estoppel Procedural Defence 4: Estoppel by Convention Procedural Defence 5: Legitimate Expectation Procedural Defence 6: No Annual Accounts Procedural Defence 7: Abuse of Process Quote c) Dealing briefly in turn with each Representation relied on by the Club in its Response: i) Representation 1 does not take the Club anywhere. That representation did nothing more than confirm the position under the P&S Rules, as interpreted by the EFL (i.e. that profits from the sale of a stadium at Fair Market Value could be included for the purposes of satisfying the P&S Rules) ii) Representation 2 was not absolute in the terms suggested by the Club. The EFL at no time represented that, provided the Club provided an ‘independent valuation’ of the Stadium, it (the EFL) would accept for all time and for all purposes whatever figure was stated therein as being Fair Market Value iii) Representation 3 was similarly not in the absolute terms alleged. The EFL never made a representation to the effect that the 2018 JLL valuation had been ‘accepted by the EFL as satisfactory’ for all purposes, or that ‘it’ (whatever ‘it’ might have been) was a Fair Market Value iv) Representation 4 was indeed an assurance by Mr Karran that the EFL would permit the Club to contend subsequently that the Fair Market Value of Pride Park was £81.1m. It was not however any form of assurance that the EFL was accepting that the Fair Market Value of Pride Park was at least £74.4 for all purposes; as Mr Karran made clear, the EFL was using that figure at that time only for the purpose of ‘getting the Club through the process’ that was at that time going on v) We reach the same conclusion in relation to Representation 5. Mr Karran’s email cannot sensibly be interpreted (and nor do we find it was interpreted by the Club) as an unequivocal promise or representation that the EFL accepted for all purposes and for all time that the Fair Market Value of Pride Park as at June 2018 was at least £74.4 68 vi) Representation 6 was not an unequivocal promise or representation that the Club ‘had complied with the P&S Rules for the 2017/18 Period …’ for all purposes, such that the EFL could not ‘go back on’ the same. As the Club well appreciated, consideration of P&S Submissions was (and would be) an ongoing process Half dozen claims in defence, all rejected by the Tribunal! This next one is a bit of a belter! Quote vii) Procedural Defence 6: No Annual Accounts This Procedural Defence depends on a finding – necessary, the Club says, if the Second Charge is to succeed - a) That because the financial statements filed by the Club do not (on the EFL’s case) comply with FRS 102 and so do not comply with ‘all legal and regulatory requirements applicable to accounts pursuant to section 394 of the Companies Act 2006’, they are not ‘Annual Accounts’ for the purpose of the P&S Rules b) The Club has accordingly not filed any Annual Accounts for the purposes of the P&S Rules for the years under scrutiny Quote 160) The EFL’s description of that position is ‘arid and technical’ is in our view a correct one. It is also a position that has no merit. Even if we were to conclude that, because they failed to comply with FRS 102, the Club’s Annual Accounts did not comply with the relevant legal and regulatory requirements, that would not mean a) That the Club had failed to submit Annual Accounts per se. It would simply mean that the Club had failed to submit compliant Annual Accounts b) That the EFL was somehow prevented from considering the submitted documents for the purpose of i)Assessing whether the ULT had been exceeded by the Club for the years under scrutiny or ii) Considering whether Related Party Transactions recorded therein were or were not recorded at Fair Market Value Basically, the club appear to have claimed that because the accounts may or may not have hit FRS 102 standards, the EFL cannot therefore charge them with breaching FFP or even assess the issue! Quote viii) Procedural Defence 7: Abuse of Process 161) At the heart of this defence is a belief on the part of the Club that the First Charge has been brought against it because the EFL a) Has improperly succumbed to pressure from MFC (and other clubs), and b) Has brought the Charge solely or principally to prevent MFC from pursuing the MFC proceedings against it Quote 164) Having carefully considered the evidence – both the contemporaneous documentation and the oral evidence given by the EFL’s witnesses – we had no hesitation in rejecting the Club’s analysis/suggested interpretation of the evidence contained in its written Closing Submissions and concluding that the Club failed to make out this defence on the facts: Quote 168) We therefore find that the Club did not establish that the bringing of the First Charge was an abuse of process. ix) Conclusions on the Procedural Defences to the First Charge 169) We dismiss each of the Procedural Defences to the First Charge raised by the Club 8 Procedural defences, 8 rejections! Edited August 28, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 28, 2020 Author Share Posted August 28, 2020 (edited) Second set of Procedural Defences- as in the Procedural Defences for Charge 2. Procedural Defence 1: there is no breach of any substantive P&S Rule even on the EFL’s case Procedural Defence 2: Ultra Vires for previous determination Procedural Defence 3: Inconsistency of the Charges Procedural Defence 4: Legitimate Expectation – previous determination Procedural Defence 5: Legitimate Expectation – Sanctioning Guidelines Procedural Defence 6: Abuse of Process The defences- in a nutshell. Quote vii) Conclusions on the Procedural Defences to the Second Charge 230) We dismiss each of the Procedural Defences to the Second Charge raised by the Club. So those rather drastic and bombastic claims by the club about unlawfulness, unable to even bring charges, unable to change mind etc etc- these were proven to be a load of rubbish! Across two charges, 14 Procedural Defences raised and 14 knocked away by the Commission! Edited August 28, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 28, 2020 Author Share Posted August 28, 2020 (edited) May as well turn things on their head a little. Plenty of talk about clubs suing the EFL but tbh this contains a bit of devil's advocate let's say. Can organisations be defamed? I have read that the answer could be yes. Could it plausibly be argued that some degree of defamation has occurred given that Derby- not privately but publicly in a statement to the world- declared that 'As a matter of law, the EFL is not entitled to bring these charges'. Does that not de facto if not directly, accuse the EFL in acting in a manner outside of the law? Not something anyone surely would want their organisation to be accused of? 'The Club shall therefore vigorously contest these charges and the EFL's legal right to bring them'. Again, a public loud and manifestly false or maybe erroneous accusation that the EFL do not have the legal right to bring the charges for the case in question! Plus, Mel Morris at the tribunal. Arguing that the EFL have it in for him personally. Maybe the right to do this openly is protected by the Hearing, legal privilege etc? Accusing the organisation of fake charges at least in part due to a personal dislike of him or the club? That said legal privilege? Sure he named Nick Craig and Shaun Harvey, these two I'm particular. I wonder if any of these therefore have scope to pursue legal action of their own- be it EFL or individuals- against Derby, or more accurately Mel Morris. Like I say, stuff in Tribunal or similar surely protected by free speech, legal privilege? Edited August 28, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Phileas Fogg Posted August 28, 2020 Share Posted August 28, 2020 3 hours ago, Mr Popodopolous said: May as well turn things on their head a little. Plenty of talk about clubs suing the EFL but tbh this contains a bit of devil's advocate let's say. Can organisations be defamed? I have read that the answer could be yes. Could it plausibly be argued that some degree of defamation has occurred given that Derby- not privately but publicly in a statement to the world- declared that 'As a matter of law, the EFL is not entitled to bring these charges'. Does that not de facto if not directly, accuse the EFL in acting in a manner outside of the law? Not something anyone surely would want their organisation to be accused of? 'The Club shall therefore vigorously contest these charges and the EFL's legal right to bring them'. Again, a public loud and manifestly false or maybe erroneous accusation that the EFL do not have the legal right to bring the charges for the case in question! Plus, Mel Morris at the tribunal. Arguing that the EFL have it in for him personally. Maybe the right to do this openly is protected by the Hearing, legal privilege etc? Accusing the organisation of fake charges at least in part due to a personal dislike of him or the club? That said legal privilege? Sure he named Nick Craig and Shaun Harvey, these two I'm particular. I wonder if any of these therefore have scope to pursue legal action of their own- be it EFL or individuals- against Derby, or more accurately Mel Morris. Like I say, stuff in Tribunal or similar surely protected by free speech, legal privilege? At 5am whilst most of OTIB sleeps, @Mr Popodopolous is diligently researching FFP so the rest of us don’t have to. Thank you sir! 2 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 28, 2020 Author Share Posted August 28, 2020 (edited) Shifts will do that. Some actual news, reports or claims. Claim: *Had P&S been scrapped, a cap could have been voted in. However other clubs who complied were never going to agree to that! EFL are said to be committed to the regulations until the end of next season. Some clubs still remain angry over the use of loopholes. *Many clubs have privately accused Derby, Reading and Sheffield Wednesday of cheating the system. (I don't get why the EFL incidentally appear to have lifted Reading's soft embargo)! *EFL are considering an appeal, and several other clubs are considering legal action. Against whom is the question! The good news is that the EFL are looking at trying to exclude stadium profits from calculations and perhaps more significantly but under the radar, are looking at tightening up of amortisation rules. https://www.dailymail.co.uk/sport/football/article-8671899/SPECIAL-REPORT-One-year-Burys-expulsion-Football-League-CRISIS.html That covers a lot but pulled out some key bits for our level and FFP. Edited August 28, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 28, 2020 Author Share Posted August 28, 2020 Just a quick reminder of Reading. Before legitimate exclusions but inclusive of profit on disposal of everything basically! Players fine, fixed assets nah. 2017/18 and 2018/19 Reading FC I think had losses of £50m. If we use Renhe Sports Management Co Ltd it's £40-41m I think. The latter includes £29m of fixed asset sales/sale and leaseback, and £3m Aluko loan fee, the former includes £14-15m of fixed asset sale/sale and leaseback and the loan fee. Both fairly atrocious. Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 28, 2020 Author Share Posted August 28, 2020 (edited) Hi @AnotherDerbyFan Opinions on all 14 defences being knocked back by the Panel? Certain statements by Derby were therefore at best somewhat mistaken, and at best a pack of lies. Aspects seemed scurrilous to me. I'll go with at best tbh. Edited August 28, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 28, 2020 Author Share Posted August 28, 2020 (edited) Edit- Uncalled for, They strike me as a fairly shameless entitled fanbase however, based on some Internet sites. Cretinous one eyed bunch on DCFCFans and the wider Internet. Some of them anyway- perhaps a sizeable number but certainly not all. https://dcfcfans.uk/topic/35123-tribunal-update/ Edited August 28, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 28, 2020 Author Share Posted August 28, 2020 (edited) Found the bit about Middlesbrough. Quote viii) Procedural Defence 7: Abuse of Process 161) At the heart of this defence is a belief on the part of the Club that the First Charge has been brought against it because the EFL a) Has improperly succumbed to pressure from MFC (and other clubs), and b) Has brought the Charge solely or principally to prevent MFC from pursuing the MFC proceedings against it. 162) It is uncontroversial a) That civil proceedings pursued for an improper ulterior purpose are an abuse of process and liable to be struck out: Goldsmith v Sperrings [1977] 1 WLR 478 @ p503 b) That abuse of power by a prosecutor can justify criminal proceedings being stayed: R v Beckford [1996] 1 Cr App R 94 @ p100-101 c) That a decision to prosecute a criminal charge dictated by ‘some irrelevant consideration’ is vulnerable to challenge: The Cheng Poh v Public Prosecutor of Malaysia [1980] AC 458 @ 475. 163) We accept that similar principles would apply in disciplinary or regulatory proceedings. Charges brought against an entity a) Because the prosecuting authority had been improperly influenced to do so by an irrelevant consideration, or b) For an improper purpose would be liable to be dismissed as being abusive. 164) Having carefully considered the evidence – both the contemporaneous documentation and the oral evidence given by the EFL’s witnesses – we had no hesitation in rejecting the Club’s analysis/suggested interpretation of the evidence contained in its written Closing Submissions and concluding that the Club failed to make out this defence on the facts: a) It is correct, as the EFL has always accepted, that complaints from MFC (and other clubs) about i)the EFL’s willingness per se to allow clubs to include profits from the sale of stadia for the purpose of P&S submissions, and ii) the sale of Pride Park having taken place at a price of £81.1m prompted it in 2019 to consider both matters b) There is nothing inappropriate or improper about that. Investigations are frequently begun as a result of complaints by third parties c) Those investigations included the appointment of WHE. While there was much crossexamination about i) The precise purpose for which that appointment was made, and ii) What occurred at a presentation given by WHE in October 2019 that cross-examination got the Club nowhere. There was nothing inappropriate in the instruction of WHE or the role played by WHE d) Having decided to consider both matters, the EFL’s own investigations (primarily the commissioning of the 2019 WHE report) led it to conclude i)That the Fair Market Value of Pride Park had been significantly less than £74.4m/£81.1m as at June 2018 ii) That the consideration recorded in the Club’s Annual Accounts for the sale of Pride Park should accordingly be restated iii) That by virtue of such restatement the Club had exceeded the ULT for each of the 3 year periods when the 2017/18 Annual Accounts were T and T-1 e) Having reached that conclusion, the proper application of the P&S Rules (in particular P&S Rule 2.9) leads inevitably to a referral to a Disciplinary Commission in accordance with section 8 of the Regulations i.e. to the initiation and prosecuting of disciplinary proceedings. 165) It is of course true that in parallel with those investigations a) MFC commenced the MFC proceedings (despite the EFL’s best efforts to persuade it not to do so, particularly while the EFL’s investigations were ongoing), and b) The Club and MFC reached the agreement to stay the MFC proceedings recorded in the 29 November 2019 letter. 166) However, we reject the suggestion that such matters in any way improperly influenced the EFL into initiating or pursuing the First Charge against the Club when it would not otherwise have done so: a) As at 29 November 2019 the EFL’s investigations into the Fair Market Value of Pride Park were ongoing. The 2019 WHE Report was imminent - it was dated 2 December 2019, the next working day after 29 November 2019 – and is inconceivable that as at 29 November 2019 the EFL was unaware that the 2019 WHE Report would not support a Fair Market Value of £81.1m. Mr Craig effectively accepted as much in cross-examination. It was thus inevitable that the EFL would, in light of that, need to undertake the restatement process required by the P&S Rules 75 b) We see nothing objectionable in the EFL having agreed a stay of the MFC proceedings while that was undertaken. Indeed, there would have been nothing objectionable in the EFL agreeing a stay of the MFC proceedings per se even had the investigations been at a much earlier stage and the EFL been unaware whether there might be any need for it to embark on a restatement process pursuant to the P&S Rules c) The 29 November 2019 agreement did not oblige the EFL to pursue a charge against the Club. It simply made the stay of the MFC proceedings conditional on the EFL doing so – in other words, it provided that if the EFL did not pursue disciplinary proceedings against the Club, MFC would be free to reactivate and pursue the MFC proceedings against the EFL d) The EFL did not irrevocably commit to charging or prosecuting the Club; it simply confirmed that it would do so if, having complied with P&S Rules 2.3 & 2.4, the aggregation of the Club’s Adjusted Earnings Before Tax in 2017/18 and/or any other season resulted in a loss that exceeded the ULT in accordance with P&S Rule 2.9. In other words, the confirmation given by the EFL in the 29 November 2019 was nothing more than confirmation that i)It would comply with P&S Rules 2.3 and 2.4 – something that it was obliged to do in any event ii) If that process resulted in Rule 2.9 of the P&S Rules being triggered, it would commence disciplinary proceedings against the Club – again, something that was a mandatory consequence of a finding that the aggregation of the Club’s Adjusted Earnings Before Tax in 2017/18 and/or any other season resulted in a loss that exceeded the ULT: P&S Rule 2.9.2. 167) Put simply, we reject the Club’s contention that the First Charge was brought against it by the EFL to ‘buy off’ the MFC proceedings, or to secure some form of actual or perceived benefit vis a vis MFC, or because of pressure from MFC. We reject the suggestion that the terms on which the MFC proceedings were stayed represented ‘an extraordinary bargain‘ by the EFL, or that it created ‘stark conflicts of interest‘ as the Club has contended. That was not, we find, the case: a) The motivation for the EFL agreeing to stay the MFC proceedings as it did was, we find, to potentially avoid having 2 sets of proceedings addressing the same subject matter running parallel to one another. That was sensible; indeed, the 29 November 2019 agreement records the desirability of avoiding that outcome b) The spectre of the MFC proceedings played no part, or certainly no material part, in the EFL’s decision to bring the First Charge against the Club: i)The EFL investigated the Fair Market Value of Pride Park without influence or interference from MFC ii) Having done that, the EFL considered its obligations under the P&S Rules without influence or interference from MFC. It did so at the 6 January 2020 meeting to which we have referred above, and it did so without any mention of MFC or the MFC proceedings being made iii) Having done that, the EFL concluded that the ULT had been exceeded for the relevant 3 year periods (with the 2017/18 year as T and T-1) iv) Having reached that conclusion, a referral to the Disciplinary Commission – the initiation and pursuit of a charge – was mandatory under the P&S Rules. 168) We therefore find that the Club did not establish that the bringing of the First Charge was an abuse of process In short, Middlesbrough's pressure was perhaps an irrelevant consideration- or deemed so by the Commission in any event. Edited August 28, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 28, 2020 Author Share Posted August 28, 2020 Reading again. Swiss Ramble. The two relevant ones here are 2017/18 and 2018/19. The way it is laid out is slightly confusing but the Headline loss- ie before Tax- is inclusive of the Stadium and Training Ground transactions. Were they not to be included- then that would've put them on the same overspend as Sheffield Wednesday- reports suggest that an investigation still ongoing into Reading but it's unclear. However irrespective of the Fixed Asset transactions, it's totally true to say they have a problem. Remember too, the £3m loan fee for Aluko. If I was in particular Birmingham or Sheffield Wednesday, I'd be very keen to know why the EFL have apparently allowed the Ejaria deal all of a sudden. Doesn't make a lot of sense- I see some cutbacks but enough to make good the deficit? Maybe wage deferrals did it? That including Aluko, Stadium and Training Ground is a 2 year FFP adjusted loss of £41m. 2017/18- Renhe Sports Management Co Limited Let's assume total allowable costs are £6m per year as it may include some other items? 2017/18- LOSS- £29,893,915 2018-19- LOSS- £11,753,640 That's about £41.6m in 2 years- but let's assume £12m in allowable costs. That's not too bad at say £29.6m. Profit on Disposal of Fixed Assets- £29.9m Aluko loan fee- £3m That's suddenly £62.5m of 2 year FFP losses- chances are these profits will not be especially recurring. That with those stripped out is an underline loss of £44m in 2018/19. Yet the EFL seem to see fit to allow the Ejaria signing. Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 29, 2020 Author Share Posted August 29, 2020 (edited) Quote I never understood the finances behind that. The fact that even with a stadium sale we appear to be in such financial dire straits for next season or two is very sobering. From the Derby forum- you certainly like to see it!! Let's get that fixed asset loophole shut before they sell and leaseback Moor Farm (the training ground) and let's get Pearce off the EFL board. Hopefully SL will be instructing Ashton accordingly, to lobby for the latter and perhaps both. Doubt people on DCFCFans read this site but if you do, then there's a reasonable chance that the amortisation shooting up by nearly £20m in 2019/20 was a forecast for that season certainly- because clubs within certain loss thresholds have to submit Future Financial Information- this makes monitoring easier (in theory) and likewise if done right should enhance the chances of catching out clubs who push the limits or who perhaps 'amend' their figures. I say clubs within certain loss thresholds, it's basically most clubs. Because any club who: Do not post a profit in the prior 2 sets of accounts combined- ie 2017/18 and 2018/19- this is therefore Test 1. If a club loses £10m in 2017/18 and makes a profit of £12m in 2018/19 then they're free! If not...Test 2! Test 2 is whereby a club submits their last two actual accounts and their current seasons accounts at the start of March of a given season. If- again as is likely for most clubs- a club has an aggregate FFP adjusted loss of in excess of £15m but below £39m, they have to submit the following, by the end of March of that season: Their Projected FFP figures for the following season- in this case it would be 2018/19 if we're going back to work out from the amortisation figures. Then their Projected FFP figures for the season after that- ie 2019/20. Contained within this would I assume be a forecast on amortisation. Hence that £20m spike in amortisation might well be accurate. Or within that ballpark anyway. Edited August 29, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 29, 2020 Author Share Posted August 29, 2020 Some comparables in terms of Pride Park. The first one has some similarities- but also some differences! Similar bit of the world, both have hosted concerts, KP Stadium is listed as having a Restaurant, listed as having undersoil heating- capacity not dissimilar either? Is a bowl so the corners issue might differ. Assume it has Executive seating- many grounds do. There is a hotel right by it too! I can certainly accept that KP Stadium might be worth less than Pride Park but not the figures stated! KP Stadium- 'cost' at time of addition- £19,106,000. Listed as Historic cost. Remained like this until 2009 when it was valued in May of that year. I say remained at that, basically remained at the 'Cost' net of Depreciation. May 2009- now £41,463,000. This is inclusive of non-depreciable freehold land to the value of £4,777,000. Accordingly, the Revaluation Reserve was now £24,701,000- near enough equal to the uplift in valuation. The methodology used was 'an existing use basis' this differs to Pride Park's valuation I believe? In May 2014, in accordance with their Revaluation policy a further Revaluation was carried out- £41,582,000. This eliminated the depreciation as there was a surplus on the initial Revaluation and was a small uptick. In May 2017, there was an interim valuation carried out. £45,808,000- this was compared with the depreciated carrying value inclusive of relevant assets known as fixtures of fittings of £45,528,000. In the initial valuation, this includes some £9,555,000 of freehold land. Doesn't appear to state the basis for the valuation however! By May 2019, the latest revaluation. Market value current use basis...£43,500,000 as against depreciated carrying value of £39,153,000. Included within- and I assume it means the Market value current use basis one- is freehold land of £11,025,000- which of course, is not depreciated. On the other hand, I should point out one of the differences- zero additions so there is similarity in terms of the ground and the facilities to Pride Park but nothing in 16 seasons worth of 'additions' under that section for the ground. Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 29, 2020 Author Share Posted August 29, 2020 Bet 365 Stadium. Like Pride Park, the club moved there in 1997. It holds less than Pride Park but not by miles. 30,089 vs 33,597 respectively. Bits of this are somewhat tricky to gauge, as it is not really listed separately in the relevant accounts for some time- so additions and accounting for these? These accounts also appear to run to November which is strange but 12 months are 12 months I guess! Classified as Investment Property- unclear if it includes all buildings or just the ground but stated at valuation. Assuming that at this time, under "Additions" is the ground. £13,849,347 by process of elimination. Directors considered valuation at that time, to be not in excess of cost- these are the 1997 accounts. To November 1998- Additions £263,780. The problem is, is this inclusive of Training Ground or solely the stadium? The name of the company indicates the stadium solely! Accounts extended to May 2000- to bring it back into line with the club. Additions are £151,190. 18 month accounts. These are not Additions in total but solely under Land and Buildings. Policy changed to 'Cost' from Investment Property in 2000-01 and thus heralded a period of no "Additions". Finally come the financial year- now running until March 2007- some additions! £57,323. Unclear as to whether it was to the ground though as it's not clearly stated. To March 2010, £2,672,762 in Additions. Still nothing definitive yet. To March 2011, a stated £3,856,736 in additions. Again not specific as to whether it is to Fixtures, Fittings, Stadium, Training Ground or something else! Come 2012, we have some movement. Some changes. Revalued on a DEPRECIATED REPLACEMENT COST basis- ie the same valuation method that Derby used. Was before this, at a Cost of £16,480,307. The actual first valuation in some time shows it now worth £32,356,355, Additions- and this is definitively to the Stadium of £1,679,220- the size of the uptick in valuation is therefore equal to the Revaluation Reserve. Cost plus valuation comes to £34,035,575- the accumulated Depreciation is therefore eliminated due to the revaluation and we have valuation of £34m for accounting purposes or £34,035,575 if adding it all as a whole. Additions of course will cover work done on the ground, ie Mel Morris's developments in 2015. They would be classed under Additions. To March 2013- and remember no Depreciation as it is being held at valuation- Additions of £591,650 to the Stadium which means it's added to the £34m. To March 2014- it's a further £308,580 in Additions to the Stadium. Now at £34,900,230. To March 2015- it's a further £497,763 in Additions to the Stadium. However that is pre a Revaluation at DRC which comes to £33.1m- and that's if we don't include Plant and Machinery which brings it to £34m if we do. Interestingly, the 2016 accounts referenced that Stoke planned to fill in the corner, with some 1,800 seats. One of the corners anyway between the DPD and Marston Pedigree Stands (no me neither!) Additions in 2015/16- £211,414. The valuation also was inclusive of land with a net book value of £4,450,000- the first such mention but unchanged from 2015. Additions in 2016/17- and the notes mentioned planned Stadium specific investment encompassing a Stadium South-East Corner Infill and Stadium seating. Anyway that year, to March 2017, there was £2,729,905 of Investment to the Stadium. Onto March 2018...Wow, quite the Addition that season- some £5,837,761 to the Stadium! £41,702,830 a new valuation but OTOH the valuation itself was £42.5m on a Depreciated Replacement Cost basis. The land itself was still £4.45m. Appeared to be an Impairment to the valuation on relegation of £792,757- hence the £41,131,653 valuation of the Stadium- inclusive of Plants and Machinery it was £42,031,653. Given that the similar methods of valuation were used and some similarities in accounting policies- again I accept Pride Park worth more than Bet 365 but double?? In short, the challenge I put is to explain an apparent £15-20m rise between 2016/17 and 2017/18. The accounting policy in 2016/17 was like that of Stoke- revaluation model, using DRC. Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 29, 2020 Author Share Posted August 29, 2020 (edited) 2016/17 Some relevant Accounting Policies state: Quote 2. Accounting Policies 2.1 Basis of preparation of financial statements The financial statements have been prepared under the historical cost convention modified to include certain items at fair value and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006. For that, read Pride Park? Quote 2.6 Tangible Fixed Assets Tangible Fixed Assets [excluding freehold property] under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Once again, my basic assumption is that the certain item in 2.1 and freehold property in 2.6 is the same thing- Pride Park. Quote 2.7 Revaluation of tangible fixed assets Freehold property is carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and any subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date. Fair values are determined from market based evidence usually undertaken by professionally qualified valuers. Revaluation gains and losses are recognised in the Statement of Comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit and loss. They appear to have neglected to apply their own accounting policies here. Quote 3. Judgements in applying accounting policies and key sources of estimation uncertainty. Stadium revaluation The freehold buildings known as Pride Park Stadium were valued by independent valuers Jones Lang LaSalle on 23 May 2013 on a depreciated replacement cost basis. Based on this valuation the directors have assessed the carrying value of the freehold buildings and determined that the current valuation is appropriate. Now, what was the carrying value as of 2016/17? Before Depreciation- accumulated or otherwise but also before additions and transfers between classes. £63,797,975. Additions- £728,204. Transfers between classes- £1,993.299. Therefore after that, but pre depreciation- accumulated or current- £66,519,478. If we eliminate Depreciation on Sale then yeah... If we don't... £51,618,188. My contention therefore is that either the Stadium was overvalued, or the carrying value was too low- or a bit of both! Clearly Gibson's comparison was way out but £81.1m absolutely seems too high! The carrying value materially, absolutely materially, differs from the 2018 sale price which was supposed to be at 'fair value'! In wholesale contradiction to the accounting policy. @Coppello how does this sit? Looks to me like the accounting policies might just have been disregarded IMO. Edited August 29, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 1, 2020 Author Share Posted September 1, 2020 (edited) Bit of interesting stuff on Price of Football podcast this week- I've read the layout/preview but I'm glad this is finally being noted somewhere. Still catching up on many weeks of podcast so won't hear this for some while! As we already know, their auditors are Smith Cooper- James Delve by his own admission is a passionate Derby supporter. See Smith Cooper website. Why mention James Delve? Well he was the guy who signed them off in 2017/18- but so far so mundane. Where it gets a bit more interesting is that Smith Cooper and possibly ANDREW Delve but certainly Smith Cooper were part of the advisory for Mel Morris on the takeover of Derby. The auditors have also acted for Mel Morris for 20+ years. The North Stand was for a time known as the Smith Cooper stand. A partner in 2013/14, and stressed desire to continue for 2014/15 also. Andrew Delve (also of Smith Cooper) signed them off for Derby for a few years until 2016/17- which was when it became JAMES Delve. I must stress in the interest of balance etc that he for all I know, may be totally unrelated to James Delve. He has though been someone who acted for or worked with Mel Morris a number of times down the years. I must also stress in the interest of balance that Andrew Delve could have no interest whatsoever in football for all I know. The auditors Smith Cooper North Stand in all its glory! Though I'm sure that North Stand sponsorship is long gone. Edited September 1, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 1, 2020 Author Share Posted September 1, 2020 (edited) Would be really interesting to know how well it fits with audit independence regulations. Sure it'd have been flagged by now in the event of issues BUT it feels as if it could be construed as being a tad cosy to me. Edited September 1, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 1, 2020 Author Share Posted September 1, 2020 On 29/08/2020 at 22:42, Mr Popodopolous said: 2016/17 Some relevant Accounting Policies state: For that, read Pride Park? Once again, my basic assumption is that the certain item in 2.1 and freehold property in 2.6 is the same thing- Pride Park. They appear to have neglected to apply their own accounting policies here. Now, what was the carrying value as of 2016/17? Before Depreciation- accumulated or otherwise but also before additions and transfers between classes. £63,797,975. Additions- £728,204. Transfers between classes- £1,993.299. Therefore after that, but pre depreciation- accumulated or current- £66,519,478. If we eliminate Depreciation on Sale then yeah... If we don't... £51,618,188. My contention therefore is that either the Stadium was overvalued, or the carrying value was too low- or a bit of both! Clearly Gibson's comparison was way out but £81.1m absolutely seems too high! The carrying value materially, absolutely materially, differs from the 2018 sale price which was supposed to be at 'fair value'! In wholesale contradiction to the accounting policy. @Coppello how does this sit? Looks to me like the accounting policies might just have been disregarded IMO. Little more on this one. 2.1 was still in evidence in 2017/18. Under Tangible Fixed Assets it shows some further additions- £13,361 and £245,561 in terms of Transfers between classes- this surely helps to puff up the valuation that little bit more. £66,519,478 + £13,361 + (Maybe) £245,561. £66,778,400. Net of and before any depreciation that may or may not be applicable. However the valuation of the disposal itself was stated at £56,205,091. This suggests that it also included other buildings- maybe the training ground? Suppose I've not been factoring in fixtures and fittings relevant to Pride Park or bits of Assets under Construction- net of or before any depreciation in terms of the bits specifically bracketed- so I assume relevant to the disposal- we have £59,236,629. As such, it doesn't stack up. Either the sale price is too high, the net book value or even book value is too low or a bit of both. Problematic given their accounting policies for 2016/17 appeared to have the Stadium at in or around fair value. Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 1, 2020 Author Share Posted September 1, 2020 Some interesting snippets. Quote 79) On the same day a) JLL provided a valuation letter to the Club confirming i) Its assessment of Fair Value on a Profits basis at £81.1m, and ii) Its assessment of Fair Value on a DRC basis at £74.4m JLL also confirmed a market rent for Pride Park of £4.16m on a sale and leaseback of Pride Park to the Club on reasonable terms Quote 83) On 30 June 2018 JLL provided a formal ‘Valuation Advisory’ of Pride Park. That document was reviewed by the Club and on 3 July 2018 the Club provided certain comments and corrections. JLL appears to have accepted those comments and corrections, and later that same day provided its ‘final’ valuation report to the Club (‘the 2018 JLL report’). We return to consider that report in greater detail below – it suffices for the time being to say that JLL a) Continued to value Pride Park on a Profits basis at £81.1m b) Continued to value Pride Park on a DRC basis at £74.4m c) Continued to assess the market rent of Pride Park on the basis of a sale and leaseback agreement at £4.16m JLL stood by certain valuations it seems- and the rent- hence the use of the word 'Continued' and in a prior point, 'confirmin'. The proposed annual £4.16m rent seems fine anyway, based on suggested rent for other grounds- Hillsborough £3m on £60m transaction or St Andrews £1.25m on £22.76m transaction- it seems in the right ballpark. £1.1m however?? Only works if non football income does not go to Derby but to Mel Morris etc. It also appeared that the Club corrected such a large valuation firm and their suggestions were accepted- which seems a bit odd!! Part of those corrections clearly led to the following differences: Quote 84) Before we leave the 2018 JLL report we return to the exchanges that took place between JLL and the Club, and the Club and the EFL, in late June 2018: a) As we have said above, on 26 June 2018 Mr Holt of the Club sent an email to Mr Karran confirming ‘stadium valuations [by JLL] of £81.1m using a profits method and £74.4m using a DRC method’. Mr Holt’s email i)Began ‘As discussed yesterday, please see the email below from JLL and attached workings’ which were said to confirm such valuation ii) Set out below his text an email that purported to have been sent by JLL to the Club at 18.01 on 21 June 2018 titled ‘JLL – Pride Park Draft’ and which stated (under the heading ‘Fair value on basis of Depreciated Replacement Cost’ (1) ‘Having reviewed evidence we have adopted a cost of £3,000 per seat for Pride Park, based on a total number of 33,435 at the venue’ (2) ‘We have assumed an economic life of 60 years’ (3) ‘In total we have calculated a [DRC] pf £74.4m’ iii) Attached inter alia a document titled ‘JLL – Derby County – Pride Park – Valuation Model 1 – 21 June 2018.pdf’ which comprised the calculation by which JLL had arrived at its DRC valuation of £74.4m b) In the documents disclosed by the Club there was indeed an email sent by JLL to the Club at 18.01 on 21 June 2018, to which a document titled ‘JLL – Derby County – Pride Park – Valuation Model 1 – 21 June 2018.pdf’ was attached. However i)That email stated (under the heading ‘Fair value on basis of Depreciated Replacement Cost’) (1) ‘Having reviewed evidence we have adopted a cost of £3,000 per seat for Pride Park, based on a total number of 33,435 at the venue’ (2) ‘We have assumed an economic life of 50 years’ (not 60 years) (3) ‘In total we have calculated a [DRC] pf £57.8m’ (not £74.4m) ii) The attachment comprised the calculation by which JLL had arrived at a DRC valuation of £57.8m (not £74.4m). That calculation (1) Used a cost per seat of £3,000 (2) Used a capacity of 33,455 (3) Assumed economic life for the stadium of 50 years, giving an adjusted remaining economic life of 28 years (4) Assessed depreciation at 44% and functional obsolescence at 5% c) In the Club’s disclosure there was a further email sent by JLL to the Club at 15.17 on 25 June 2018, to which a document titled ‘JLL – Derby County – Pride Park Valuation Model – Cost v2 – 25 June 2018.pdf’ was attached: i)The email (in response to a query from Mr Holt at the Club ‘How are you getting on with the revised DRC workings? Is it possible these could be sent across ahead of my 4.30pm meeting’) read ‘… as discussed, we are comfortable revising this as discussed this morning. See attached’ ii) The attachment comprised the calculation by which JLL had arrived at a DRC valuation of £74.4m. That calculation (1) Still used a cost per seat of £3,000 (2) Still used a capacity of 33,455 (3) Assumed an economic life for the stadium of 60 years, applied a maintenance adjustment of a further 5 years ‘due to good cap-ex’, and so assumed an adjusted remaining economic life of 43 years (4) Assessed depreciation at 28.3% and functional obsolescence at 5% Quote 85) Without hearing from Mr Holt it is impossible to be certain exactly a) How the ‘JLL email’ sent to the EFL on 26 June 2018 came to be sent as it was, or b) How the attachment sent to the EFL on 26 June 2018 came to be labelled as it was. The strong suspicion is however that (1) the wording of/figures in JLL’s 21 June 2018 email to the Club was changed by Mr Holt before he forwarded the same to the EFL, (2) the attachment to JLL’s 25 June 2018 email was relabelled by Mr Holt to make its nomenclature consistent with the other attachments sent by JLL on 21 June 2018, and (3) Mr Holt replaced the actual attachment to JLL’s 21 June 2018 email with that ‘renamed’ attachment; it is difficult to conceive of any other sensible explanation. The Riverside is another good comparison- land value will be somewhat less but the methodology seems similar to Derby pre 2018. Quote 86) The question then becomes – so what? We consider below whether that conduct has any consequence for any of the Club’s procedural defences. However, that matter aside, our view is that the manipulation described above, if that is what it was, is irrelevant. The Club was perfectly entitled to discuss with JLL, and challenge JLL on, the initial figures that JLL provided on 21 June 2018. JLL was perfectly entitled to reconsider its initial figures in the light of such discussions. That is in all probability what happened, and what caused JLL to provide a revised DRC valuation figure to the Club on 25 June 2018. There is certainly no criticism to be made of JLL for providing that revised figure as it did. While it was unwise of Mr Holt to have manipulated JLL’s email – if that is what he did – it is unlikely in our view that the ‘manipulated email’ actually contained any view that JLL had not by then expressed to the Club, or that the ‘manipulated email’ was in fact misleading. Certainly the ‘manipulated email’ reflected the views set out in the 2018 JLL report. Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 1, 2020 Author Share Posted September 1, 2020 (edited) Quote iii) The valuation history of Pride Park 177) As well as the reports prepared for these proceedings by Mr Messenger and Mr Honeywill, we were also provided with a number of valuation reports that had been prepared for the Club in recent years: a) In December 2007 Peter Clarke of King Sturge valued Pride Park. He did so on various bases, including the DRC method. The King Sturge report i)Recorded (as one of ‘two particular features of the structure’ of Pride Park) that ‘construction has been completed all around the pitch including the corners which are areas where construction costs per seat are at the maximum’ (emphasis added) ii) Estimated (as at December 2007) that the current replacement of the stadium and its facilities amounted to a little over £77million. The report noted ‘In making this assessment we have consulted with our building surveyors who have in turn used the various building cost indices to arrive at this overall figure. In addition to this we have added professional fees for the 82 construction and an appropriate allowance for finance during the construction period to arrive at an overall replacement cost’ iii) Depreciated that sum by 10% for functional obsolescence, and further adjusted that sum to reflect the fact that Pride Park was by then 10 years old, out of an estimated overall lifespan of 60 years iv) Concluded that the value of Pride Park on a DRC basis was £70,000,000, which equated to £2,029 per seat. In carrying out that calculation King Sturge used the stadium’s actual capacity of 33,455 as the multiplicand v) Gave lower valuations for Pride Park on other bases (including a profits basis) b) In May 2013 Mr Clarke – by then of JLL – valued Pride Park again. He again did so on various bases, including the DRC method, as at 31 December 2011 and 31 December 2012. The 2013 JLL report i)Adopted a build cost of £2,750 for the year 2012 and £2,800 per seat for 2011. The 2013 JLL report recorded that ‘Generally the cost of stadiums has increased in the past few years … We are however now noting a stabilisation or even reduction in some cases of build costs for this type of specialist property, particularly for sub-40,000 capacity stadia’ ii) Estimated ‘re-build costs’ of £93,500,000 for 2012 and £92,000,000 for 2011. That figure was thus up from £77m in the 2007 King Sturge Report iii) Depreciated those sums by 23% for physical depreciation and a further 15% for functional depreciation – a total of 38% - before adding professional fees and finance costs, and a sum to reflect land value (at £350,000 per acre) iv) Estimated the value of the stadium at £69,500,000 (as at 31 December 2011) or £66,500,000 (as at 31 December 2012) on a DRC basis, equivalent to £2,077/£1987 per seat v) Gave lower valuations for Pride Park on other bases (including a profits basis). In the 2012/13 accounts, Land and Buildings pre any depreciation came in at £61.42m- feels pretty much spot on once professional fees, finance costs and land value factored in. Unclear exactly what it includes in terms of Land and Buildings though. The accounting policies for Fixed Assets had SOME similarities to those of Middlesbrough. Helpfully, in 2016/17, Middlesbrough's accounts showed how it might be laid out. This is the Riverside, the training ground and other properties all together. Quote At valuation in 2015- £76,480,000 Additions- at cost 2016- £1,237,000 Additions- at cost 2017- £5,678,000 Total- £83,485,000. That's pre depreciation ie the 2015 valuation and then additions at cost before any further depreciation would occur. Quote At valuation in 2015- £76,480,000 Additions- at cost 2016- £1,237,000 Additions- at cost 2017- £5,678,000 Additions- at cost 2017- £283,000 Revaluation- £2,232,000 Total- £86,000,000 Might see if I can draw up a similar matrix for Derby. The final valuation appears to be after depreciation though. Might also add, those (granted potential minority on Twitter, social media etc) Derby and Aston Villa fans are classy as ever... Edited September 1, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
chucky Posted September 1, 2020 Share Posted September 1, 2020 My opinion on this thread still hasn't changed Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 1, 2020 Author Share Posted September 1, 2020 I'd go as far as to say that Morris and some of their fans are almost Trumpian. Trumpian cherrypicking is what SOME of their fans and hierarchy are. I don't mean in worldview or politics etc- no idea on that and nor is it relevant for this thread- more like style. Tone. Quote Link to comment Share on other sites More sharing options...
AnAstonVillafan Posted September 2, 2020 Share Posted September 2, 2020 On 01/09/2020 at 15:22, Mr Popodopolous said: I'd go as far as to say that Morris and some of their fans are almost Trumpian. Trumpian cherrypicking is what SOME of their fans and hierarchy are. I don't mean in worldview or politics etc- no idea on that and nor is it relevant for this thread- more like style. Tone. What should their tone be ? Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 2, 2020 Author Share Posted September 2, 2020 (edited) 3 hours ago, AnAstonVillafan said: What should their tone be ? Any tone they like. Merely an observation, not necessarily a criticism- love how one eyed and selectively outraged, cherry picking Morris and some of their fans are though. Edited September 2, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 3, 2020 Author Share Posted September 3, 2020 (edited) Edit. Edited September 3, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Guest Day Posted September 3, 2020 Share Posted September 3, 2020 8 minutes ago, Mr Popodopolous said: It's were. 'Your' welcome. Appreciate it, I didn't pay much attention to English at school as they tried to force Shakespeare on us, what's that all about? Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 4, 2020 Author Share Posted September 4, 2020 (edited) Not strictly Championship in the here and now related, but found this snippet when looking for another article- perhaps Fulham losing at Wembley might have worked a bit better for us than them winning. Was moot in the end of course due to a certain ex City LB- but... They were perhaps close to FFP than might have been assumed. Despite Year 1 of Parachute Payments, despite a year in the PL at the higher- £35m- level! Covid would have course have played a part (as with everyone), but they had in that 3 year period, the 4th year of Parachute Payments in 2017/18, the £100m in TV money- and the £35m loss limit in the PL and the first year of Parachute Payments having come straight back down- good profit on Sessegnon too, all to the books as he was an academy product! As for Nottingham Forest, despite spending and not the biggest income they do seem to sell quite well- that Cash fee and the rolling up of 2019/20 and 2020/21 will keep them alright IMO. £7m for Brereton?? This is THE prime example! Clear to see who got the better end of the deal there...think they have made some healthy profits on disposal in recent times though. Quote Fulham's transfer plans WILL suffer if they aren't promoted Fulham will be desperate to secure promotion to the Premier League in the play-offs, otherwise their transfer plans could be badly hit. Cottagers boss Scott Parker has been warned the club will only be able to make loan signings during this summer's transfer window if they fail to win promotion back to the Premier League. Despite being owned by Shahid Khan, the club will have to curb their transfer spending next season if they remain in the Championship as they will be close to breaching the FFP regulations. The impact of the coronavirus crisis has also affected Fulham's finances, as it has with all clubs in the country. Edited September 4, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 7, 2020 Author Share Posted September 7, 2020 (edited) Good old Matt Hughes- seems I was not wrong about Derby releasing the written reasons ahead of time- I didn't know the specifics about the agreed release time but I knew they had acted unilaterally. Quote Derby break embargo Derby's relationship with the Football League has become so toxic in the light of their spending charge that the club deliberately published the written reasons behind the independent panel's decision to clear them last week an hour before the embargo time that the two parties had mutually agreed. The EFL have until Tuesday to lodge an appeal against the panel's verdict that Derby's sale of Pride Park for £80million and amortisation procedures did not constitute a breach of profit and sustainability rules. If I'm honest, I'm not sure how big a chance they- the Football League would have- in any appeal but I hope they do so anyway. I also hope that clubs are taking note and continuing to consider whether Pearce is still appropriate for the role of a club rep on the Football League board. Not so much him, more his boss IMO! However in the interests of balance it appears they are selling Bogle and Lowe- fees in total for the pair somewhere between £10-15m, unsure how much but looks like signs that they are doing the right thing on this score at last... Now then, Reading and Stoke- these clubs are surely ones with P&S questions but the former appear to have neglected to sell anyone for any significant fees, even rejecting a bid for Swift or two bids for Swift and the latter it's still unclear. Edited September 7, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
RoystonFoote'snephew Posted September 7, 2020 Share Posted September 7, 2020 EFL are to appeal the 2nd charge against Derby relating to the amortisation of assets. Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 7, 2020 Author Share Posted September 7, 2020 (edited) Still I wonder about the £81.1m valuation too- but independent valuations are probably extremely hard to unpick. One valuer vs another- even though comparables in the region make Pride Park look toppy IMO. Probably choosing the charge they feel they have best chance on. Nonetheless, the valuer they chose- amateur hour or what! He didn't even go to Pride Park to value it! Edited September 7, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 7, 2020 Author Share Posted September 7, 2020 (edited) They're not happy on DCFCFans! The truth is, I believe quite a few clubs are happy about this. Having said that given the forecasted spike in amortisation for 2019/20 I'm not too fussed on some levels about this charge! Suppose the EFL want to set a standardised amortisation method for clubs moving forward. On a serious note, I was expecting an appeal of some description and yes I do think the EFL will want to set some kind of legal grounds for a standardised amortisation method. From memory: Vs Bolton- EFL appealed and lost. Happy to check though. Vs Birmingham- EFL appealed and won- but a reprimand. Nonetheless that stays on permanent record etc. Likely can cite it as another case in any future proceedings, certainly with the period if any should arise. Vs Derby- Who knows?? Edited September 7, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Davefevs Posted September 7, 2020 Share Posted September 7, 2020 1 hour ago, RoystonFoote'snephew said: EFL are to appeal the 2nd charge against Derby relating to the amortisation of assets. Do you think that’s why they’ve sold Lowe and Bogle??? Quote Link to comment Share on other sites More sharing options...
AnotherDerbyFan Posted September 8, 2020 Share Posted September 8, 2020 11 hours ago, Davefevs said: Do you think that’s why they’ve sold Lowe and Bogle??? Those two being sold should mean we'll meet the 4 years to 2021 P&S limits. We were hoping to get more for Bennett and actually sell Malone and Jozefzoon, which may have meant keeping one of Lowe/Bogle. The coronavirus impact and P&S period changing to 4 years appears to have saved us from a hefty penalty, for what would have been the 3 years to 2020. Although, if it wasn't for the extended season, we would have almost certainly sold players to stay within limits anyway. We've got a paper thin squad now, with only 16 senior players, one of which we're doing whatever we can to offload, and another two of those having played fewer than 100 professional games. From the 16, 4 are currently injured, with 2 only just returning to the team following injuries. 2 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 8, 2020 Author Share Posted September 8, 2020 (edited) Another Derby statement. https://www.dcfc.co.uk/news/2020/09/derby-county-statement-on-efl-appeal This one is more reasonable. None of the woe is me, enemy of the EFL state stuff which was basically quite laughable. A good post from a sensible poster on DCFC Fans, this predated the statement and is separate but a good post. Quote a) Mel Morris. Mr Morris has throughout the relevant period been the owner and Chairman of the Club. He gave evidence about his purchase of Pride Park from the Club and the background to that sale. His witness statement also contained a considerable amount of evidence about the Club’s wider relationship with the EFL – a relationship which he characterises as i) Involving ‘dislike’ of him and the Club by the EFL ii) Him being an ‘enemy of the EFL state’, and iii) The EFL having an ‘axe to grind against [him] personally 22) Although we return below to address the Club’s suggestion that the EFL has been motivated to bring these Charges against the Club by some improper stimulus, we also make it clear at the outset that we reject that suggestion. The evidence that we heard and the documentary evidence before us simply did not bear out such an assertion. He needed to be bigger than this and IMO it was a mistake to articulate it. It was poor judgement and served no purpose apart from making the club look paranoid. I have a lot of time for Mel and the financial backing he has put into the club but does that make him immune from any criticism whatsoever? Bolded bits a) and 22) were by the poster in q. It certainly did make Derby look paranoid, axe to grind etc- Panel dismissed much of this.. I've been critical of it in the past but DCFC Fans is actually in all honesty quite a good read! At times. Still have a fairly low opinion of Morris however, Pearce on the board given al the Derby controversy- seems incongruous. Clearly going out to clatter opposition players is wrong BUT it is worth noting that not that I condone it, Pulis did send out Stoke vs Arsenal in a certain frame of mind- according to Dave Kitson in any case,he said Pulis hated Arsenal, Wenger, their style etc. Lastly given the comparable stadia in that region, in that timeframe etc- and even those sold and leased back a lot of which at suspect prices plus of course genuine arms length sales of grounds? Well £81.1m seems dubious! That said Gibson's £22m feels so low, it is quite likely to be worth more than Bet365 Stadium, KP Stadium- and when Coventry played there, the Ricoh Arena- however that sale price feels wrong to me. Sceptical- as for the rent fall from £4.16m to £1.1m... I only think the rent fall has some merit if and only if all of the commercial revenue (ha, in these times no!) but in normal times flows to Mel Morris/Gabay/Dell/Uncle Tom Cobley and all - whoever! Anyone but the club basically. Because IIRC it got adjusted down or the argument to adjust it down was because it would be charged based on 100 days of football usage. Therefore only football related revenue should count in the club/group accounts. Commercial revenue independent of that should flow to anyone on the above list- anyone at all except the club in order to justify the marked reduction in rent. Edited September 8, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Hxj Posted September 8, 2020 Share Posted September 8, 2020 Firstly - although I know that you will not accept it - the value of Pride Park has been agreed for FFP purposes - it really has. Secondly - I think that the EFL missed a valuation issue on Pride Park - I would have expected the valuation to also be challenged on the basis of the rental value from DCFC - I doubt that in open market terms that the agreed rental value equates with the capital value given the over-riding dominance of the DCFC lease. Thirdly I would expect in future that the EFL would appoint experts who are really experts - or maybe not. Finally the EFL will lose their appeal. 2 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 8, 2020 Author Share Posted September 8, 2020 (edited) I accept it on balance but it just sticks out like a sore thumb compared to so many other grounds- either transactions or valuation (not cost but valuation) in accounts. Albeit of varying methods- comparable , some have sponsorships which can enhance- doesn't make a lot of sense. I wondered about that- £4.16m initally as per the valuer down to £1.1m was it- good point about over-riding dominance of DCFC lease that I'd never really considered. Zero non matchday revenue to Derby could justify it though maybe? The shunting around of the valuation was interesting- wasn't it about £57m or something BEFORE Derby pushed back on it- why the EFL accepted the higher of £81.1m and not £74.4m feels odd too- surely the £74.4m for DRC was more reliable for such a transaction- sure the valuation company (name escapes me) had the initial DRC at quite a bit lower, maybe £58m. Lastly, the fact is that the accounts- look at Derby 2016/17 accounts- the ground was possibly net of depreciation not materially different to valuation as per their own Accounting Policies- yet it shot up in a year to £81.1m! I'm sure that they- and Sheffield Wednesday and possibly Aston Villa, Reading the 2nd sale would not receive on the open market the terms they did by their owners. Sure of it. I'd hope they will! Could they win a reprimand like Birmingham, or something to keep on the permanent/relevant FFP record I wonder? Edited September 8, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 8, 2020 Author Share Posted September 8, 2020 Some of the Derby and Sheffield Wednesday fans are quite delusional though! Some! Quote Link to comment Share on other sites More sharing options...
Hxj Posted September 8, 2020 Share Posted September 8, 2020 The agreed valuation of Pride Park may well be complete nonsense - but until the EFL firstly follow the correct EFL processes and secondly appoint real experts they cannot argue otherwise. My argument would have been - would an open market purchaser pay £81.1 million for an asset achieving a guaranteed gross rent of £1.1 million a year? But then again I don't work for the EFL. As regards other rents and income I would be looking for a real history. 1 Quote Link to comment Share on other sites More sharing options...
downendcity Posted September 8, 2020 Share Posted September 8, 2020 10 hours ago, AnotherDerbyFan said: Those two being sold should mean we'll meet the 4 years to 2021 P&S limits. We were hoping to get more for Bennett and actually sell Malone and Jozefzoon, which may have meant keeping one of Lowe/Bogle. The coronavirus impact and P&S period changing to 4 years appears to have saved us from a hefty penalty, for what would have been the 3 years to 2020. Although, if it wasn't for the extended season, we would have almost certainly sold players to stay within limits anyway. We've got a paper thin squad now, with only 16 senior players, one of which we're doing whatever we can to offload, and another two of those having played fewer than 100 professional games. From the 16, 4 are currently injured, with 2 only just returning to the team following injuries. Mark Ashton here. Do you need any midfielders - I could do deal for a job lot? Quote Link to comment Share on other sites More sharing options...
Hxj Posted September 8, 2020 Share Posted September 8, 2020 (edited) I do agree that some of the SWFC and DCFC fans are more than delusional. However the 12 point deduction for SWFC and the current mutilation of the DCFC squad is sufficient recompense from my perspective Edited September 8, 2020 by Hxj corrections 1 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 8, 2020 Author Share Posted September 8, 2020 (edited) 36 minutes ago, Hxj said: I do agree that some of the SWFC and DCFC fans are more than delusional. However the 12 point deduction for SWFC and the current mutilation of the DCFC squad is sufficient recompense from my perspective Agree on both counts. The PL 2 thing is a regular refrain but what's in it for the PL? Cocu appears to be after a winger and a striker though so not that weakened...yet. Bennett was a fringe player, unsure how much Malone featured- Carson was a GK who Man City have chosen to loan twice- some savings and who knows a loan fee? Not like he was featuring that regularly. Talk of Nathan Byrne in as well. Edited September 8, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Hxj Posted September 8, 2020 Share Posted September 8, 2020 Well the DCFC website claims 4 goalkeepers and six defenders - and people complain about our squad - plus Rooney is a year older - even easier for someone to close him down so he passes backwards. 1 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 8, 2020 Author Share Posted September 8, 2020 (edited) EFL MUST shut that loophole or get clubs to agree in sufficient numbers, to prevent Derby- or any other club for that matter from selling and leasing back fixed assets to try and duck FFP, in Derby's case it'd be the training ground if it's possible- unsure who owns the Training Ground, whether it's club or AN Other. Derby's current squad FWIW, as per Wikipedia. Quote Current squad As of 7 September 2020[63][64] Note: Flags indicate national team as defined under FIFA eligibility rules. Players may hold more than one non-FIFA nationality. No. Pos. Nation Player 1 GK SCO David Marshall 2 DF ENG Andre Wisdom 3 DF SCO Craig Forsyth 4 MF SCO Graeme Shinnie 5 DF POL Krystian Bielik 6 DF NED Mike te Wierik 8 MF ENG Max Bird 9 FW ENG Martyn Waghorn 10 MF WAL Tom Lawrence 14 FW ENG Jack Marriott 16 DF ENG Matt Clarke (on loan from Brighton & Hove Albion) 17 MF ENG Louie Sibley 18 FW ENG Morgan Whittaker No. Pos. Nation Player 21 GK NED Kelle Roos 22 MF ENG George Evans 25 MF USA Duane Holmes 26 DF ENG Lee Buchanan 27 GK SVK Henrich Ravas 30 GK NGA Emmanuel Idem 32 FW ENG Wayne Rooney (captain) 33 DF ENG Curtis Davies 38 MF IRL Jason Knight 45 MF ENG Josh Shonibare 46 MF ENG Jordan Brown 47 DF ENG Harrison Solomon — MF NED Florian Jozefzoon Lacks balance in some areas yes but not bad tbh! Certainly for a club with a possible £31m FFP loss in 2018/19 and £20m spike in amortisation in 2019/20! Edited September 8, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 9, 2020 Author Share Posted September 9, 2020 (edited) In fairness to the Derby fan who stuck it up on Twitter and their forum- it is possible that there are flaws with the EFL as it stands. I don't think they enforce rules quickly enough, efficiently enough, without fear or favour for a start- or haven't so far! Also though- and for once this isn't a dig I don't see how club CEOs on the board is a good thing. External regulator could be the fairest all round- club reps...system may need some changes? Not individuals, the system! Forgot to add- Parachute Payments. Parry has spoken out quite strongly against these but further action is needed- hand in hand with the correct enforcement of, including tightening up of loopholes for FFP. While I'm at it, the legal action and suing for big money is worth a look. Disputes between club and body have to be settled via arbitration apparently. Quote Does the law impose limits on the available remedies? Are some remedies not enforceable by the court? The parties are generally free to agree on the powers exercisable by the tribunal to grant remedies (Section 48). Unless the parties have agreed otherwise, the tribunal has the same powers as the English High Court and the county court (Section 105(1)) to order: a party to do or refrain from doing anything; specific performance of a contract (other than a contract relating to land); or rectification, setting aside or cancellation of a deed or other document. For public policy reasons a tribunal does not have the power under English law to award punitive damages, nor is it likely that an English court would have the power to enforce such an award. A tribunal may also not order imprisonment or the payment of fines. https://www.lexology.com/library/detail.aspx?g=9fe151f5-ebb4-43f8-9664-9d149170e158 If an organisation agrees in writing- which clubs do as part of their membership of the EFL- to Arbitration, this feels likely that Derby- or anyone else- would be unlikely to be able to take action to gain punitive damages. At least in terms of their membership! Edited September 9, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
AnotherDerbyFan Posted September 9, 2020 Share Posted September 9, 2020 10 hours ago, Mr Popodopolous said: I accept it on balance but it just sticks out like a sore thumb compared to so many other grounds- either transactions or valuation (not cost but valuation) in accounts. Albeit of varying methods- comparable , some have sponsorships which can enhance- doesn't make a lot of sense. I wondered about that- £4.16m initally as per the valuer down to £1.1m was it- good point about over-riding dominance of DCFC lease that I'd never really considered. Zero non matchday revenue to Derby could justify it though maybe? The shunting around of the valuation was interesting- wasn't it about £57m or something BEFORE Derby pushed back on it- why the EFL accepted the higher of £81.1m and not £74.4m feels odd too- surely the £74.4m for DRC was more reliable for such a transaction- sure the valuation company (name escapes me) had the initial DRC at quite a bit lower, maybe £58m. Lastly, the fact is that the accounts- look at Derby 2016/17 accounts- the ground was possibly net of depreciation not materially different to valuation as per their own Accounting Policies- yet it shot up in a year to £81.1m! I'm sure that they- and Sheffield Wednesday and possibly Aston Villa, Reading the 2nd sale would not receive on the open market the terms they did by their owners. Sure of it. I'd hope they will! Could they win a reprimand like Birmingham, or something to keep on the permanent/relevant FFP record I wonder? £81.1m originally. Marked down to £74.4m to get through the P&S submissions, with view to enter further discussions at a later date. At the later date, both sides agreed to using the £81.1m figure. 9 hours ago, downendcity said: Mark Ashton here. Do you need any midfielders - I could do deal for a job lot? Probably the only position we don't need any players. Quote Link to comment Share on other sites More sharing options...
AnotherDerbyFan Posted September 9, 2020 Share Posted September 9, 2020 9 hours ago, Mr Popodopolous said: EFL MUST shut that loophole or get clubs to agree in sufficient numbers, to prevent Derby- or any other club for that matter from selling and leasing back fixed assets to try and duck FFP, in Derby's case it'd be the training ground if it's possible- unsure who owns the Training Ground, whether it's club or AN Other. Derby's current squad FWIW, as per Wikipedia. Lacks balance in some areas yes but not bad tbh! Certainly for a club with a possible £31m FFP loss in 2018/19 and £20m spike in amortisation in 2019/20! The training ground is owned by the club 9 hours ago, Hxj said: Well the DCFC website claims 4 goalkeepers and six defenders - and people complain about our squad - plus Rooney is a year older - even easier for someone to close him down so he passes backwards. Regarding the squad based on the OS: Goalkeepers: 1st choice, 2nd choice, keeper we want to loan out, U23 keeper Defenders: 5 competing for a start, 1 ageing pro who will have limited game time, 1 U18 player Midfielders: 1 player coming back from a year long injury and will still be out for a couple of months, 1 CB/DM cover, 2 U23 players, 6 others Forwards: 2 are wingers, 2 are forwards 25 players listed in total, with 4 of them have never kicked a ball in professional football, and a further 7 have played fewer than 100 games. Quote Link to comment Share on other sites More sharing options...
Davefevs Posted September 9, 2020 Share Posted September 9, 2020 9 hours ago, Mr Popodopolous said: In fairness to the Derby fan who stuck it up on Twitter and their forum- it is possible that there are flaws with the EFL as it stands. I don't think they enforce rules quickly enough, efficiently enough, without fear or favour for a start- or haven't so far! Also though- and for once this isn't a dig I don't see how club CEOs on the board is a good thing. External regulator could be the fairest all round- club reps...system may need some changes? Not individuals, the system! Forgot to add- Parachute Payments. Parry has spoken out quite strongly against these but further action is needed- hand in hand with the correct enforcement of, including tightening up of loopholes for FFP. While I'm at it, the legal action and suing for big money is worth a look. Disputes between club and body have to be settled via arbitration apparently. https://www.lexology.com/library/detail.aspx?g=9fe151f5-ebb4-43f8-9664-9d149170e158 If an organisation agrees in writing- which clubs do as part of their membership of the EFL- to Arbitration, this feels likely that Derby- or anyone else- would be unlikely to be able to take action to gain punitive damages. At least in terms of their membership! ....and one of ours is a board member!!! Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 9, 2020 Author Share Posted September 9, 2020 (edited) 7 hours ago, AnotherDerbyFan said: £81.1m originally. Marked down to £74.4m to get through the P&S submissions, with view to enter further discussions at a later date. At the later date, both sides agreed to using the £81.1m figure. Probably the only position we don't need any players. I think the EFL should've insisted for P&S purposes of the Depreciated Replacement Cost of £74.4m personally. There and then- DRC feels a more reliable and measurable method than the profits one, for these kinds of transactions. However on the price- looking at comparable stadia, capacity, region, year of setup- feels too high. Sorry but that combined with the ridiculously low rent...hell even set against one or two other suspect RPTs for P&S it comes out high! Comparisons: Birmingham- £22.76m- Annual rent £1.5m Reading- £26.5m- Annual Rent £750,000 Reading Mk. 2- £37.5m- Annual Rent £1.5m Aston Villa- £56.7m- Annual Rent £2.6m (I think). Though this has a problem with lease length arguably. Sheffield Wednesday- £60m- Annual Rent ??- Though it is mooted as £3m per season- nice little millstone! If any commercial revenue from non matchday flows to Derby or Sevco 5112- or is it Gellaw Newco 203 now- the EFL must revisit the rent, perhaps add in a market rent for P&S purposes. I suspect your owner will therefore given the club own it, sell and leaseback Moor Farm next. Hopefully the EFL will shut the loophole pronto. Edited September 9, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 9, 2020 Author Share Posted September 9, 2020 (edited) Quote v) Events leading up to the sale of Pride Park 66) In early 2018 Mr Morris began to consider how increased revenue might be generated from Pride Park. He concluded that there could be significant financial benefit to be derived from developing Pride Park into a multi-use, covered stadium, and began to explore the availability of funding for such a project. However, potential funders were reluctant to consider investing in such a project while Pride Park was owned by the Club; they were only prepared to consider investing if Pride Park was ‘extracted’ from the Club, and developed as a stand-alone venture. What evidence have we actually got for this apart from the oh so reliable words of a certain owner? Were there any genuinely dated emails or documentation backing this up? Quote 72) The evidence before us – which we accept – was that (for their own separate reasons) each of the Club and Mr Morris wished the sale of Pride Park to take place at a ‘fair price’ i.e. at a price which fairly reflected its value. However, neither had an up to date valuation of Pride Park. Accordingly, in May 2018 the Club approached Jones Lang Lasalle (‘JLL’) to value Pride Park. Negotiations for JLL to prepare a valuation were progressed, information was provided to JLL by the Club and, as we set out below, in late June 2018 JLL did indeed provide a valuation of Pride Park: a) JLL assessed the Fair Value of Pride Park on a Profits basis at £81,100,000 b) JLL assessed the Fair Value of Pride Park on a Depreciated Replacement Cost (‘DRC’) basis at £74,400,000, and c) JLL assessed the Market Rent of Pride Park on the basis of a sale and leaseback agreement at £4,160,000 per annum. DRC seems absolutely fair enough to me for this. Profits basis? Not so much! Market Rent falling by £3.06m per season- that's different approach wise! Quote 77) On 26 June 2018 the Club a) Forwarded to the EFL an email that purported to have been sent to the Club by JLL at 18.01 on 21 June 2018 in which JLL i) Explained that it (JLL) had ‘calculated a [DRC] of £74.4m’ for Pride Park, based on a cost of £3,000 per seat, based on a total number of 33,455 seats, assuming an economic life of 60 years and based on an underlying land value of £4.1m ii) Explained that it (JLL) assessed the Fair Value of Pride Park on a Profits basis at £81.1m. We set out below why we say ‘… purported to have been sent to the Club by JLL …’ b) Forwarded 2 calculations that purported to have been attached to JLL’s 18.01 21 June 2018 email setting out ‘JLL’s workings’: i) The first calculation set out how JLL had come to assess the Fair Value of Pride Park at £81.1m on a Profits basis ii) The second calculation set out how JLL had come to assess the Fair Value of Pride Park at £74.4m on a DRC basis Again, we set out below why we say ‘… purported to have been attached …’ c) Forwarded an extract from a valuation of Pride Park that JLL had undertaken for the Club in 2013 d) Informed the EFL that as and when it received further information from JLL (including a summary report), it would forward the same to the EFL. 78) On 26 June 2018 the EFL emailed the Club confirming that ‘if the final report is an official signed report by JLL and includes the information in the emails and the calculations then I would have thought this would be reasonable to support a sales price’. So far, so meh...though the valuation sticks out like a sore thumb! Looks alright when £4.16m in rent is factored in. Quote 79) On the same day a) JLL provided a valuation letter to the Club confirming i) Its assessment of Fair Value on a Profits basis at £81.1m, and ii) Its assessment of Fair Value on a DRC basis at £74.4m JLL also confirmed a market rent for Pride Park of £4.16m on a sale and leaseback of Pride Park to the Club on reasonable terms The valuations and proposed rent are still broadly consistent...until. Quote b) The Club provided that valuation letter to the EFL. In its covering email the Club explained that it had concluded that it was intending to use JLL’s market rental valuation as a basis for calculating the annual rent payable by the Club after sale – in particular, annual rent would be £1m per annum on the basis that the Club would have access to Pride Park for approximately 100 days a year and would incur associated running costs. Like I say not one penny of Pride Park commercial income that is non football related should flow to Derby. Running costs I assume ncluded within the rent? Interesting use and reiteration of the term 'purported' higher up. Now this bit is farcical- clear breach of the agreement. Quote 82) On the same day the Club a) Entered into a contract to sell Pride Park to Gellaw at a price of £81.1m. The TR1 records that the sale was also completed on 28 June 2018 b) Entered into a leaseback of Pride Park at a rent of £1,139,726 per annum, albeit without there being any restriction on the number of days for which the Club would have access to Pride Park for football purposes 100 days vs no restriction on the number. Pearce Out!! This bit is rather unusual. Quote 83) On 30 June 2018 JLL provided a formal ‘Valuation Advisory’ of Pride Park. That document was reviewed by the Club and on 3 July 2018 the Club provided certain comments and corrections. JLL appears to have accepted those comments and corrections, and later that same day provided its ‘final’ valuation report to the Club (‘the 2018 JLL report’). We return to consider that report in greater detail below – it suffices for the time being to say that JLL a) Continued to value Pride Park on a Profits basis at £81.1m b) Continued to value Pride Park on a DRC basis at £74.4m c) Continued to assess the market rent of Pride Park on the basis of a sale and leaseback agreement at £4.16m Professional valuers- JLL renowned professional valuers- taking advice and implementing it from a club?? Toxic club and the sooner Pearce is removed from the EFL board the better. Edited September 9, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 9, 2020 Author Share Posted September 9, 2020 This bit is bloody ridiculous. Quote b) In the documents disclosed by the Club there was indeed an email sent by JLL to the Club at 18.01 on 21 June 2018, to which a document titled ‘JLL – Derby County – Pride Park – Valuation Model 1 – 21 June 2018.pdf’ was attached. However i)That email stated (under the heading ‘Fair value on basis of Depreciated Replacement Cost’) (1) ‘Having reviewed evidence we have adopted a cost of £3,000 per seat for Pride Park, based on a total number of 33,435 at the venue’ (2) ‘We have assumed an economic life of 50 years’ (not 60 years) (3) ‘In total we have calculated a [DRC] pf £57.8m’ (not £74.4m) ii) The attachment comprised the calculation by which JLL had arrived at a DRC valuation of £57.8m (not £74.4m). That calculation (1) Used a cost per seat of £3,000 (2) Used a capacity of 33,455 39 (3) Assumed economic life for the stadium of 50 years, giving an adjusted remaining economic life of 28 years (4) Assessed depreciation at 44% and functional obsolescence at 5% c) In the Club’s disclosure there was a further email sent by JLL to the Club at 15.17 on 25 June 2018, to which a document titled ‘JLL – Derby County – Pride Park Valuation Model – Cost v2 – 25 June 2018.pdf’ was attached: i)The email (in response to a query from Mr Holt at the Club ‘How are you getting on with the revised DRC workings? Is it possible these could be sent across ahead of my 4.30pm meeting’) read ‘… as discussed, we are comfortable revising this as discussed this morning. See attached’ ii) The attachment comprised the calculation by which JLL had arrived at a DRC valuation of £74.4m. That calculation ( (1) Still used a cost per seat of £3,000 (2) Still used a capacity of 33,455 (3) Assumed an economic life for the stadium of 60 years, applied a maintenance adjustment of a further 5 years ‘due to good cap-ex’, and so assumed an adjusted remaining economic life of 43 years (4) Assessed depreciation at 28.3% and functional obsolescence at 5%. 85) Without hearing from Mr Holt it is impossible to be certain exactly a) How the ‘JLL email’ sent to the EFL on 26 June 2018 came to be sent as it was, or b) How the attachment sent to the EFL on 26 June 2018 came to be labelled as it was. The strong suspicion is however that (1) the wording of/figures in JLL’s 21 June 2018 email to the Club was changed by Mr Holt before he forwarded the same to the EFL, (2) the attachment to JLL’s 25 June 2018 email was relabelled by Mr Holt to make its nomenclature consistent with the other attachments sent by JLL on 21 June 2018, and (3) Mr Holt replaced the actual attachment to JLL’s 21 June 2018 email with that ‘renamed’ attachment; it is difficult to conceive of any other sensible explanation Disgusting club, disgusting hierarchy- minority, maybe a reasonable minority of fans equally so! No offence, but I hope there is a new Derby journey ahead- not on a Cup run or on a promotion push- but into admin! Quote Link to comment Share on other sites More sharing options...
AnotherDerbyFan Posted September 9, 2020 Share Posted September 9, 2020 1 hour ago, Mr Popodopolous said: I think the EFL should've insisted for P&S purposes of the Depreciated Replacement Cost of £74.4m personally. There and then- DRC feels a more reliable and measurable method than the profits one, for these kinds of transactions. However on the price- looking at comparable stadia, capacity, region, year of setup- feels too high. Sorry but that combined with the ridiculously low rent...hell even set against one or two other suspect RPTs for P&S it comes out high! Comparisons: Birmingham- £22.76m- Annual rent £1.5m Reading- £26.5m- Annual Rent £750,000 Reading Mk. 2- £37.5m- Annual Rent £1.5m Aston Villa- £56.7m- Annual Rent £2.6m (I think). Though this has a problem with lease length arguably. Sheffield Wednesday- £60m- Annual Rent ??- Though it is mooted as £3m per season- nice little millstone! If any commercial revenue from non matchday flows to Derby or Sevco 5112- or is it Gellaw Newco 203 now- the EFL must revisit the rent, perhaps add in a market rent for P&S purposes. I suspect your owner will therefore given the club own it, sell and leaseback Moor Farm next. Hopefully the EFL will shut the loophole pronto. 1 hour ago, Mr Popodopolous said: What evidence have we actually got for this apart from the oh so reliable words of a certain owner? Were there any genuinely dated emails or documentation backing this up? DRC seems absolutely fair enough to me for this. Profits basis? Not so much! Market Rent falling by £3.06m per season- that's different approach wise! So far, so meh...though the valuation sticks out like a sore thumb! Looks alright when £4.16m in rent is factored in. The valuations and proposed rent are still broadly consistent...until. Like I say not one penny of Pride Park commercial income that is non football related should flow to Derby. Running costs I assume ncluded within the rent? Interesting use and reiteration of the term 'purported' higher up. Now this bit is farcical- clear breach of the agreement. 100 days vs no restriction on the number. Pearce Out!! This bit is rather unusual. Professional valuers- JLL renowned professional valuers- taking advice and implementing it from a club?? Toxic club and the sooner Pearce is removed from the EFL board the better. Move on and forget about the stadium valuation. The EFL already has. 1 Quote Link to comment Share on other sites More sharing options...
AnotherDerbyFan Posted September 9, 2020 Share Posted September 9, 2020 1 hour ago, Mr Popodopolous said: This bit is bloody ridiculous. Disgusting club, disgusting hierarchy- minority, maybe a reasonable minority of fans equally so! No offence, but I hope there is a new Derby journey ahead- not on a Cup run or on a promotion push- but into admin! Fancy a bet on which club makes it to the Premier League first? Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted September 9, 2020 Author Share Posted September 9, 2020 (edited) 52 minutes ago, AnotherDerbyFan said: Move on and forget about the stadium valuation. The EFL already has. Sorry it's very questionable, elements of it. 50 minutes ago, AnotherDerbyFan said: Fancy a bet on which club makes it to the Premier League first? Probably Derby- Moor Farm for £60m anyone?? At what point in normality does a valuer take advice and make revisions at the request of the very party seeking the valuation. Quote "Dear Uncle Mel (as in the nickname), "Moor Farm is worth £60m with 10p a year rent! "EFL must accept this as it's Independent" "Your Mate, The Independent Valuer." Quote "Dear Uncle Mel (as in the nickname), "Finance it through a loan- against the club, the asset, the lease- or something! "Cashflow in and maybe the P&L boosted a bit- yet at no risk to you "Your Mate, Andy/James D." EFL have to shut that loophole pronto! It's one of the few gaping loopholes- or amend it in such a way that it is an EFL hired valuer who can make the call for P&S purposes. Reading DCFCFans again as I do periodically. Tbh Pearl Ram, I just have little time for loophole seeking, regulation spirit flouting, close to cheating, smugly owned clubs/top brass such as your club appears to be and have respectively. I'd hope clubs are exploring whether there are ways to remove Pearce from the board. Some leaks from EFL meetings if appropriate as happened to Redgate a few weeks back wouldn't go amiss either. Maybe Admin is a bit much but EFL and clubs need to be monitoring Derby like a hawk IMO. I fully expect a ridiculous overvaluation of Moor Farm in a sale and leaseback with a worked down rent. He could call the purchasing company "Uncle Mel's PissBoilers PLC" Edited September 9, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Guest East Herts Ram Posted September 9, 2020 Share Posted September 9, 2020 Please be sure to pass on our gratitude to your club for their contribution to our legal fees regarding the futile case brought by Steve Gibson, sorry, the EFL, in which we were correctly exonerated. And best of luck for the coming season. Quote Link to comment Share on other sites More sharing options...
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