All kicking off at Derby

[Ever the pessimist]

6 minutes ago, ChapSmurf said:

If you want to know exactly what has happened at Derby, and why they are where they are with regards to the EFL, I will break this down for you - as simply as is possible because it is quite complex. For any Accountants, I understand this is related to FRS 102 (I'm not an Accountant).

 

Mel Morris basically made his fortune by firstly selling the website uDate and then selling King software, who made the Candy Crush saga, to Activision|Blizzard,. He pocketed around £470M for these two takeovers. In 2015 he increased his 22% share in DCFC and took over shortly after. Since then, he has spunked around £200M on big name players and managers. That's not say DCFC are out of pocket for that amount, but probably close.

 

Like all financially struggling clubs, something had to be done. What DCFC/MM did was to change the way they reported the amortisation of their players. Amortisation is easiest explained like this. If a player is bought for £4M on a 4 year contract, rather than £4M going out of that years accounts, the value of the player is divided by the contract length. So 4/4 is 1, and therefore £1M per season, for 4 seasons is applied to the accounts. You are essentially reducing the value of the player, like reducing the value of a car as it gets older.

 

What DCFC did was to not reduce the value of the player until the 3rd season, claiming, in their eyes, that the players value - as an asset - hadn't reduced over the first 2 seasons. There is nothing illegal in this, but it is bending the rules to almost breaking point.

 

Realising this wasn't enough to stop them sliding beyond the £39M ceiling, they legally sold their ground to a new company owned by MM. MM paid £80M for the ground, £40M above its value and £70M above its resale value.

 

The EFL then caught up with DCFC regarding the way they were reporting amortisation, and so DCFC then said "OMG! We've just found an extra £40M down the back of the sofa from the stadium sale. We valued it at £40M, but got paid £80M for it. Aren't we clever lucky"

 

And that is where DCFC are currently at. They have bent the rules to the point where they have absolutely p!ssed the EFL off. However, from what I know and understand, they haven't done anything illegal but have now tried it on three times, firstly with amortisation, secondly with the over-inflated stadium sale and then with the reduction of the stadium value and somehow finding an extra £40M to add to their accounts.

 

The big picture is that they are in financial peril. So are many clubs, but DCFC situation seems to be an extremely worrying one, especially for their fans.

 

The above is my understanding of what has happened. I am not claiming it is 100% accurate, but it's not far off if I do have anything wrong.

I had sympathy until reading that. I foooking hated getting invites to play Candy Crush though, so hope Morris crashes and burns.

[ChapSmurf]

1 minute ago, Ever the pessimist said:

I had sympathy until reading that. I foooking hated getting invites to play Candy Crush though, so hope Morris crashes and burns.

 

£1M per day they were making at one point with Candy Crush. I think King software got sold for something like £1.5Bn. Stroke that cat!

[slinger208b]

On 05/08/2021 at 12:07, soldierboyblue said:

Basically the players are not currently under contract so they need to sign one. However he has missed off their wages! But for them to be able to play at the weekend the need to be registered ASAP

 

So they can choose their own wage!..

 

[myHero]

On 05/08/2021 at 12:10, Belfast Owl 2 said:

Not paying wages you say?

 

Derby copying us again.

If only they had a better estate agent and had managed to sell their stadium for £60m

 

[thekimmyowl]

I’m struggling to see how they can get away with the sale of the football ground(us too) when you sell it has to be independently valued, this is a must from HMRC (known as red book) and there is no work around this and I’m not convinced we are out of the water on this yet.

The biggest single problem with all this and why P&S is flawed, had Derby actually got promoted they would’ve been laughing and probably never looked back, you can see why the temptation is there.

[Triple O]

6 minutes ago, thekimmyowl said:

I’m struggling to see how they can get away with the sale of the football ground(us too) when you sell it has to be independently valued, this is a must from HMRC (known as red book) and there is no work around this and I’m not convinced we are out of the water on this yet.

The biggest single problem with all this and why P&S is flawed, had Derby actually got promoted they would’ve been laughing and probably never looked back, you can see why the temptation is there.

Sure both grounds were "independently" valued.

[@owlstalk]

8 minutes ago, thekimmyowl said:

 

The biggest single problem with all this and why P&S is flawed, had Derby actually got promoted they would’ve been laughing and probably never looked back, you can see why the temptation is there.

That's not a flaw of P&S though

That's a flaw of the chairman's morals and ethics

[Gob_Bluth]

20 hours ago, ChapSmurf said:

 

£1M per day they were making at one point with Candy Crush. I think King software got sold for something like £1.5Bn. Stroke that cat!

 

Used to walk past their offices in Soho every day on my way to work, the reception area was proper kitted out with tech gear.

 

Looked proper upmarket 

[Raminpeace]

On 05/08/2021 at 14:36, catdog1121 said:

At this rate Rooney will have to dust off his boots...

we’re not that desperate

[Lawrie Madden]

21 hours ago, ChapSmurf said:

If you want to know exactly what has happened at Derby, and why they are where they are with regards to the EFL, I will break this down for you - as simply as is possible because it is quite complex. For any Accountants, I understand this is related to FRS 102 (I'm not an Accountant).

 

Mel Morris basically made his fortune by firstly selling the website uDate and then selling King software, who made the Candy Crush saga, to Activision|Blizzard,. He pocketed around £470M for these two takeovers. In 2015 he increased his 22% share in DCFC and took over shortly after. Since then, he has spunked around £200M on big name players and managers. That's not say DCFC are out of pocket for that amount, but probably close.

 

Like all financially struggling clubs, something had to be done. What DCFC/MM did was to change the way they reported the amortisation of their players. Amortisation is easiest explained like this. If a player is bought for £4M on a 4 year contract, rather than £4M going out of that years accounts, the value of the player is divided by the contract length. So 4/4 is 1, and therefore £1M per season, for 4 seasons is applied to the accounts. You are essentially reducing the value of the player, like reducing the value of a car as it gets older.

 

What DCFC did was to not reduce the value of the player until the 3rd season, claiming, in their eyes, that the players value - as an asset - hadn't reduced over the first 2 seasons. There is nothing illegal in this, but it is bending the rules to almost breaking point.

 

Realising this wasn't enough to stop them sliding beyond the £39M ceiling, they legally sold their ground to a new company owned by MM. MM paid £80M for the ground, £40M above its value and £70M above its resale value.

 

The EFL then caught up with DCFC regarding the way they were reporting amortisation, and so DCFC then said "OMG! We've just found an extra £40M down the back of the sofa from the stadium sale. We valued it at £40M, but got paid £80M for it. Aren't we clever lucky"

 

And that is where DCFC are currently at. They have bent the rules to the point where they have absolutely p!ssed the EFL off. However, from what I know and understand, they haven't done anything illegal but have now tried it on three times, firstly with amortisation, secondly with the over-inflated stadium sale and then with the reduction of the stadium value and somehow finding an extra £40M to add to their accounts.

 

The big picture is that they are in financial peril. So are many clubs, but DCFC situation seems to be an extremely worrying one, especially for their fans.

 

The above is my understanding of what has happened. I am not claiming it is 100% accurate, but it's not far off if I do have anything wrong.

The EFL have pronounced their version of "Amortisation" outside they rules and have required them to resubmit Accounts from when they went that route .

They are knackered Morris only did it to appear to be compliant with the Profit and Sustainability rules so there is no way that when resubmitted the accounts will be under the £39m

We were their target before and they got us Derby are their in their sights and will suffer the same fate or worse 

[ChapSmurf]

9 minutes ago, Raminpeace said:

we’re not that desperate

 

How do you think this will all pan out for your club? It doesn't look good from the outside looking in, but then rumours and speculation aren't the same as cold hard facts.

[ChapSmurf]

1 minute ago, Lawrie Madden said:

The EFL have pronounced their version of "Amortisation" outside they rules and have required them to resubmit Accounts from when they went that route .

They are knackered Morris only did it to appear to be compliant with the Profit and Sustainability rules so there is no way that when resubmitted the accounts will be under the £39m

We were their target before and they got us Derby are their in their sights and will suffer the same fate or worse 

 

Absolutely. The EFL have requested DCFC to re-submit their accounts, which is where the £40M down the back of the sofa comes in to play. You correctly said that they will definately exceed the £39M upper-ceiling once they have re-submitted but if they can pull the rabbit out of the hat with the stadium sale over-payment, they may squeak through again. They do seem to be using every trick at their disposal to avoid the breach. Whether or not they can pull this off remains to be seen.

 

The thing is though, if MM wanted to, he could easily cover what DCFC have spent. Its FFP that is restriciting him, and restricting DC and others. It's these rules and clubs like Derby and ours trying to compete with clubs receiving parachute payments that's making us bend the rules to breaking point.

 

[Raminpeace]

On 05/08/2021 at 16:35, Pieman said:

Absolutely terrible situation, I feel for the Derby fans. They have always been a good club and great adversary’s of ours. Mark Wright, Dean Saunders, good old Shilts. 
 

Hope Raminpeace will be along soon to fill us in…

hello hello

well I’m just catching up with this thread.
basically Mel Morris had a meeting with selected fans group representatives

they were made to sign a non-disclosure agreement prior to attending.

he moaned about his responsibility for clearing up the mess he created.

 

some comments were released but not a lot.

he made a comment that he couldn’t understand why managers didn’t play the academy players more, instead of signing all these old players who block their progress - since the academy was rated in the top 10 in the country.

That then upset the older players on trial who are patiently waiting for offers.

the claim is that they were waiting for the EFL to confirm how many players could be signed and at what wages and therefore the contracts were blank but the forms apparently had to be signed to get players registered?
 

three players subsequently signed including a goalkeeper? 
this indicates that marshall is being shown the door.

 

we can just about scramble a team together for today.

meanwhile this circus carries on until the resolution of the accounts etc.

generally the fans are rallying but there is no great love for Rooney and little or no love for Morris. 

 

One final comment - Derby fans were not celebrating sheff wed’s 12 point deduction at all. We saw a club in a similar mess to our own,  damaged by mismanagement. Generally the feeling is that there is something fundamentally wrong with ffp and the current arrangements. Neither Derby nor Birmingham nor Wednesday had spent that much money to end up in this big a mess. When you sign players you have to balance the books, but we signed so much crap we couldn’t sell them (apart from vydra). It’s easy to get in a mess, particularly if the chairman manages the club like a pools winner with little or no strategy.
 

I was pleased that the Sheff wed 12 points deduction was cut to 6. I would have preferred if 6 was cut to nil because footballing issues should be decided on the pitch not by accountants and administrators. Anyone can check back my posts to see that this has always been my position, even if it meant Derby went down instead of Wednesday.

 

I came to this forum to find out about Eric ‘daydream believer’ Alonso, but found a forum that seemed to have a good sense of humour.
 

I shalln’t get into squabbles about club loyalties and who hates who. MM has done tremendous damage to our reputation but that is his fault not ours. Derby are a club that generally tries to play decent football. We have never been a dirty team. The players that represent us are the Kevin hectors, the Paulo Wanchopes and the will hughes. We haven’t had much to celebrate over the last 25 years. One great win at Leeds under Frank. A good season under George Burley. A flukey promotion under Mad Billy Davies. Other than that it has been wall to wall .

But we keep on supporting them, hoping for something.

 

not dissimilar to you lot really.

 

 

 

[daleblue]

1 hour ago, @owlstalk said:

That's not a flaw of P&S though

That's a flaw of the chairman's morals and ethics

 

Leave it, just for once, leave the slagging until after the match, was in a good mood and looking forward to the game,

only to deflated by vindictive posts about the Chairman, let's enjoy the day, I'm sure they'll be more opportunities for 

you to slag him off after the game.

(I know this wasn't aimed directly at our chairman, but we do know how you work)

[ANDY]

Love the club

 

love the team 

 

hate the chairman. 

[stocksyuto]

56 minutes ago, Raminpeace said:

we’re not that desperate

Did you lot have sone aluko on trial? Just gone to Ipswich 

[Jim]

Wouldn’t be surprised to see Derby win today as I see Huddersfield being one of their main relegation rivals.

[Lawrie’s Left Peg]

30 minutes ago, Raminpeace said:

hello hello

well I’m just catching up with this thread.
basically Mel Morris had a meeting with selected fans group representatives

they were made to sign a non-disclosure agreement prior to attending.

he moaned about his responsibility for clearing up the mess he created.

 

some comments were released but not a lot.

he made a comment that he couldn’t understand why managers didn’t play the academy players more, instead of signing all these old players who block their progress - since the academy was rated in the top 10 in the country.

That then upset the older players on trial who are patiently waiting for offers.

the claim is that they were waiting for the EFL to confirm how many players could be signed and at what wages and therefore the contracts were blank but the forms apparently had to be signed to get players registered?
 

three players subsequently signed including a goalkeeper? 
this indicates that marshall is being shown the door.

 

we can just about scramble a team together for today.

meanwhile this circus carries on until the resolution of the accounts etc.

generally the fans are rallying but there is no great love for Rooney and little or no love for Morris. 

 

One final comment - Derby fans were not celebrating sheff wed’s 12 point deduction at all. We saw a club in a similar mess to our own,  damaged by mismanagement. Generally the feeling is that there is something fundamentally wrong with ffp and the current arrangements. Neither Derby nor Birmingham nor Wednesday had spent that much money to end up in this big a mess. When you sign players you have to balance the books, but we signed so much crap we couldn’t sell them (apart from vydra). It’s easy to get in a mess, particularly if the chairman manages the club like a pools winner with little or no strategy.
 

I was pleased that the Sheff wed 12 points deduction was cut to 6. I would have preferred if 6 was cut to nil because footballing issues should be decided on the pitch not by accountants and administrators. Anyone can check back my posts to see that this has always been my position, even if it meant Derby went down instead of Wednesday.

 

I came to this forum to find out about Eric ‘daydream believer’ Alonso, but found a forum that seemed to have a good sense of humour.
 

I shalln’t get into squabbles about club loyalties and who hates who. MM has done tremendous damage to our reputation but that is his fault not ours. Derby are a club that generally tries to play decent football. We have never been a dirty team. The players that represent us are the Kevin hectors, the Paulo Wanchopes and the will hughes. We haven’t had much to celebrate over the last 25 years. One great win at Leeds under Frank. A good season under George Burley. A flukey promotion under Mad Billy Davies. Other than that it has been wall to wall .

But we keep on supporting them, hoping for something.

 

not dissimilar to you lot really.

 

 

 

Fantastic post mate. Spot on in all you say. Hope your club finds a way out of this mess. 

[SiJ]

10 minutes ago, Jim said:

Wouldn’t be surprised to see Derby win today as I see Huddersfield being one of their main relegation rivals.

Sort of thing that happens.

 

I thought Huddersfield looked pretty blunt up top until Rhodes came on.

[ANDY]

Don’t hudds have a covid outbreak promble ?