[Football] Derby charged for breach of spending rules

[mikeyjh]

Well I’m glad someone understands it! Maybe you could enlighten me?

The stadium valuation was made by an independent group, accepted by HMRC and the EFL at the time. Was completed within the relevant accounting period. Allowed under the regulations.

I just don’t understand the EFL’s reasoning.

Who knows, three EFL are barking, club's position had what's been clear and, as you point out, already been accepted by EFL...

I'd just like to further applaud said EFL for announcing this, literally a couple of hours after Jim Smith was buried. A service attended by many from, and associated with DCFC. Bravo.

 

[Weststander]

Who knows, three EFL are barking, club's position had what's been clear and, as you point out, already been accepted by EFL...

I'd just like to further applaud said EFL for announcing this, literally a couple of hours after Jim Smith was buried. A service attended by many from, and associated with DCFC. Bravo.

HMRC wouldn’t investigate over valuation. They’re not the policeman of land deal values, unless for under value and the avoidance of taxes. You’re echoing Mel Morris’s soundbites.

 

[AZ Gull]

Who knows, three EFL are barking, club's position had what's been clear and, as you point out, already been accepted by EFL...

Eh?

 

[El Presidente]

Well I’m glad someone understands it! Maybe you could enlighten me?

The stadium valuation was made by an independent group, accepted by HMRC and the EFL at the time. Was completed within the relevant accounting period. Allowed under the regulations.

I just don’t understand the EFL’s reasoning.

The sale price was agreed by a firm of surveyors appointed by and paid by Mel Morris, then signed off by auditors appointed by and paid for by Mel Morris. The £80m fee was transferred from one bank account controlled by Mel Morris to another bank account controlled by Mel Morris, and resulted in a £41 million profit to Derby County Football Club Limited, a company controlled by Mel Morris which meant they had complied with the FFP loss limits.

Other clubs such as Birmingham and Reading have also sold their stadia to owners, so it’s not just Derby, Birmingham sold theirs for £22m and Reading £26m,

Personally I can’t see what the fuss is about.

 

[clapham_gull]

The sale price was agreed by a firm of surveyors appointed by and paid by Mel Morris, then signed off by auditors appointed by and paid for by Mel Morris. The £80m fee was transferred from one bank account controlled by Mel Morris to another bank account controlled by Mel Morris, and resulted in a £41 million profit to Derby County Football Club Limited, a company controlled by Mel Morris which meant they had complied with the FFP loss limits.

Other clubs such as Birmingham and Reading have also sold their stadia to owners, so it’s not just Derby, Birmingham sold theirs for £22m and Reading £26m,

Personally I can’t see what the fuss is about.

So it looks the Football are cracking down on this "loop hole" and expect an announcement regarding Reading next ?

Remarkable the Football League signed off the sales or do they by their nature await for the subsequent account to come in check WHY the stadium was sold ?

Wouldn't it be prudent for the Football League to check at the time ?

 

[El Presidente]

So it looks the Football are cracking down on this "loop hole" and expect an announcement regarding Reading next ?

Remarkable the Football League signed off the sales or do they by their nature await for the subsequent account to come in check WHY the stadium was sold ?

Wouldn't it be prudent for the Football League to check at the time ?

There’s a difference between the EFL under Shaun Harvey (a man who took both Bradford City and Leeds United into administration twice) and new supremo Rick Parry.


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[Creaky]

The sale price was agreed by a firm of surveyors appointed by and paid by Mel Morris, then signed off by auditors appointed by and paid for by Mel Morris. The £80m fee was transferred from one bank account controlled by Mel Morris to another bank account controlled by Mel Morris, and resulted in a £41 million profit to Derby County Football Club Limited, a company controlled by Mel Morris which meant they had complied with the FFP loss limits.

Other clubs such as Birmingham and Reading have also sold their stadia to owners, so it’s not just Derby, Birmingham sold theirs for £22m and Reading £26m,

Personally I can’t see what the fuss is about.

Are you implying that companies and individuals such as surveyors and accountants regulated by professional bodies can so easily be “bought” in order to falsify legal documents

 

[Barham's tash]

Are you implying that companies and individuals such as surveyors and accountants regulated by professional bodies can so easily be “bought” in order to falsify legal documents

All such firms should abide by a robust conflicts of interest policy extending to an appropriate ABC policy that would or should stop the chance of such a coincidental and unfortunate sequences of events.

Incidentally are you seriously implying that an identikit football stadium in the midlands that cost c£28m to build in 1997 has nearly tripled in value?!!!



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[Lady Whistledown]

Who knows, three EFL are barking, club's position had what's been clear and, as you point out, already been accepted by EFL...

I'd just like to further applaud said EFL for announcing this, literally a couple of hours after Jim Smith was buried. A service attended by many from, and associated with DCFC. Bravo.

What would be an appropriate timeframe, do you think? Four hours? Twelve? Three days? A week?

 

[mikeyjh]

HMRC wouldn’t investigate over valuation. They’re not the policeman of land deal values, unless for under value and the avoidance of taxes. You’re echoing Mel Morris’s soundbites.

I can see the point you're wanting to make but, in my defence, I didn't mention HMRC?!?

 

[mikeyjh]

All such firms should abide by a robust conflicts of interest policy extending to an appropriate ABC policy that would or should stop the chance of such a coincidental and unfortunate sequences of events.

Incidentally are you seriously implying that an identikit football stadium in the midlands that cost c£28m to build in 1997 has nearly tripled in value?!!!



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That would broad be in line with the property price index for the region - Outside of that, Morris (when discussing the valuation), talked about the plans they have for the stadium going forward, one can assume that any valuation would take in to account current + potential future income....

 

[Barham's tash]

That would broad be in line with the property price index for the region - Outside of that, Morris (when discussing the valuation), talked about the plans they have for the stadium going forward, one can assume that any valuation would take in to account current + potential future income....

Oh sure one can talk about future plans for the purposes of a useful accounting entry but come on there was only one reason for the aggressive/optimistic valuation and that’s the whole point.


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[Weststander]

I can see the point you're wanting to make but, in my defence, I didn't mention HMRC?!?

I see. I was referring to NSC’s Mel Morris persona [MENTION=27275]Creaky[/MENTION].

 

[Weststander]

That would broad be in line with the property price index for the region - Outside of that, Morris (when discussing the valuation), talked about the plans they have for the stadium going forward, one can assume that any valuation would take in to account current + potential future income....

Chartered Surveyors valuations can only be based on circumstances at that discrete moment in time, not on future unknowns and potential.

 

[nwgull]

That would broad be in line with the property price index for the region - Outside of that, Morris (when discussing the valuation), talked about the plans they have for the stadium going forward, one can assume that any valuation would take in to account current + potential future income....

Buildings don’t appreciate in value; they only depreciate. What appreciates is the land that they’re built on. The land that Pride Park was built on cost £1.8m, which would make Pride Park worth about 35m.

 

[Creaky]

All such firms should abide by a robust conflicts of interest policy extending to an appropriate ABC policy that would or should stop the chance of such a coincidental and unfortunate sequences of events.

Incidentally are you seriously implying that an identikit football stadium in the midlands that cost c£28m to build in 1997 has nearly tripled in value?!!!



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It’s hardly a coincidence that the same organisation paid for their accounts to be audited and for their property to be valued. Who else would you expect to pay?

When I needed a valuation for some property I hired a firm of surveyors and trusted the figure they came up with. I don’t remember them asking me what I wanted them to value it at.

 

[El Presidente]

It’s hardly a coincidence that the same organisation paid for their accounts to be audited and for their property to be valued. Who else would you expect to pay?

When I needed a valuation for some property I hired a firm of surveyors and trusted the figure they came up with. I don’t remember them asking me what I wanted them to value it at.

Were you selling the property to yourself at the time to circumvent some rules?

 

[Acker79]

https://www.dcfc.co.uk/news/2020/01/club-statement-17th-january-2020

Derby County Football Club acknowledges receipt of an EFL notice of charges in respect of the Club’s valuation associated with the sale of Pride Park stadium in June 2018, and further in respect of the Club’s amortisation policy associated with intangible fixed assets (players).

The club will strongly contest the challenge to the valuation of Pride Park stadium, as well as the newly notified charge in respect of intangible fixed asset amortisation.

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.

At all times, the Club has acted transparently with the EFL in its submissions for both FFP/P&S and, in respect of the charges above, had received written approval for all of its submissions in respect of this legislation. No allegation has been raised to the contrary by the EFL. Rather, the EFL now claims that it made a “mistake.”

The Stadium was valued by professional valuers immediately prior to the transaction. The transaction and valuation were discussed extensively with the EFL Executive, which asked for a relatively modest price adjustment which was accepted. The valuation report was prepared by a highly reputable and professional and independent firm, with industry experience, who had valued the stadium on two prior occasions, one in 2007, and one in 2013.

The Club discussed the rationale for the stadium sale with the EFL Executive, ahead of the transaction, supplied and discussed the valuation, and bar a small adjustment in respect of its FFP/P&S submissions, the Club was given written approval.

With regard to the Club’s player amortisation policy, this has been a long-term accounting policy and was again reported transparently to the EFL Executive as part of the Club’s submissions and these were again approved and signed off in writing.

While the Clubaccepts the EFL’s FFP/P&S regulations are complex and open to interpretation, it is critical when such matters have been discussed and reviewed in detail, that written approval from the EFL is the only basis on which a Club can be assured it has complied. These charges by the EFL Executive bring this fundamental aspect of governance into question. The EFL now claims it made a mistake and seeks to punish the Club that relied on the EFL’s approval. Such conduct is neither lawful nor fair.

Had the EFL not given the green light in writing in respect of both charges, the Club would have reacted accordingly. The Club cannot re-trace the steps of the actions it legitimately took in good faith as a result of EFL approval of both matters.

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.

 

[portlock seagull]

https://www.dcfc.co.uk/news/2020/01/club-statement-17th-january-2020

Derby County Football Club acknowledges receipt of an EFL notice of charges in respect of the Club’s valuation associated with the sale of Pride Park stadium in June 2018, and further in respect of the Club’s amortisation policy associated with intangible fixed assets (players).

The club will strongly contest the challenge to the valuation of Pride Park stadium, as well as the newly notified charge in respect of intangible fixed asset amortisation.

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.

At all times, the Club has acted transparently with the EFL in its submissions for both FFP/P&S and, in respect of the charges above, had received written approval for all of its submissions in respect of this legislation. No allegation has been raised to the contrary by the EFL. Rather, the EFL now claims that it made a “mistake.”

The Stadium was valued by professional valuers immediately prior to the transaction. The transaction and valuation were discussed extensively with the EFL Executive, which asked for a relatively modest price adjustment which was accepted. The valuation report was prepared by a highly reputable and professional and independent firm, with industry experience, who had valued the stadium on two prior occasions, one in 2007, and one in 2013.

The Club discussed the rationale for the stadium sale with the EFL Executive, ahead of the transaction, supplied and discussed the valuation, and bar a small adjustment in respect of its FFP/P&S submissions, the Club was given written approval.

With regard to the Club’s player amortisation policy, this has been a long-term accounting policy and was again reported transparently to the EFL Executive as part of the Club’s submissions and these were again approved and signed off in writing.

While the Clubaccepts the EFL’s FFP/P&S regulations are complex and open to interpretation, it is critical when such matters have been discussed and reviewed in detail, that written approval from the EFL is the only basis on which a Club can be assured it has complied. These charges by the EFL Executive bring this fundamental aspect of governance into question. The EFL now claims it made a mistake and seeks to punish the Club that relied on the EFL’s approval. Such conduct is neither lawful nor fair.

Had the EFL not given the green light in writing in respect of both charges, the Club would have reacted accordingly. The Club cannot re-trace the steps of the actions it legitimately took in good faith as a result of EFL approval of both matters.

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.

 

[Springal]

Good for Derby. EFL are a ****ing shambles