View Full Version : Derby going into administration
Michael Morris
17-09-21, 19:38
Derby County Football Club today announced that the Club, the ultimate holding company of the group, and all of the subsidiary companies have filed notices of intention to appoint administrators.
This action was made necessary by a number of developments. Last week, it became clear that the process which has been underway to identify a purchaser for the Club likely would not be productive over the near term, despite the number of negotiations with credible parties. Because the COVID-19 pandemic has had a severe impact on the revenues and profits of all of its businesses, the Club has been unable to service its day-to-day financial obligations. The directors had no choice but to make the tough decision to take this action and protect the Club.
The irony is that the Club’s financial forecasts show the emergence of a financially sustainable picture. Absent the COVID-19 pandemic, we undoubtedly would have been able to trade through.
However, the impact of COVID-19 pandemic and the unpredictability it has created represents too much of a strain. As the COVID-19 pandemic and lock down tightened their grip, the Club’s revenues and cash flow took a circa £20 million hit. This season, COVID-19 has continued to have a negative effect on the Club’s revenues. Unlike other sectors, football has been able to only marginally reduce its cost base with the majority of outgoings being associated with playing staff who obviously could not be furloughed. It is widely known that we had significantly reduced our wage bill, but the major benefit of these reductions were not going to take effect until this season.
The COVID-19 lockdown also meant that we were unable to have face-to-face meetings with a number of potential purchasers who could not visit the stadium or training ground. A planned sale of the club and stadium that was due to close in January 2020 collapsed when the EFL was coerced into challenging the Stadium Sale transaction, a charge that would be dismissed some 9 months later. The ongoing litigation and charges in regard to the P&S regulations and the protracted timetable for this to reach a resolution, added further uncertainty and made negotiations challenging.
These issues also led the EFL to preclude the Club from drawing down circa £8.3 million of financial assistance, as was made available to all other Championship clubs in respect of settling PAYE liabilities, further aggravating our cash flow and ability to meet our financial obligations. Even today, we await the EFL’s response in these matters. This response is important to the Club, its supporters and also to any prospective purchaser of the Club.
We wish to thank our supporters, staff and especially our creditors who have sought to help through the pandemic while we have worked to find a purchaser. The Club’s owner has provided substantial funding throughout this period, even as the process has been underway since June 2019 to find a purchaser. We are especially grateful to MSD Partners, who have been hugely supportive and have provided additional financial assistance this year, going far beyond the original loan it provided in August 2020.
We know this situation will raise concerns among our supporters. The Club respectfully asks that our supporters continue to show their support, especially to the playing staff under Wayne Rooney and our employees who have all been outstanding during these difficult times. This ongoing support in turn will be instrumental as we seek to find a new owner to take the Club forward.
We appeal to the EFL to now assist the Club and the Administrators in any way they can in the effort to find a purchaser.
We cannot stress enough how devastating it is to be forced into this position. We all – the owner, the members of the board, and our staff – are true Derby County supporters. We will continue our work under the stewardship of the Administrators to help facilitate their process and their effort to find a purchaser.
Once Administrators have been appointed in the coming days it will be customary for them to communicate with staff and supporters about timescales and processes to seek a purchaser and address creditor concerns.
valleys caveman
17-09-21, 19:45
I usually feel sorry for a club and their fans (we're all the same aren't we?) when things go wrong. But after snowgate, I don't.
It could just as easily be us in all honesty. I don't want to see any club in the shit, but it was inevitable that this was going to happen sooner rather than later. Rooney will be leaving soon, presumably?
Eric the Half a Bee
17-09-21, 19:52
I usually feel sorry for a club and their fans (we're all the same aren't we?) when things go wrong. But after snowgate, I don't.
I feel more than a bit sorry for Wycombe.
Optimistic Nick
17-09-21, 20:03
I usually feel sorry for a club and their fans (we're all the same aren't we?) when things go wrong. But after snowgate, I don't.
It's a bit petty to harp back to snowgate given the severity of the crisis they are in.... But I do sort of agree.
https://twitter.com/kieranmaguire/status/1438945558102781957?s=21
Weren’t they due a deduction for accounting jiggery pokery? It looks like they are pulling a flanker to have one set of deduction for 2 offences?
I see the above link now. Just as I thought.
If they were due a points deduction for FFP which, in all likelihood would see them relegated, then it makes sense for them to enter administration aswell and take both deductions in the same season.
They will hold the record low points total for both Premier League and Championship
Congratulations to them
If they were due a points deduction for FFP which, in all likelihood would see them relegated, then it makes sense for them to enter administration aswell and take both deductions in the same season.
I saw some journalist say if one deduction takes them down the other would be applied next season
Weren’t they due a deduction for accounting jiggery pokery? It looks like they are pulling a flanker to have one set of deduction for 2 offences?
looks like they are trying to pull a fast one again
would be time for the FA to step up and pull on its big person pants and set a example and say if you ar pulling this stunt, you can have your 2nd punishment next season
Sounds like Covid-19 hit Derby when Mel Morris took over in 2015 if not before.
cityhammer
17-09-21, 20:48
If they go to in admin don’t allow their players become free agents? Plus, they have to clear all football debts before they are allowed to continue!
If they were due a points deduction for FFP which, in all likelihood would see them relegated, then it makes sense for them to enter administration aswell and take both deductions in the same season.
I saw some journalist say if one deduction takes them down the other would be applied next season
Just had a quick look at previous examples. Seems that a few clubs a few years ago entered administration once they knew they were relegated to take the hit in the same season. That loophole was closed so Leeds and Bournemouth for example had deductions over 2 seasons in 2 different leagues.
Des Parrot
17-09-21, 21:51
Potentially 21 point deduction then.
cityhammer
17-09-21, 22:04
Potentially 21 point deduction then.
My heart bleeds. Karma is a wonderful thing.
I remember when we played them at the start of the 2002/03. We had just won promotion and their match day programme made a derogatory comment about just how far they had fallen in that they were playing Reading.
Fukk em
Eric Cartman
17-09-21, 23:22
It's a bit petty to harp back to snowgate given the severity of the crisis they are in.... But I do sort of agree.
Look man pull yourself together, it's times like these when the football community need to come together rather than split apart.... But I am thoroughly enjoying this one.
WJ99mobile
17-09-21, 23:40
I feel more than a bit sorry for Wycombe.
If pack didn’t smash in that last minute goal, they could be in league one with a massive points deduction.
They could have been the next Sunderland
They being Derby
Pack vs Rotherham letting Rotherham stay up
life on mars
17-09-21, 23:52
I feel more than a bit sorry for Wycombe.
Spot on its all about poor old badly run Derby.
It's a pity Wycombe can't sue the EFL for not taking action when they should have ie last year .
19bluebirds27
18-09-21, 06:52
Let’s be proud that our club hasn’t ever gone into administration.
Plenty have and taken the easy way out and not met it’s obligations.
Not sorry for them at all, don’t like the club or their fans - I actually prefer Forest and that’s saying something.
tforturton
18-09-21, 10:20
Got to be honest, I hate to see any club go under. I know it's survival of the fittest, what goes round comes round and all that, but this isn't a good thing to see, no matter which club it is.
they have some good youngsters, I guess people will come in for them soon
they have some good youngsters, I guess people will come in for them soon
knight, bielik, bird and sibley
Not sorry for them at all, don’t like the club or their fans - I actually prefer Forest and that’s saying something.
Do Derby see Leicester as their main rivals? Must be a bitter pill to see how well they are doing
the other bob wilson
18-09-21, 11:13
Do Derby see Leicester as their main rivals? Must be a bitter pill to see how well they are doing
No, Forest definitely. I’ve not read the club statement, but, apparently, there were plenty of references to Covid in it, when the truth is that they’d been sailing really close to the wind for years before Covid was heard of. Feel sorry for the fans, but that club deserves all it’s getting and more.
SLUDGE FACTORY
18-09-21, 11:31
Derby are a big club and I feel sorry for their loyal fans
Much prefer them to forest , Sheffield United etc
We have been so close to sliding away like they look they are going to
Mel Morris is apparently worth £500m.
Should pay all the debts off.
NottinghamBlue
18-09-21, 17:59
Do Derby see Leicester as their main rivals? Must be a bitter pill to see how well they are doing
No, it's Forest.
Do Derby see Leicester as their main rivals? Must be a bitter pill to see how well they are doing
It's going to be Chesterfield soon enough
Burton v Derby in League 1. Who would have thought it?
It's going to be Chesterfield soon enough
Or Peterborough
Ninian1962
19-09-21, 12:40
If they go to in admin don’t allow their players become free agents? Plus, they have to clear all football debts before they are allowed to continue!
The players don`t become free agents - that only happens in a Liquidation. One of the problems the Administrators will have is how to reduce the wage bill as no-one can be sold outside the transfer window and players are highly unlikely to agree to a cancellation of their contracts. One strategy used before in football club Administration is to try and do a deal with players , paying up part of their future contract income - this reduces the longer term club liability (making it more attractive for a buyer), gives the player some immediate cash and leaves them free to join a club with no transfer fee involved in January.
All football debts have to be paid in full . including transfer fee instalments and player wages (subject to a deal being done as above) and all secured creditors also paid so that a creditor with a charge over the ground or other assets either gets paid off or the debt taken on by the new owner. Also all non-secured non football debts have to be paid at least 25% of the amounts they are owed. Only if the above conditions are met can a club come out of Administration. Otherwise it will have to go into liquidation like Bury.
WJ99mobile
19-09-21, 13:39
The players don`t become free agents - that only happens in a Liquidation. One of the problems the Administrators will have is how to reduce the wage bill as no-one can be sold outside the transfer window and players are highly unlikely to agree to a cancellation of their contracts. One strategy used before in football club Administration is to try and do a deal with players , paying up part of their future contract income - this reduces the longer term club liability (making it more attractive for a buyer), gives the player some immediate cash and leaves them free to join a club with no transfer fee involved in January.
All football debts have to be paid in full . including transfer fee instalments and player wages (subject to a deal being done as above) and all secured creditors also paid so that a creditor with a charge over the ground or other assets either gets paid off or the debt taken on by the new owner. Also all non-secured non football debts have to be paid at least 25% of the amounts they are owed. Only if the above conditions are met can a club come out of Administration. Otherwise it will have to go into liquidation like Bury.
That's all well and good, but they are already struggling to fill a side
Personally I believe they will find a buyer.
Derby and Bury are 2 different animals
Bobby Dandruff
19-09-21, 17:18
I usually feel sorry for a club and their fans (we're all the same aren't we?) when things go wrong. But after snowgate, I don't.
I’m the same.
I really hope they go down and then struggle.
Unforgivable.
I feel more than a bit sorry for Wycombe.
Wycombe are, quite rightly, furious: https://www.bbc.co.uk/sport/football/58622433
stan butler
21-09-21, 14:48
Wycombe are, quite rightly, furious: https://www.bbc.co.uk/sport/football/58622433
We had nothing to play for and could have sent Derby down but Pack spoilt it :facepalm:
We had nothing to play for and could have sent Derby down but Pack spoilt it :facepalm:
Should have had his contract terminated on the spot!
stan butler
21-09-21, 15:16
Should have had his contract terminated on the spot!
I agree.
I remember us playing Hull at Ninian Park i can't remember the result but whatever happened we both sent Leeds down if i remember right?
The Hooded Claw
21-09-21, 23:55
The players don`t become free agents - that only happens in a Liquidation. One of the problems the Administrators will have is how to reduce the wage bill as no-one can be sold outside the transfer window and players are highly unlikely to agree to a cancellation of their contracts. One strategy used before in football club Administration is to try and do a deal with players , paying up part of their future contract income - this reduces the longer term club liability (making it more attractive for a buyer), gives the player some immediate cash and leaves them free to join a club with no transfer fee involved in January.
All football debts have to be paid in full . including transfer fee instalments and player wages (subject to a deal being done as above) and all secured creditors also paid so that a creditor with a charge over the ground or other assets either gets paid off or the debt taken on by the new owner. Also all non-secured non football debts have to be paid at least 25% of the amounts they are owed. Only if the above conditions are met can a club come out of Administration. Otherwise it will have to go into liquidation like Bury.
Bury haven’t gone into liquidation. They are currently in administration (just checked on Companies House), but I expect it’s a technicality as there’s not much left.
Bury haven’t gone into liquidation. They are currently in administration (just checked on Companies House), but I expect it’s a technicality as there’s not much left.
I guess that having the ground as an asset is preventing liquidation at this time. Whilst the administrators are actively trying to sell it there's still a bit of hope, but as a football club there is nothing else.
Ninian1962
22-09-21, 11:41
Bury haven’t gone into liquidation. They are currently in administration (just checked on Companies House), but I expect it’s a technicality as there’s not much left.
You are quite right and I was wrong to mention liquidation in the manner I did. The current Administration period of 12 months will shortly come to an end (the Administrator may apply for an extension if he can convince the court that there is a realistic prospect of getting an asset sale away in the near future but an extension grant is not a "given".) If the Administration fails then liquidation will follow.
The position in the Administration does not look good according to the Administrators report to creditors. No assets have bee realised apart from some credit card payments for prior services provided and most of that cash has gone in legal fees. There has been insufficient money for even paying the Administrator himself. The report suggests that there have been a number of parties expressing an interest in buying the stadium asset but only two firm offers and neither of those eventually progressed. The report also says that there is no prospect of any creditor being paid anything other than those who have a charge over the stadium and the figures suggest that even they will suffer a shortfall.
Previous arrangements with creditors (CVAs) have failed because promised payments to creditors were not made.
the other bob wilson
22-09-21, 13:32
Derby docked twelve points, what about the other nine?
https://www.bbc.co.uk/sport/football/58649432
Ninian1962
22-09-21, 15:05
Derby docked twelve points, what about the other nine?
https://www.bbc.co.uk/sport/football/58649432
The 12 point deduction is an automatic one for going into Administration. I am told that EFL want to apply a further 9 point deduction next season for the breaches of other EFL Rules that Derby have made. If they applied them this season Derby would almost certainly get relegated but would then start next season with a clean slate and have , to a degree, got away with one set of breaches.
I know the firm (Quantuma)who the Administrators work for and they are good. Also Trevor Birch the EFL CEO is himself a highly experienced Insolvency Practitioner so both sides of future negotiations and discussions certainly know their jobs in dealing with Derby.
life on mars
22-09-21, 15:07
Wonderful. The other 9 under the carpet ??
Burton v Derby in League 1. Who would have thought it?
Does this mean the Jack’s might avoid relegation ?
Burton v Derby in League 1. Who would have thought it?
Could be Derby v Chesterfield in League 2 in a couple of years
Does this mean the Jack’s might avoid relegation ?
Blame Pack. If he'd done what he usually does and blasted the ball into Row Z, rather than score and keep Derby up at the end of last season, Derby would have been relegated and the Jacks would be relegated this season. Never was a goal less welcome. As it stands, Derby and Forest look nailed on for relegation this season. Unless, last match of this season, Derby need 3 points against us to finish 4th from bottom, Pack...clear through on goal (as if), shoots/misses an open goal and keeps Derby up.
https://staceywest.net/2021/09/22/derbys-woes-are-a-sign-of-the-future-in-league-one/
The lure of Premier League football has led plenty of clubs down the wrong path; Portsmouth are another fine example of the boom or bust mentality in the second tier. The Premier League money may be the saviour of many clubs, but it is the undoing of others. Make no mistake, had Derby beaten Aston Villa in the 2019 play-off final, it would be likely that the Villans, not the Rams, would be in this dire position...
Championship clubs were spending 107% of their revenue on wages, and that’s not easy. Why don’t you try spending 107% of your income on bills? Not possible without severe problems surfacing very quickly.
A lot of positive chatter about Aston Villa recently but they were run extremely poorly while in the Championship before Chester's body and Grealish's skill took them up - they then survived (partly) by goal-line technology failing and VAR not stepping in.
Of course part of the problem is that Putin's best mate, Qatar (sportswashing) and American debt owners have completely transformed football financing and others are shooting themselves in the foot in order to keep up.
Derby docked twelve points, what about the other nine?
https://www.bbc.co.uk/sport/football/58649432
Certain to be another points deduction based upon FFP breaches. They will finish bottom.Two spaces to fill.......gulps.
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