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Actually reading on their forum apparently they've been doing it for years and the EFL have said it's fine.

"The EFL said it's fine" seems to be their entire defence though so take that for whatever it's worth.

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The article regarding Derby is in the Times today. Thought it would be an interesting read but you have to be a subscriber. https://www.thetimes.co.uk/edition/sport/unusual-accounting-may-have-cost-derby-further-30-million-0gddnsdbt

Derby really are in hot water these days aren't they 🙂 But if everything has been done with EFL's blessing then the real idiots here are the people in the EFL and I can see Derby getting off with a change of practise.

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57 minutes ago, Borodane said:

The article regarding Derby is in the Times today. Thought it would be an interesting read but you have to be a subscriber. https://www.thetimes.co.uk/edition/sport/unusual-accounting-may-have-cost-derby-further-30-million-0gddnsdbt

Derby really are in hot water these days aren't they 🙂 But if everything has been done with EFL's blessing then the real idiots here are the people in the EFL and I can see Derby getting off with a change of practise.

That’s pretty much the way I see it. Derby knew they were taking the *** but effectively operating with the rules. It’s the EFL that need to up their game. And if they do sanction Derby they’ll get pulled apart in the courts 

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I just refuse to believe the EFL are stupid enough to have brought the charges if they weren't confident they would win. I know they make some dumb dumb decisions from time to time but this would be next level stupid.

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3 hours ago, Borodane said:

The article regarding Derby is in the Times today. Thought it would be an interesting read but you have to be a subscriber. https://www.thetimes.co.uk/edition/sport/unusual-accounting-may-have-cost-derby-further-30-million-0gddnsdbt

Derby really are in hot water these days aren't they 🙂 But if everything has been done with EFL's blessing then the real idiots here are the people in the EFL and I can see Derby getting off with a change of practise.

For those who are not subscribers, the gist of it is -

Standard practice for clubs, including Boro, is to take the transfer fee, plus extras and write it off over length of contract. So Britt transfer fee at say £15m over 4 years would be £3.75m cost per year. Derby changed this in 2015 to say that “Players registrations are written down for impairment  when the carrying value exceeds the amount recoverable  through use or sale”.
this bit in bold is what is written in their annual accounts. In practice what it means is they would value each player at a theoretical resale value. So at end of year one, if Britt was still reckoned to be worth £15m on transfer market, then you don’t charge any write down. In practice you could have agents fees etc. , so Derby would write down on average 10% - £1.5m in Britt case in years one two and three. 

This obviously gives you a problem in year four, if you haven’t sold the player and don’t want to offer him a new contract. Then you suddenly make a huge loss. If, of course, you get promotion, like Villa, the problem maybe goes away, or if you happen to have sold your stadium for a huge profit in year three, then  it doesn’t matter if you make large losses through writing players down in that year (or the next two years for FFP three year rules).

In the end, over a long period of time the total costs must come out to the same - it’s the short term benefit that Derby have gained that is the issue.

As for their argument that the EFL approved this, I guess what they mean is that they submitted their accounts to the EFL, including the bit in bold, and EFL did not query the accounts. So it depends whether EFL use accountants to check the annual accounts or just accept the figures.

however, the EFL rules include this catch all:-

3.8 Each Championship Club shall, at all times and in all matters within the scope of these Rules, behave with the utmost good faith both towards The League and the other Championship Clubs (provided always that only The League shall have the right to bring any action whatsoever for any alleged breach of this requirement).  Without prejudice to the generality of the foregoing, Championship Clubs shall not manage their affairs or submit Fair Play Information which is intended to seek to or does take any unfair advantage in relation to the assessment of fulfilment (or non-fulfilment) of the Fair Play Requirements.

My guess is that the EFL argument is that Derby are trying to take unfair advantage and not acting in good faith. 

 

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2 hours ago, Brunners said:

I just refuse to believe the EFL are stupid enough to have brought the charges if they weren't confident they would win. I know they make some dumb dumb decisions from time to time but this would be next level stupid.

Derby will argue it is within accounting rules and approved by their auditors and that they complied with EFL rules by submitting their accounts with info in. EFL will argue they have the right to decide whether a practice gives unfair advantage and they think Derby have bent the rules to gain such an unfair advantage. 
EFL will have got their lawyers to check it carefully and agree it contravenes rules.
Derby, presumably will have got their lawyers to confirm it is ok.

A judge could go either way, and that is problem with most legal suits-  They are usually a shade of grey, not black or white. 
I guess if SG hadn’t made such a fuss, EFL might have preferred to sweep it under the carpet ( if they even realised it) and quietly tightened up the rules to stop it happening again.

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23 minutes ago, ScarBoro said:

however, the EFL rules include this catch all:-

3.8 Each Championship Club shall, at all times and in all matters within the scope of these Rules, behave with the utmost good faith both towards The League and the other Championship Clubs (provided always that only The League shall have the right to bring any action whatsoever for any alleged breach of this requirement).  Without prejudice to the generality of the foregoing, Championship Clubs shall not manage their affairs or submit Fair Play Information which is intended to seek to or does take any unfair advantage in relation to the assessment of fulfilment (or non-fulfilment) of the Fair Play Requirements.

My guess is that the EFL argument is that Derby are trying to take unfair advantage and not acting in good faith. 

 

I'm no lawyer or accountant or anything akin to that but this seems pretty important to me and in how I judge that, even should they be otherwise abiding by the laws, they are acting in a way to circumvent them to keep spending an unsustainable amount of money for an attempt at short-term advantage. The whole reason the rules exist is to stop clubs from doing that and it seems realistic to me to expect that even in the case where there is some loophole around the rules as they are written should be dealt with in the same way as they deal with people not abiding by the rules.

The intent by clubs like Derby to record a reasonable income vs. their outgoings by selling their own stadium to themselves (and in the case of Birmingham, literally making a company called 'Birmingham City Stadium Ltd' to sell it to) is surely an attempt to bypass the mistakes they've made in not abiding by the rules to try and maintain whatever financial advantage they have over other clubs. The laws may not be written to the letter but the act of operating unsustainably needs to be able to be tackled regardless of how many ways the laws are worked around.

 

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2 hours ago, ScarBoro said:

As for their argument that the EFL approved this, I guess what they mean is that they submitted their accounts to the EFL, including the bit in bold, and EFL did not query the accounts. So it depends whether EFL use accountants to check the annual accounts or just accept the figures.

That's what I 🤓 would like to know because it appears from the outside looking in that they haven't been examining them all that closely.

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2 hours ago, ScarBoro said:

Derby will argue it is within accounting rules and approved by their auditors and that they complied with EFL rules by submitting their accounts with info in. EFL will argue they have the right to decide whether a practice gives unfair advantage and they think Derby have bent the rules to gain such an unfair advantage. 
EFL will have got their lawyers to check it carefully and agree it contravenes rules.
Derby, presumably will have got their lawyers to confirm it is ok.

A judge could go either way, and that is problem with most legal suits-  They are usually a shade of grey, not black or white. 
I guess if SG hadn’t made such a fuss, EFL might have preferred to sweep it under the carpet ( if they even realised it) and quietly tightened up the rules to stop it happening again.

I think that's exactly what it's about.  Gibson is in the process of taking legal action against them so they try and take action to head that off.  If they succeed then they can turn around and say that Derby have been punished and if the independent panel and/or further court proceedings find in Derby's favour then Gibson wouldn't have a case I assume.

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2 hours ago, wilsoncgp said:

I'm no lawyer or accountant or anything akin to that but this seems pretty important to me and in how I judge that, even should they be otherwise abiding by the laws, they are acting in a way to circumvent them to keep spending an unsustainable amount of money for an attempt at short-term advantage. The whole reason the rules exist is to stop clubs from doing that and it seems realistic to me to expect that even in the case where there is some loophole around the rules as they are written should be dealt with in the same way as they deal with people not abiding by the rules.

The intent by clubs like Derby to record a reasonable income vs. their outgoings by selling their own stadium to themselves (and in the case of Birmingham, literally making a company called 'Birmingham City Stadium Ltd' to sell it to) is surely an attempt to bypass the mistakes they've made in not abiding by the rules to try and maintain whatever financial advantage they have over other clubs. The laws may not be written to the letter but the act of operating unsustainably needs to be able to be tackled regardless of how many ways the laws are worked around.

 

Good faith clauses like this are a catch all but they are also open to interpretation.  So Derby say we acted in good faith, we asked you if what we were going to do was ok before we did it and only after you confirmed it was ok did we then carry it out.  If you'd said from the beginning that it wasn't ok then we wouldn't have done it.   

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2 minutes ago, Changing Times said:

I think that's exactly what it's about.  Gibson is in the process of taking legal action against them so they try and take action to head that off.  If they succeed then they can turn around and say that Derby have been punished and if the independent panel and/or further court proceedings find in Derby's favour then Gibson wouldn't have a case I assume.

If you look at the EFL rule, although the Clubs have to act In good faith towards each other, only the league can take action against a club for not doing so. On that basis, SG couldn’t sue Derby, whatever he though, or could prove. Hence he put pressure on league to uphold their own rules. 
As you say, if the league fail in their action, SG can go no further. If they succeed however, then the bit stopping a Club taking action against another for alleged breeches becomes irrelevant. It could then mean SG would take action against Derby - not for actually breaking the rules, but for the financial loss Boro suffered because of a proven breech.

problem is, EFL would probably rather this all went away, And sometimes winning a legal argument depends how much effort you put into proving it.

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3 minutes ago, ScarBoro said:

If you look at the EFL rule, although the Clubs have to act In good faith towards each other, only the league can take action against a club for not doing so. On that basis, SG couldn’t sue Derby, whatever he though, or could prove. Hence he put pressure on league to uphold their own rules. 
As you say, if the league fail in their action, SG can go no further. If they succeed however, then the bit stopping a Club taking action against another for alleged breeches becomes irrelevant. It could then mean SG would take action against Derby - not for actually breaking the rules, but for the financial loss Boro suffered because of a proven breech.

problem is, EFL would probably rather this all went away, And sometimes winning a legal argument depends how much effort you put into proving it.

Yeah, he could take action against them but his case against the EFL would done unless he could take action against them as well for financial loss?  I wonder what valuation they'd put on the financial loss?  I assume they'd have to bring PL revenue into it to make it worthwhile otherwise you're just talking about losing out on an extra couple of play off games.  Leeds would have a stronger case I assume having lost to them in the play offs?

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I'm not going to discuss it too much as I know people find it boring, but it is very interesting that it is Derby's actual reporting and accounting practises that are also being questioned.

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Not sure if it would have any implications as we won anyway, but Barnsley player failed drugs test in November and was in their team on the night we played them...are clubs responsible for players actions in cases like this or is it all down to the individual....not implying anything, just curious as to whether there is a recognised policy in place or things are assessed as isolated incidents.

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