An independent disciplinary commission has recently slapped troubled Derby County with a £100,000 fine, penalising the EFL Championship club for their conduct in the preparation of its annual accounts. The EFL warned the Rams that they could face retrospective relegation from the Championship to League One. County were originally cleared of violating financial reporting rules. However, the EFL successfully appealed that the club were non-compliant with its Profit & Sustainability (P&S) rules.
Although the EFL was vindicated when the independent disciplinary commission agreed that Derby had fallen foul of Financial Fair Play (FFP) rules, it could not hide its “disappointment” at the Commission’s modest £100,000 penalty. The EFL insists that the fine was not “commensurate to the breaches found” in its opinion, but admitted it did not have grounds to appeal the size of the penalty.
Derby are by no means out of the woods yet. The Commission has ordered the Rams to file restated accounts for the 2015/16, 2016/17 and 2017/18 financial years. If any further irregularities are discovered, it’s almost certain that the EFL will come down hard on Derby with a points deduction for the 2021/22 Championship season.
The EFL was serious about Derby’s potential retrospective relegation to League One, with Wycombe Wanderers potentially replacing them in the second tier. They even went to the lengths of publishing an alternate fixture list, giving the Rams a full League One fixture calendar, in case the Commission deemed this action necessary.
Derby already have a suspended three-point deduction from the EFL for failing to pay their players and staff earlier this year. If they do so again before June 30 2022, the three-point penalty will be applied in the 2021/22 campaign. The club is also under a transfer embargo, restricting who manager Wayne Rooney can sign during this summer’s transfer window. Rooney is restricted solely to free agents and loan signings, with free agents only permitted to sign 12-month contracts and loan signings only permitted for up to six months at a time.
Finances in the EFL Championship have grown increasingly precarious in recent years, as many teams pump in millions to chase the Premier League dream. In the 2019/20 campaign, Premier League clubs alone posted £700m in losses and the national game itself is hemorrhaging over £100m monthly. The Rams are no different, with debts and liabilities of more than £60m – £8m of which is said to be owed in severance pay to former boss Phillip Cocu and his coaching staff.
Wayne Rooney is operating with his hands tied firmly behind his back
Rooney was recently interviewed by Derby’s in-house media team RamsTV and admitted he had “spoken to a lot of players” that demonstrated a desire to play for him and the Rams. However, Rooney admitted he wasn’t “in a position to finalize any of them”. All of this uncertainty means that County are likely to be considered as one of the favorites for relegation next term.
The club is still very much in limbo regarding its future ownership. A protracted acquisition from Spanish entrepreneur Erik Alonso never came to fruition. Current owner Mel Morris has shifted his attentions to multiple other parties that are interested. Among these parties is an American ownership group, who the local media confirmed were in dialogue with Morris last month. In addition, local entrepreneur Mike Horton has also been revealed by the BBC as a potential buyer. Horton appears to have links with financiers in the US, which could see him head up an acquisition involving funds stateside.
The Rams’ chief executive Stephen Pearce revealed that the club and Morris was working “tirelessly on the ownership model” and that these talks were taking place with “multiple parties”.
It has certainly been an expensive error of judgement from lifelong Derby fan Mel Morris, who has pumped tens of millions of pounds into the East Midlands club. His investment has long raised eyebrows among fans of other EFL Championship clubs, who viewed Morris’ funding as unsustainable for the division – and so it has proved.