Derby hit out at EFL and claim financial fair play charges are unlawful
Derby County have strongly rejected the charges brought against the club by the English Football League relating to the £81m sale of Pride Park to their owner Mel Morris in June 2018, and accused the league of acting unlawfully in bringing the charges.
In a strong statement, Derby said the EFL agreed in advance that the sale and its valuation were acceptable, and approved all other aspects of Derby’s 2018 financial submission under the Championship’s “profitability and sustainability” rules.
Explaining the substance of the charges, which the EFL did not do publicly, Derby said they relate to the £81.1m valuation of Pride Park when sold to Morris’s newly formed company, and to its method of amortisation, which is the way football accountancy deals with players’ values. The sale of the stadium to Morris converted a £25.3m loss in 2017-18 to a £14.6m profit, and kept Derby within the permitted limit of £39m lost by a club over three seasons if covered by an owner.
“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 said in its statement. “The club shall argue that the very bringing of the charges itself is unlawful.”
Derby said that they had been told by the EFL that the league itself had made a mistake when it approved its submissions, and the league is understood to have had its own independent valuation of Pride Park carried out, using different criteria according to its rules. Derby’s response is that the EFL is entitled to believe it made a mistake when the discussions were held and the submission approved, but not to charge the club.
“While the club accepts 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 statement said.
“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 … 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.”
An EFL spokesman said the league was not intending to add to the statement it made on Thursday announcing the charges.