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 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 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.