Derby County deal expected to collapse

[Richie K]

I think Ashley would be the perfect owner for them to get them back on a sound financial footing.

 

[Tommy]

I think Ashley would be the perfect owner for them to get them back on a sound financial footing.

I agree, I was telling my derby supporting mates that he would actually do a job, get them back to the championship eventually and then who knows

 

[halfpast3]

50m and sky have said it's the lowest bid

I’d love to know how a club in massive trouble like this, with no ground, no training ground and 4 players ( I think I’m correct with these) plus loads of debt that needs sorting or I think they could also have a points deduction again can get a load of bids with 50 being the lowest. Yet when we were for sale coming into league 1 we went for about 35/15 depending on the parachute payment issue. Had a cracking massive ground, an unbelievable training ground, a cat 1 academy and no debt.

 

[Guinness Guzzler]

I’d love to know how a club in massive trouble like this, with no ground, no training ground and 4 players ( I think I’m correct with these) plus loads of debt that needs sorting or I think they could also have a points deduction again can get a load of bids with 50 being the lowest. Yet when we were for sale coming into league 1 we went for about 35/15 depending on the parachute payment issue. Had a cracking massive ground, an unbelievable training ground, a cat 1 academy and no debt.

I was sort of wondering that like! I know we were in pretty bad shape but, even after a parachute payment leaving, we had another one to come. Added to the infrastructure etc it does make me wonder why Derby would be £15m more! @Grumpy Old Man any obvious reasons? Still seems like our value would be around the £30m mark, which given we've got no external debt, in the championship, with cracking facilities just seems crazy compared to Derby

 

[Hank Scorpio]

I’d love to know how a club in massive trouble like this, with no ground, no training ground and 4 players ( I think I’m correct with these) plus loads of debt that needs sorting or I think they could also have a points deduction again can get a load of bids with 50 being the lowest. Yet when we were for sale coming into league 1 we went for about 35/15 depending on the parachute payment issue. Had a cracking massive ground, an unbelievable training ground, a cat 1 academy and no debt.

Tbf mate, we were a mess mind. Weren’t we still losing £20-30m a season?

 

[halfpast3]

Tbf mate, we were a mess mind. Weren’t we still losing £20-30m a season?

Lost 11m in the first season, just had a look there. I know you can’t really guess what Derby will lose but they still need to put a squad together and that won’t be cheap if they want to be mixing it at the top end of the table.

I was sort of wondering that like! I know we were in pretty bad shape but, even after a parachute payment leaving, we had another one to come. Added to the infrastructure etc it does make me wonder why Derby would be £15m more! @Grumpy Old Man any obvious reasons? Still seems like our value would be around the £30m mark, which given we've got no external debt, in the championship, with cracking facilities just seems crazy compared to Derby

I didn’t even think about the fact it was about the same as we come into the championship from what we were told.

 

[Fetch Fletch]

I’d love to know how a club in massive trouble like this, with no ground, no training ground and 4 players ( I think I’m correct with these) plus loads of debt that needs sorting or I think they could also have a points deduction again can get a load of bids with 50 being the lowest. Yet when we were for sale coming into league 1 we went for about 35/15 depending on the parachute payment issue. Had a cracking massive ground, an unbelievable training ground, a cat 1 academy and no debt.

Somehow it’ll be the fans fault mate.

 

[Hank Scorpio]

Lost 11m in the first season, just had a look there. I know you can’t really guess what Derby will lose but they still need to put a squad together and that won’t be cheap if they want to be mixing it at the top end of the table.

I didn’t even think about the fact it was about the same as we come into the championship from what we were told.

We ended up losing £11m but wasn’t that only because he cut costs hugely?

Didn’t even the EFL describe our financial situation as one of the worst they had encountered?

 

[RichD]

We ended up losing £11m but wasn’t that only because he cut costs hugely?

Didn’t even the EFL describe our financial situation as one of the worst they had encountered?

But not worse enough to deduct points like Derby..No disrespect to Derby county but it's no where never the size of our club. They don't own their ground or training facilities (so I've been told) yet seem to be priced nearly twice as much as us ?

 

[Grumpy Old Man]

I was sort of wondering that like! I know we were in pretty bad shape but, even after a parachute payment leaving, we had another one to come. Added to the infrastructure etc it does make me wonder why Derby would be £15m more! @Grumpy Old Man any obvious reasons? Still seems like our value would be around the £30m mark, which given we've got no external debt, in the championship, with cracking facilities just seems crazy compared to Derby

In administration, and not owning their ground, there's no way that DCFC, as an entity, are worth anything like that. The big unknown is how much it will cost to prise Pride Park out of the hands of Mel Morris. This is something of a distress purchase for a buyer of DCFC if the club wants not to be another Coventry. It could well be that bidders are being held to ransom to Morris, pushing up the total cost.

In addition, given our infrastructure, £30m is quite a low valuation for Sunderland (the SoL alone is valued at £91m). This really reflects the appalling management of the club over the last few years, and the lack of underlying goodwill (the difference between valuation and asset values) in the business. To me, it looks like they're overvalued, and we're overvalued.

 

[molthemackem]

In administration, and not owning their ground, there's no way that DCFC, as an entity, are worth anything like that. The big unknown is how much it will cost to prise Pride Park out of the hands of Mel Morris. This is something of a distress purchase for a buyer of DCFC if the club wants not to be another Coventry. It could well be that bidders are being held to ransom to Morris, pushing up the total cost.

In addition, given our infrastructure, £30m is quite a low valuation for Sunderland (the SoL alone is valued at £91m). This really reflects the appalling management of the club over the last few years, and the lack of underlying goodwill (the difference between valuation and asset values) in the business. To me, it looks like they're overvalued, and we're overvalued.

Those are the two big questions then comes finance to rebuild the playing staff and day to day running cost....the running costs and players they need will be neck end of £30m+ Thats without the debt to HRMC who will not let go in this present cost of living crisis and other creditors.

 

[harryCLSsafc]

who in their right mind would pay £50m for Derby in their current state? Youre buying nowt. They dont even own their ground. Madness.

 

[mikemanc]

I was sort of wondering that like! I know we were in pretty bad shape but, even after a parachute payment leaving, we had another one to come. Added to the infrastructure etc it does make me wonder why Derby would be £15m more! @Grumpy Old Man any obvious reasons? Still seems like our value would be around the £30m mark, which given we've got no external debt, in the championship, with cracking facilities just seems crazy compared to Derby

Whoever buys Derby has to find a way to pay £30m to HMRC and I think over creditors are around the £20m mark. So it isn't so much that Derby are valued at £50m (no ground, 5 players etc), it's more that's the minimum amount of cash a new owner needs to have available to settle their outstanding debts. Why anyone would want to do that beyond love of the club I don't know. You'll likely have to spend the think end of £100m to get to the premier league.

 

[kildaremackem]

Whoever buys Derby has to find a way to pay £30m to HMRC and I think over creditors are around the £20m mark. So it isn't so much that Derby are valued at £50m (no ground, 5 players etc), it's more that's the minimum amount of cash a new owner needs to have available to settle their outstanding debts. Why anyone would want to do that beyond love of the club I don't know. You'll likely have to spend the think end of £100m to get to the premier league.

good post..but the other creditors-if not foot ball creditors-wont be getting paid ion full.

 

[stapler]

Those are the two big questions then comes finance to rebuild the playing staff and day to day running cost....the running costs and players they need will be neck end of £30m+ Thats without the debt to HRMC who will not let go in this present cost of living crisis and other creditors.

HMRC will not have a choice other than to let go of the debts owed to it in exchange for pennies in the pound. That's what happens to companies in administration.*

Their assets - including their businesses and subsidiaries - are sold free of the company's debts** and the creditors have to make do with a pro-rata distribution from what is left.

* There are avenues out of administration that don't involve creditors taking a haircut but they are rare.
** Unless the buyer voluntarily agrees to take on the debt. This sometimes happens with trade creditors, because it helps with and is sometimes vital for the continuation of the business. I have never heard of anybody voluntarily taking on tax debts.

Whoever buys Derby has to find a way to pay £30m to HMRC and I think over creditors are around the £20m mark. So it isn't so much that Derby are valued at £50m (no ground, 5 players etc), it's more that's the minimum amount of cash a new owner needs to have available to settle their outstanding debts. Why anyone would want to do that beyond love of the club I don't know. You'll likely have to spend the think end of £100m to get to the premier league.

No they won't. They will have to pay any debts that they are required to pay under league rules in order to maintain their place in the league* + a sum the administrator is willing to accept for the business.

The administrator does not have to wait for a bid that clears all the debts. The bid just had to be better for the creditors than a liquidation.

* Legally there is no requirement to do this, but the business is worth far more with a league place than without one so it would probably be mad not to.

 

[mikemanc]

good post..but the other creditors-if not foot ball creditors-wont be getting paid ion full.

No but it's still £5m if you don't want to incur a 15 point penalty and you then have to worry about running the club so not surprised that's the kind of figure you need to prove you are suitable.

HMRC will not have a choice other than to let go of the debts owed to it in exchange for pennies in the pound. That's what happens to companies in administration.*

Their assets - including their businesses and subsidiaries - are sold free of the company's debts** and the creditors have to make do with a pro-rata distribution from what is left.

* There are avenues out of administration that don't involve creditors taking a haircut but they are rare.
** Unless the buyer voluntarily agrees to take on the debt. This sometimes happens with trade creditors, because it helps with and is sometimes vital for the continuation of the business. I have never heard of anybody voluntarily taking on tax debts.

No they won't. They will have to pay any debts that they are required to pay under league rules in order to maintain their place in the league* + a sum the administrator is willing to accept for the business.

The administrator does not have to wait for a bid that clears all the debts. The bid just had to be better for the creditors than a liquidation.

* Legally there is no requirement to do this, but the business is worth far more with a league place than without one so it would probably be mad not to.

I really don't think HMRC will want to give any haircuts to football clubs, sets a dangerous, very public, precedent for them though I know that happens in other industries.

 

[stapler]

No but it's still £5m if you don't want to incur a 15 point penalty and you then have to worry about running the club so not surprised that's the kind of figure you need to prove you are suitable.

I really don't think HMRC will want to give any haircuts to football clubs, sets a dangerous, very public, precedent for them though I know that happens in other industries.

HMRC does not have any choice at all. The rules about who gets what in an insolvent administration are set down in the Insolvency Act 1986 and the Insolvency (England and Wales) Rules 2016.

 

[beezer]

I was sort of wondering that like! I know we were in pretty bad shape but, even after a parachute payment leaving, we had another one to come. Added to the infrastructure etc it does make me wonder why Derby would be £15m more! @Grumpy Old Man any obvious reasons? Still seems like our value would be around the £30m mark, which given we've got no external debt, in the championship, with cracking facilities just seems crazy compared to Derby

I remember Stewart Donald saying when he was still Eastleigh owner that it would have to be a sensational deal for him to get involved with Sunderland. They got us for a steal and they knew it. Tbh I’m surprised there wasn’t more interest in taking us over at the time considering Ellis short was not far away from pretty much giving away a club of our size debt free.

 

[Mackem00]

In administration, and not owning their ground, there's no way that DCFC, as an entity, are worth anything like that. The big unknown is how much it will cost to prise Pride Park out of the hands of Mel Morris. This is something of a distress purchase for a buyer of DCFC if the club wants not to be another Coventry. It could well be that bidders are being held to ransom to Morris, pushing up the total cost.

In addition, given our infrastructure, £30m is quite a low valuation for Sunderland (the SoL alone is valued at £91m). This really reflects the appalling management of the club over the last few years, and the lack of underlying goodwill (the difference between valuation and asset values) in the business. To me, it looks like they're overvalued, and we're overvalued.

Mel Morris has sold the ground mate. Didn't you hear?

 

[mikemanc]

HMRC does not have any choice at all. The rules about who gets what in an insolvent administration are set down in the Insolvency Act 1986 and the Insolvency (England and Wales) Rules 2016.

Fair enough.