Derby County cleared of breaking EFL financial laws

Derby County have been cleared by the EFL over two charges that they had broken financial laws.

The Rams were accused of posting losses in excess of what the Football League’s governing body will allow.

The move came after a review of the sale of Derby County’s stadium to the Club’s owner, Mel Morris.

The ground was sold to a new company called Gellaw Newco 2020 for £81.m on 28 June, two days before the 30 June year-end for the club’s 2017-18 accounts.

This meant that the Rams had their best-ever Championship turnover.

For the year running from 1 July 2017 to 30 June 2018 show turnover of £29.6m, and increase of £600,000 compared to the previous year.

The accounts showed a profit of £14.6m, in comparison to a loss of £7.9m in the previous year – and a loss of £14.7m the year before – largely due to the profit on the sale and lease back of Pride Park Stadium and profit on player registrations.

Without the sale of the stadium, total losses for the three years could have been £48m, which contravenes the EFL’s rules that cannot make more than a £39m loss over a three-year period if they are covered by an owner.

The club strongly contested the challenge to the valuation of Pride Park Stadium, as well as the newly notified charge in respect of intangible fixed asset amortisation.

The charges held up against the club were put to an independent disciplinary commission. Charge one was dismissed. Charge two was also dismissed, save for, the commission found the wording of the amortisation policy in its financial statements could have been clearer.

A statement from the Rams said: “Derby County is delighted at the outcome and will, at this stage, not make any further comment relating to the matter and the full focus of everyone at the club is now on preparations for the upcoming 2020/21 season.”