https://www.thetimes.co.uk/edition/sport...-w2m38pj6h
Middlesbrough are set to sue the English Football League, alleging that it failed to enforce its financial rules over Derby County’s purchase of their own stadium.
In an unprecendented move, the Sky Bet Championship club have sent a legal letter to the EFL after Derby beat them to a play-off place last season by one point, denying Middlesbrough the chance of securing promotion to the Premier League and a potential £180 million windfall.
Derby are among a number of clubs who have been accused by rivals of exploiting a loophole in the EFL’s rules that allowed them to buy their own stadium to make themselves financially compliant.
Mel Morris, the club’s owner and chairman, used a separate company to buy Derby’s Pride Park ground for £80 million, with a deal to lease it back, when it was listed as an asset on the club’s books with a value of £41 million.
It meant that Derby reported a pre-tax profit of £14.6 million this year, when losses in excess of £13 million per year over a three-year period amount to a breach of the EFL’s profit and sustainability rules.
Middlesbrough declined to comment last night but The Times understands that, while they have not quantified their loss, their claim is based on the fact that they finished behind Derby.
The EFL board — rudderless in the absence of a new chief executive, with interim chair Debbie Jevans at the helm — met yesterday and are understood to be shaken by the development.
It caps a wretched few weeks for the organisation after the fiascos at Bury, who were expelled from the League, and Bolton Wanderers. The Derby chief executive Stephen Pearce sits on the EFL board. The Times revealed last week that the EFL, under pressure from clubs such as Middlesbrough and Leeds United, ordered an independent valuation of Pride Park. According to sources, independent valuations have also been commissioned for Sheffield Wednesday and Reading.
Last season, Birmingham City were docked nine points after recording total losses of £48.8 million from 2015-16 to 2017-18 — almost £10 million over the £39 million limit. It is within the EFL’s power to adjust a club’s financial figures if it turns out the valuation for a stadium is incorrect.
Derby stand by their own valuation of Pride Park and have consistently maintained that they are not in breach of any financial fair play rules, and believe the fact that the EFL cleared the stadium sale before it took place means they have no case to answer.
If they do face sanctions, insiders suggest there could yet be a case where the EFL has a claim against Derby in response to Middlesbrough’s against the EFL. The Middlesbrough owner Steve Gibson levelled accusations of foul play at Aston Villa, who were promoted in May and sold Villa Park to their owners a month later, and Derby at the Championship’s March meeting. Middlesbrough sent a legal letter to Derby this year.
Last night, an EFL spokesman said: “We do not comment on individual club P and S [profit and sustainability] matters.”
If only they'd target Villa as well or are they untouchable now they're in the Prem?
Middlesbrough are set to sue the English Football League, alleging that it failed to enforce its financial rules over Derby County’s purchase of their own stadium.
In an unprecendented move, the Sky Bet Championship club have sent a legal letter to the EFL after Derby beat them to a play-off place last season by one point, denying Middlesbrough the chance of securing promotion to the Premier League and a potential £180 million windfall.
Derby are among a number of clubs who have been accused by rivals of exploiting a loophole in the EFL’s rules that allowed them to buy their own stadium to make themselves financially compliant.
Mel Morris, the club’s owner and chairman, used a separate company to buy Derby’s Pride Park ground for £80 million, with a deal to lease it back, when it was listed as an asset on the club’s books with a value of £41 million.
It meant that Derby reported a pre-tax profit of £14.6 million this year, when losses in excess of £13 million per year over a three-year period amount to a breach of the EFL’s profit and sustainability rules.
Middlesbrough declined to comment last night but The Times understands that, while they have not quantified their loss, their claim is based on the fact that they finished behind Derby.
The EFL board — rudderless in the absence of a new chief executive, with interim chair Debbie Jevans at the helm — met yesterday and are understood to be shaken by the development.
It caps a wretched few weeks for the organisation after the fiascos at Bury, who were expelled from the League, and Bolton Wanderers. The Derby chief executive Stephen Pearce sits on the EFL board. The Times revealed last week that the EFL, under pressure from clubs such as Middlesbrough and Leeds United, ordered an independent valuation of Pride Park. According to sources, independent valuations have also been commissioned for Sheffield Wednesday and Reading.
Last season, Birmingham City were docked nine points after recording total losses of £48.8 million from 2015-16 to 2017-18 — almost £10 million over the £39 million limit. It is within the EFL’s power to adjust a club’s financial figures if it turns out the valuation for a stadium is incorrect.
Derby stand by their own valuation of Pride Park and have consistently maintained that they are not in breach of any financial fair play rules, and believe the fact that the EFL cleared the stadium sale before it took place means they have no case to answer.
If they do face sanctions, insiders suggest there could yet be a case where the EFL has a claim against Derby in response to Middlesbrough’s against the EFL. The Middlesbrough owner Steve Gibson levelled accusations of foul play at Aston Villa, who were promoted in May and sold Villa Park to their owners a month later, and Derby at the Championship’s March meeting. Middlesbrough sent a legal letter to Derby this year.
Last night, an EFL spokesman said: “We do not comment on individual club P and S [profit and sustainability] matters.”
If only they'd target Villa as well or are they untouchable now they're in the Prem?
