Accounts out soon

[AdiSalisbury]

If Mel sells up (the Club that is), then he too owes no favours to the new owners of DCFC either, save that no doubt he would (a) remain a fan and (b) still be looking to get a shed load of his loans to Sevco back.

Plus the added advantage is that he managed to transfer extra value into the club this year by revaluing the stadium etc on sale, to market value, and thus "paying" above book value for it.

So, can I translate this as, "We're up the creek, but we've still got a paddle"?

[Andy_Faber]

So, can I translate this as, "We're up the creek, but we've still got a paddle"?

A paddle that should cost the club nearly £10m a year depending on Mel's benevolence

[ramAnag]

Call me simple but why would Mel do that, he'd be cutting his nose off, Coventry was slightly different in that the council bought the Ricoh and rented it back, they owed no favours to CCFC

I’m with Stenson here. Mel may have made mistakes but he’s a lifetime fan with the best interests of DCFC very much at heart. We mustn’t forget that. To those, like me, with limited understanding of financial matters it may sound a tad ‘dodgy’ but I for one trust in Mel operating in the best interests of Derby County.

[Geoff Parkstone]

The fact remains that DCFC no longer owns its own ground, it has been transferred within the ownership group no doubt in exchange for further money put into the club by that ownership group. Prior to this the ground cost us an amount of depreciation plus all the usual operating costs, security, policing, power etc. Now the Club will pay a flat "rent" (one assumes) which is inclusive of all those operational costs plus potentially a "profit" for the new group company that owns it. This company is free from the constraints of being a regulated football club.

Additionally any future revaluation gains on the ground will arise in a company distinct from the club itself. In practice this may make no difference but it does mean that the only "good asset" in the clubs books is no longer there. The expression "asset stripping" is an emotive one, and the stripping has happened within the consolidated group that owns it all anyway. But the fact remains that the biggest asset is no longer in DCFC despite DCFC being the biggest cash flow drain.

It probably all makes perfect sense in financial planning and tax terms, and no real difference on a day to day operational basis other than to keep bean counters happy, but it sets up a position whereby ownership could extract themselves from the club whilst maintaining the biggest asset within the group to offset their "bad loans". Its what one would expect where there is a dilution of ownership interest imminent - and just makes one feel a little jittery.

Worst of all, we are now just tenants of our ground, like a certain team up the road........

[DCFCArmy]

Morris is a difficult one isn't he

Is he or isn't he is the question, is he going to put us in grave danger or isn't he?

It is a form of asset stripping no doubt about that, he's taken the ground away from the club

Whether its to get round FFP or not really the point, he needs to get round FFP by not falling foul of it, not stripping the club to do so

We shall see where this leads us

[mistaram]

If Mel sells up (the Club that is), then he too owes no favours to the new owners of DCFC either, save that no doubt he would (a) remain a fan and (b) still be looking to get a shed load of his loans to Sevco back.

Plus the added advantage is that he managed to transfer extra value into the club this year by revaluing the stadium etc on sale, to market value, and thus "paying" above book value for it.

Geoff you are a cynic surely not in the interest for Moriss to screw any new owners over excessive rental charges One they will have done their due diligence and have insured and agreed rental charges for A amount of Two if the rental charges cannot be agreed they won't invest anyway Surely it's a good safeguard if Morris owns the ground then whoever do come in has less chance to asset strip By way he didn't pay above book price it was independently done

[Ram59]

I hardly think this deal puts the club in a position of weakness. Whoever owns the ground have got only 1 potential tenant, Derby County.

Whoever owns Derby County could always build a ground elsewhere, if relations were to break down.

[Geoff Parkstone]

By way he didn't pay above book price it was independently done

That depends how you look at it - the book value of the ground was last revised upward in 2013, which valuation was used in the 2017 accounts. No doubt the ground was revalued at the point of sale by experts, and he "paid" a commercial value but the club could not show a profit on selling the ground if it was not sold for above book value! If it had been valued upwards in the accounts before the sale, no profit would have arisen on the sale - simply a revaluation gain.

Its all semantics, but it would appear that DCFC "received" more than the 60 odd million shown in its last accounts: assuming Moor Farm might be valued at about 3-5 million. But lets wait to see the accounts, not the club spin doctors version

[Geoff Parkstone]

if the rental charges cannot be agreed they won't invest anyway Surely it's a good safeguard if Morris owns the ground then whoever do come in has less chance to asset strip

Agreed that new owners would need to agree a viable rent, which may or may not include a "profit element" as a way of paying MM a bit of an extra bit as part of the sale agreement.

BUT should he sell the club and keep the ground, the capital appreciation and development potential on the ground suddenly becomes his, and not the club's. Given that the ground cost about 20 million to build and was maybe worth 80 million when transferred to the other company, that is no small income earning asset that the club has cashed in.

just sayin'.........

[mistaram]

Agreed that new owners would need to agree a viable rent, which may or may not include a "profit element" as a way of paying MM a bit of an extra bit as part of the sale agreement.

BUT should he sell the club and keep the ground, the capital appreciation and development potential on the ground suddenly becomes his, and not the club's. Given that the ground cost about 20 million to build and was maybe worth 80 million when transferred to the other company, that is no small income earning asset that the club has cashed in.

just sayin'.........

Geoff same as you say we will have to wait for the accounts You are assuming Mel has only bought ground to make money but I know different