Derby County face a potential 21-point deduction after filing for administration. The club will be automatically issued with a 12-point deduction upon officially appointing administrators, which they are expected to do in the coming days, and also stand to be deducted nine points, plus a suspended three-point deduction, for a separate breach of the English Football League’s financial regulations.
The Championship club have been embroiled in talks with the EFL over a settlement for their breach of the league’s profit and sustainability rules. Derby were ordered to resubmit their accounts for 2016, 2017 and 2018 after being found to have broken regulations. The EFL’s rules permit clubs to make a maximum loss of £39m across three seasons. In the event of a 21-point deduction, Wayne Rooney’s side would drop to the bottom of the table and face a mountain to climb to avoid relegation.
On Friday afternoon, before the club issued a statement in which they said they “had no choice but to make the tough decision”, Rooney said he could steer the club to safety but conceded a heavier points deduction would make his task substantially harder. “If we get nine points [deducted], I am confident we would stay in this division. I have a lot of faith in the players and myself,” Rooney said. “If it was more points, it would be more difficult, but my commitment is there for all to see. I am a fighter. I am committed to this club.”
Derby blamed their financial problems on a number of factors, including Mel Morris’s struggles to sell the club and the continuing impact of the Covid-19 pandemic on revenue streams. Derby were the subject of two failed takeovers last season, from the Abu Dhabi-based Bin Zayed Group and the Spanish businessman Erik Alonso, who worked as an adviser at Sheffield Wednesday, while Mel Morris, who has been trying to sell the club for two years, is thought to have been in talks with an American consortium over a potential deal.
“Last week, it became clear that the process which has been under way to identify a purchaser for the club likely would not be productive over the near term, despite negotiations with credible parties,” a club statement read. “The directors had no choice but to make the tough decision to take this action and protect the club.”
Derby remain under a registration embargo, which limited Rooney to signing free transfers on short-term contracts that had to meet strict wage caps, including Ravel Morrison and Phil Jagielka. After their draw at home to rivals Nottingham Forest last month, Rooney suggested his job was about to get tougher. “It’s important we keep picking up as many points as we can,” he said. “We cannot afford to slip away, with what else could come to us.”
It remains to be seen whether Derby, who cited a “circa £20m hit” during the pandemic as a key factor for their financial difficulties, appeal the impending 12-point deduction for entering administration. Wigan Athletic failed in their appeal against the punishment on the grounds of “force majeure” after an independent arbitration panel ruled against them last year, which confirmed their relegation to League One. Under EFL guidelines, a “force majeure” event stems from circumstances over which the club “could not reasonably be expected to have control and its officials had used all due diligence to avoid the happening of that event”.
Derby also claimed their current financial plight was in part due to the EFL’s refusal to sanction the club’s drawing £8.3m of financial assistance in respect of settling PAYE liabilities, in line with other clubs. However, the EFL rejected the club’s claim, saying: “The league is disappointed with the comments made by the club in respect of Covid lending facilities. The EFL entered into a debt raise to provide its clubs with access to funds that would support them in dealing with the impact of Covid and, as with any loan, this was subject to a time-frame and eligibility criteria which Derby County was unable to meet.”
On Saturday afternoon Rooney revealed he learned that the club had filed notice to appoint administrators through the TV. Rooney also confirmed he had yet to speak with the club chairman Mel Morris.
“I’ve seen it on Sky,” Rooney said. “I spoke to [chief financial officer] Stephen Pearce after, but initially I saw it on the TV. I have spoken to Stephen, I haven’t spoken with Mel. I am sure he has got other things on his mind.”