?Derby County are facing a potential 21-point deduction in the Championship after the EFL slapped the club with a charge for recording excess losses, following a review of their Profitability and Sustainability submissions.
The Rams were found to have broken rules for the three-year period ending June 2018, with the EFL rules stating that clubs can lose no more than £39m over a three-year cycle.
Reasons for the charge relate to the club’s valuation of their stadium, Pride Park. It was sold to a company controlled by the club’s owner, Mel Morris, for £80m two years ago before being leased back to the club afterwards. After selling the stadium, ?Derby recorded a pre-tax profit of £14.6m last April, which in turn meant they met the Profitability and Sustainability regulations.
However, the EFL believe the valuation of Pride Park was unfair, and launched an investigation into the matter at the start of the season. Their rules state that any property sales and commercial deals included in club accounts must be at fair market rates, something they feel Pride Park was not.
According to the ?Mail, the EFL believe Pride Park was worth £50m, a full £30m less than what Derby sold their stadium for, thus has accused the club of overvaluing their asset by the aforementioned sum.
Derby refute these claims and insist they complied with the rules throughout.
Now a lengthy legal battle is set to ensue, with Derby’s case will be heard by a three-person independent panel. Due to rules imposed three years ago, any club found to not be in line with the EFL’s P&S tariffs will be handed a large fine and could be docked a colossal 21 points in the league.
If the panel uphold the EFL’s charge, then Derby will have breached spending limits by near-£15m, which would constitute a 12 point deduction, while if they are found to be guilty of aggravated breach it would incur an additional nine-point sanction.
At present, Derby sit 17th in the ?Championship and ten points above the relegation zone under Phillip Cocu, with a potential 21-point deduction likely to see the club fall into League One next season.