The issue of stadium ownership and Financial Fair Play (FFP) in the English Football League has returned to the agenda after it emerged that Middlesbrough is set to sue the EFL over Championship rival Derby County’s purchase of its own home.
UK newspaper The Times has today (Friday) reported that Middlesbrough has made the unprecedented move of sending a legal letter to the EFL, alleging that the governing body of the three leagues below the Premier League failed to enforce its financial rules over the Derby deal.
The latest development comes a week after the EFL reportedly ordered an independent valuation of Derby’s Pride Park amid a possible breach of FFP regulations relating to the club’s recent purchase of the stadium. Derby purchased Pride Park (pictured) in an effort to comply with FFP regulations but some rival clubs feel the move takes advantage of the rules.
The EFL is said to have commissioned property experts to determine a valuation of Pride Park, with similar independent valuations for the home stadia of fellow Championship clubs Sheffield Wednesday and Reading, whose similar stadium agreements have also come under scrutiny recently.
Derby owner Mel Morris used a different company to buy Pride Park in a deal worth £80m (€89.1m/$98.6m) before signing an agreement to lease the ground back to the club. The stadium was listed as an asset with a valuation of only £41m in the club’s books.
Information of the deal was disclosed in the club’s accounts for the 2017-18 financial year, when Derby posted a profit of £14.6m to comply with FFP regulations. Losses in excess of £13m per year over a three-year term would breach the EFL’s profit and sustainability rules.
While Derby has insisted it is fully compliant with FFP rules and has denied breaching any regulations, its rivals are not so sure. Derby last season lost to Aston Villa in the Championship play-off final, narrowly missing out on promotion to the Premier League and the resulting riches on offer. Derby secured its place in the play-offs by finishing one point ahead of Middlesbrough in the Championship table.
The Times said Middlesbrough has quantified its loss in the legal letter to the EFL based on the fact it finished behind Derby last season. Derby believes the fact the EFL cleared its stadium deal before it was signed means the club has no case to answer, however the League does have the power to adjust a club’s financial results if details such as the valuation of a stadium later prove to be incorrect.
An EFL spokesman said: “We do not comment on individual club P and S (profit and sustainability) matters.”
The Times said Middlesbrough owner Steve Gibson put forward accusations of wrongdoing against Aston Villa and Derby at the Championship’s March meeting. Middlesbrough sent a legal letter to Derby this year.
Villa has come under scrutiny after it emerged that its stadium, Villa Park, has been sold to a subsidiary company controlled by owners Nassef Sawiris and Wes Edens.
Image: Derby County