Sports Minister Nigel Huddleston has ordered the EFL to work harder and faster to resolve the financial crisis which threatens to engulf Derby County and force the club out of business within weeks.
The Government revealed that Mr Huddleston intervened after MPs raised concerns in Parliament and chastised the EFL for its lack of urgency as time was running out.
Former Foreign Secretary and Derby South MP Margaret Beckett insisted no one would ever forgive the Football League if they allowed the Rams to go under.
Derby admin process stalled with no preferred bidder named
The EFL have given Derby a February 1 deadline to prove they have the funds to complete the season, and they are thought to need around £5million.
But at the same time two unresolved legal claims, from Middlesbrough and Wycombe Wanderers, are acting as an obstacle for the club to find a buyer and leave administration.
It is these apparently contradictory positions that have exasperated supporters and political leaders.
Supporters and MPs fear Derby County is running out of time and money and the club, founded in 1884, will slide into liquidation, if the EFL deadline is enforced without clearing the way for a buyer .
Rams manager Wayne Rooney became frustrated with the slow offer
The risk of Derby going bankrupt and the impact this would have on the town has alarmed Derbyshire’s political leaders, who are now aware of the threat.
Tory MP for Mid Derbyshire Pauline Latham, who got the urgent question in the House of Commons which sparked yesterday’s debate, said: ‘Derby County Football Club cannot be allowed to be scrapped by the English League football (EFL) on 1 February.
“Is the minister confident the EFL is moving fast enough to resolve the football debt problem before the deadline or will he prolong it?”
THE GREAT ESCAPE
Derby have suffered a 21-point deduction this season, but thanks to a string of outstanding results and a never-say-die attitude, they have dragged themselves to the bottom of the Championship standings.
The EFL deducted 12 points when the Rams went into administration and nine more for breaking financial rules.
After the 2-0 victory over Sheffield United on Saturday, Derby are now second, thanks to two goals from Tom Lawrence.
The Rams’ eighth win of the season puts them 14 points behind, eight points from safety.
The situation is desperate for Derby, which faces a sellout of players to raise extra funds to keep the lights on, if it cannot name a preferred bidder. Even then, there is no guarantee of survival.
Culture Minister Chris Philp, who replaced Mr Huddleston, said ‘urgent pragmatism’ was needed from the governing body, trustees (Quantuma) and the Rams.
He said: “We want to see the EFL work urgently, pragmatically and quickly to resolve these outstanding issues which stand in the way of a takeover by a new owner, who we hope can invest the money needed to straighten the club.
‘He [sports minister Nigel Huddleston] strongly urge the EFL on these points.
“We need to be clear that the governance surrounding the administration of Derby County Football Club is a matter for the EFL, the trustee and the club.”
“But the government is very interested in it.”
Derby has been in administration since September after former owner Mel Morris ran up huge debts in a reckless gamble to secure promotion to the Premier League.
But rather than top-flight riches, Derby found themselves in the haunch, in administration and in a relegation battle after the league imposed a 21-point deduction on club EST Midlands.
No one disputes that the point deduction – for getting into administration and breaking financial rules – was justified.
However, Middlesbrough are seeking compensation, believed to be around £40m, claiming Derby ‘cheated’ the financial rules and caused Boro to miss out on a 2020 play-off spot.
Middlesbrough owner Steve Gibson believes Derby cost his club by breaking FFP rules
Wycombe Wanderers owner Rob Couhig has filed a complaint against Derby County
And Wycombe also wants a reward, believed to be around £5m, claiming Derby’s breach of financial rules sent them back to League One.
Any Derby County buyer will face huge debts, but interested parties, including former chairman Andy Appleby, former Newcastle United owner Mike Ashley and a mystery bidder, are unwilling to accept responsibility for the claims unresolved.
The EFL are accused of not doing enough to resolve the impasse as time is running out fast. The first step is to determine whether Middlesbrough and Wycombe will be treated as football creditors in the administrative process. Football creditors must be paid in full.
Margaret Beckett, who served in Tony Blair’s government and as leader of the opposition, said she met the EFL when the club took office and was assured of their “desire sincere to see this matter resolved”.
Derby County players celebrate their 2-0 win over Sheffield United on Saturday
But she said “some of us are starting to wonder” if that is indeed the case.
“If inadvertently this should happen because the football league has been unable to remove the obstacles which at the moment seem so firmly placed in the way of Derbyshire, none of those there participate will not be forgiven,” Ms Beckett said.
Julian Knight, the chairman of the select committee for digital, culture, media and sport, pointed out that the EFL had itself benefited from financial assistance, during the Covid crisis.
“In light of this, it is incumbent upon the EFL to show decency and understanding to Derby County, a former league champion club, in this hour of need,” he said.
Meanwhile, Middlesbrough have issued a strong statement defending their right to seek compensation.
The former Foreign Secretary and MP for Derby South has said the EFL will never be forgiven if Derby goes bust
Boro points out that they initially raised their claim in May 2019 following Derby’s “systematic cheating” while breaching English Football League financial rules in previous seasons.
“There is some inconsistency in the arguments presented by the administrators,” Boro said.
“On the one hand, it is said that there is no prospect of a successful application, in which case there is no risk for a new owner. But, on the other hand, the administrator apparently cannot find a new owner because he will not proceed without the claim being settled due, presumably, to the fact that it is founded and could succeed.
“If the protest has no chance of success, MFC does not understand why a new owner would resolve the issue by agreeing to the arbitrator’s award being honored.”
Derby have accumulated 21 points so far this season and are second in the Championship
Boro’s statement made it clear that it “does not wish to see Derby County go into liquidation and that MFC is happy to be realistic in its expectations for Derby County to come out of administration”.
However, for that to happen, the administrators would have to accept the merits of Boro’s claim.
The EFL said it was committed to resolving “a complex legal situation” surrounding the club’s future.
In a statement, it said: “The current situation remains difficult as Middlesbrough and Wycombe Wanderers consider their claims to be in need of protection under insolvency policy.” Administrators disagree.
The EFL added that Derby County considered the claims to be “false”, but current bidders “appear unwilling to take the risk of defending them”.