Derby figure could be removed by the EFL after Championship clubs complain

A Derby County figure could have to be removed from his role by the EFL board with Stoke’s Tony Scholes a potential replacement.

Stephen Pearce, the club’s chief executive, has been on the English Football League board since 2019, however with the Rams in a lengthy battle with the EFL over their amortization policy, Pearce has been caught in the middle with a potential conflict of interest at play.

The Daily Mail claim Derby’s Championship rivals have complained about the ongoing saga and the report adds how Pearce could be removed from the role, with Stoke chief executive Tony Scholes and Preston North End’s Peter Ridsdale being considered as potential replacements.

Championship representation on the Board will be elected next month after Bristol City chief executive Mark Ashton recently left his role in the organisation.

One of the main talking points with the upcoming election could be related to Financial Fair Play, with Stoke’s Scholes keen for clubs to have more spending leeway.

Derby avoided breaking FFP rules following the sale of Pride Park to owner Mel Morris, something many clubs have done including Sheffield Wednesday, Reading and Birmingham, in a bid to keep in line with the rules.

Stoke City are said to be the latest side having to look at selling theirs so avoid punishment or potential points sanctions.

Stoke, who were relegated from the Premier League in 2018, are owned by the Coates family, and they’ve backed their managers significantly to try and regain promotion back to the top flight.

The impact of Covid and absence of fans through the turnstiles since March last year has further impacted on finances, with Championship clubs allowed to record losses of £39million over a three-year period.

Accounts released on Thursday show pre-tax losses of £88million, with turnover falling to £49.8million and operating expenses increasing to £141.4million.

It is understood that around £70million of the £88million is written off the balance sheet on the historic value of players.

Stoke have been strongly opposed to the EFL’s strict P & S rules in the past, arguing that the limits punish owners with ambition.

The Rams have pushed hard for promotion back to the Premier League, losing in four playoff campaigns between 2013 and 2019. The failure has since had major ramifications.

Derby have been struggling to continue to compete financially against parachute payments, and big changes have been made with the team suffering as a result.

The club’s wage bill has dropped from £40 million in 2018 to £15 million, and that has been reflected by struggles on the pitch as Derby narrowly avoided relegation, a draw against Sheffield Wednesday enough to see Wayne Rooney’s side stay up.

On the 20th of May, Chief Executive Officer Stephen Pearce, on behalf of Derby County’s Board of Directors, issued a response to the Open Letter, dated 17th May 2021, which was signed by various supporters’ groups.

It read: First and foremost, we totally understand and respect our supporters’ concerns and frustrations at this present time.

Financial Position

The last 14 months, since the outbreak of COVID-19 in March 2020, has been an unprecedented and incredibly difficult period for everyone.

Since COVID-19 impacted the United Kingdom early last year, it would be fair to state that Derby County has lost around £20 million in revenues.

The impact of losing the vast majority of our revenues when the club was already loss–making has been significant and, therefore, we have been presented with several challenges to overcome.

Of course, the lack of revenue affects many aspects including our ability to recruit players. Furthermore, with so many Championship clubs benefiting from Premier League parachute payments, and retaining Premier League squads,it has made it difficult to be as competitive as we would have wished to be. Injuries to key players also impacted us during the 2020/21 season.

We are not the only football club in the country to report such losses, given the knock-on effect of being unable to welcome supporters into stadiums for such a lengthy period.

We are also fully aware that at this moment in time Derby County’s name is regularly appearing in the national media and that some articles are creating or heightening supporters’ concerns.

Whilst this is a financially challenging time, we can assure supporters, and everyone connected with the club, that the Board and management are working tirelessly to address the situation and ensure we are in the best possible place in both the short and long-term.

It is widely understood that our current owner has been in discussions with numerous parties about a transfer of ownership of both the club and Pride Park Stadium. After two abortive processes which have been harrowing, we can confirm that we have a number of other credible parties who are in active negotiations to help take the club forward.

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Season/Match Tickets

Ticket refunds for the 2019/20 and 2020/21 seasons have been processed over the course of the last few months and any supporters that still have refund queries are urged to contact our Ticket Office (ticket.office@dcfc.co.uk) with their key details, including their Fan ID number.

The 2021/22 season is fast approaching, and we will communicate ticketing information at a suitable point once more clarity is provided by the UK Government and EFL in relation to the return of fans for next season.

Plans are in place for several eventualities and once a definitive answer is provided on the return of fans, we are ready to move forward and communicate our plans immediately.

The recent test events have only reinforced how important supporters are to clubs and on-pitch performances. We have dearly missed our supporters at Pride Park Stadium since March 2020 and are eager to welcome supporters back as soon as it is considered safe to do so.

Ownership Situation

In respect to the agreement with No Limits Sports Limited, this transaction is no longer under consideration.

An announcement was made in April that a deal was agreed between Mel Morris and No Limits Sports Limited, but subsequent developments mean the deal is no longer an option.

However, Mel Morris is in touch with a number of credible parties in respect to purchasing both the football club and Pride Park Stadium.

Due to confidentiality reasons, we cannot expand on this information at this time in terms of the identities and complexities of the discussions, but should we be in a position to share more details then we will do so.

Supporter Representation On The Board

Supporter representation on the Board is something that has been discussed previously over many years. Whilst a definitive answer cannot be given at this precise moment, especially with a potential change of ownership in the near future, this is an option that justifies discussion.

Supporter Engagement Meeting

We hope that this response addresses the principal questions supporters may have at this time.

But we would also consider that setting up a virtual meeting for supporters’ groups to directly ask questions and allow supporters to lobby their supporters’ groups for answers. We will engage the supporters’ groups to propose a mutually convenient date.

Squad Improvements

In recent years we have embarked on a multi-year programme to supplement our recruitment through in-house developed players.

This is not something that can be achieved overnight and requires patience in order to leverage the playing assets that we are developing. To lose sight of this objective at what is undoubtedly a transitional period would risk wasting the £20 million investment made in developing our Category 1 Academy, its playing assets, and the talented coaches we have recruited and retained.

Wayne Rooney has clearly outlined his plans to make improvements to the first team squad during the summer transfer window, and we will work closely with him to find the right balance of quality, experience, energy, determination, and youth development to again be competitive.

It goes without saying, with various players out of contract and loan agreements coming to an end, that there is significant work to be done to prepare the squad for the start of the 2021/22 season.

In addition, we are finalising our pre-season arrangements and expect to be able to announce our games programme in early June.

EFL Charge

Although not referenced in the Open Letter, the Board also wishes to reiterate the club’s stance in respect of the ongoing situation relating to the EFL charges brought against Derby County (https://www.dcfc.co.uk/news/2021/05/club-statement…).

As was stated last week, the club and the EFL have agreed that the matter shall now be remitted back to the original Disciplinary Commission to determine any appropriate sanctions following the League Arbitration Panel’s decision. The outcome of that process will be communicated once it has been established and the parties are able to announce it publicly.

Final Message

Finally, we would like to re-iterate our desire to keep our supporters and stakeholders as informed as possible. This may not always be possible due to confidentiality obligations which we take very seriously. We shall be sure to communicate any major events that affect the club as soon as we are able to do so.

Thank you all again for your support which is critical to the club’s progress through what is hopefully the tail end of this dreadful pandemic that has taken the lives of so many, including some of our own supporters. We are hopeful of seeing you back at Pride Park Stadium very soon.