League One football club Derby County has been rescued from administration, as a takeover deal has finally been completed. Administrators from Quantuma had been looking for a buyer since September 2021.
Derby County is a historic football club one of the 12 founder members of the Football League in 1888, Derby County is one of only 10 clubs to have competed in every season of the English football league system, with all but four of those being in the top two divisions. Months of financial uncertainty have seen that change, however, with two sets of points deductions consigning the Rams to relegation from the Championship at the end of the 2021/22 campaign.
The club won two First Division titles in the 1970s, but has fallen on leaner times in the intervening decades – spending most of its time in England’s second tier. At the start of the 2014/15 season, local businessman Mel Morris assumed ownership of the club, announcing his intent to return the club to the Premier League.
Morris initially oversaw a level of spending unprecedented in Derby’s history, breaking the club’s transfer record four times in his first three years – as well as an equally unprecedented managerial turnover, hiring and firing nine managers in six years from June 2015. During that time, the club came close to the promised land, but ultimately fell short – with three unsuccessful play-off campaigns. The latest of these saw the Rams defeated by Aston Villa in the 2019 final.
Spending big to gain access to English football’s top table has proven a risky business for multiple teams in recent years, however. Derby’s owner attempted to open up some funds for the club by purchasing its stadium, Pride Park, for £80 million, despite it previously being listed as worth £41 million. The stadium sale allowed the club to post a pre-tax profit of £14.6 million in 2017-18, and therefore meet the EFL’s spending rules – but it caused problems for the club ever since.
The sale became subject of a financial fair play investigation – and the threat of a points deduction that would have seen the club relegated, had it been applied in 2020. Then, a year later, the club fell into administration, with Morris unable to offload the club after claiming the coronavirus pandemic cost the Rams about £20 million in lost revenue. The investigation was said to be among the sticking points that saw negotiations fell through, before the subject came back to bite County once more.
As is standard for a club entering insolvency proceedings, the English Football League (EFL) imposed a hefty 12-point-deduction on the struggling club. Then, midway through the season, with the team somehow having dragged itself back into contention in a relegation scrap, an additional nine-point reduction took Derby’s point tally back to -3, as the English Football League finally moved to punish the club for Morris’ dealings.
The club’s almost certain relegation – and the fact Pride Park was still not among the club’s assets – made finding a buyer very difficult for administrators from Quantuma. The professionals were forced to reschedule multiple deadlines for the club’s sale – but with less than one month before the Rams commence their League One campaign, a deal has finally been completed.
Joint administrator, Andrew Hosking said, “The level of complexity involved in bringing this matter to a conclusion has been unparalleled and we are grateful to all stakeholders and their advisers, for their hard work which has enabled us to overcome a magnitude of challenges, and allow the rescue of this historic club.”
Hosking had been working alongside Carl Jackson and Andrew Andronikou to find a buyer for Derby, and he added that he hoped the move would mark “the end of the uncertainty experienced by supporters and the wider community.” Now, with a deal that complies with the EFL Insolvency Policy and provides “the best return for creditors”, he asserted the team could move into the new season with “a clean slate,” under local ownership of Clowes Developments.
Jackson added, “We are very pleased to have achieved today’s sale, in a deal which secures the long-term future of the club, and one which represents the very best outcome for creditors. I would like to express my sincere thanks to the club’s staff players and the fans for their loyalty, and patience, as they supported the club through the administration.”
The purchase is completed for an undisclosed fee, and also sees Derby brought under the same ownership structure as Pride Park. The business had already bought the Pride Park stadium – which had not been part of the administration – from former owner Mel Morris in June, while also providing a loan to tide the club over.
The joint administrators were advised by the Law Firm Pinsent Masons with a team, led by partner, Steve Cottee. Meanwhile, Clowes was advised by a team led by Simon Taylor at Gateley Legal.
Clowes was understood to have been part of a three-horse race to buy Derby last month – but with the other parties taking different stances on the stadium, it seems that the move helped clinch the move. One of the other bidders, Mike Ashley, meanwhile is understood to have brought legal proceedings against the administrators, claiming they made false representations during takeover discussions.