Yesterday, 1st February, was the scheduled deadline for the sounding of the death knell for Derby County Football Club (DCFC), one of the 12 original members of the English Football League (EFL) and one of only 10 clubs to have participated in every season since its founding in 1888. DCFC has been in administration since November 2021, and only had funds to cover its monthly operational cost of £1.5 million up to the end of January. The deadline has been extended by the EFL to the end of this month. How does an organisation of such long-standing pedigree find itself clutching at straws and clinging to life support?
Derby County’s status today is a sad reflection of the current bizarre state of the game in England. Despite the fact that football has never been more popular, with millions of pounds flowing through the system, mainly due to extremely lucrative contracts for television broadcast rights and sponsorship deals, very few clubs are operating in the black.
Several factors have contributed to these dire straits. Firstly, there was the formation of the Premier League (commonly referred to as the English Premier League [EPL]) in 1992, which was in effect, clubs of the former First Division (of the then EFL four-tier division) breaking away from the League, with the blessings of the Football Association (FA) to take advantage of the then unheard of sum of £200 million for television broadcast rights. The initial season of 1992-93 comprised 22 clubs, since reduced to 20 as of the 1995-96 season. The EPL has evolved into the most watched sports league in the world today, shown in over 200 countries to a potential audience of 4.7 billion viewers. The broadcasting rights garnered £5 billion for EPL in the 2019-2020 Season. With several of the world’s largest media companies seeking programming for their emerging streaming services fierce bidding in the immediate future is expected to push this figure even higher.
Whichever are the current 20 clubs in the EPL (the bottom three are relegated at the end of every season and are replaced by three from the Championship Division), they split 50 percent of this phenomenal cash windfall every season, while the other half is distributed among the 72 clubs of the Football League Championship, League One and League Two divisions. The average weekly wage in the Premier League is £60,000 compared to £4,000 earned by a player in the Championship Division and £750 (just above the national average) in League Two. The disparity created by this inequitable wealth distribution has laid the foundation for a structure of the haves and the have-nots, with the latter desperately seeking ways to climb the ladder to be among the elites.
In the 2018-2019 Season, Mel Morris, the owner of DCFC, anxious to return to the top flight for the first time since 2008, bet the ranch and lost. Aston Villa beat Derby in the third-place playoff and the opportunity to share in the EPL revenue pie, then estimated at £170 million per slice, was gone. It has all been downhill for Derby since then, accelerated by a series of poor management and financial decisions by the owner. It missed being relegated to League One in 2020-2021 by one point. In November, Morris placed the club in Administration and called in Quantuma to run the club and seek a potential buyer.
DCFC owes the UK Tax Authority (Her Majesty’s Revenue and Customs) £29.3 million, and is being sued by two rival football clubs, Middlesbrough and Wycombe, both of which believe Derby skirted the EFL rules to gain an advantage that had significant consequences on their respective destinies. Middles-brough is seeking compensation of £45 million, having been nudged out of a playoff spot for promotion to the EPL by Derby in 2019, while Wycombe is asking for £6 million, after relegation to the League One last season, as Derby avoided relegation by a single point. These lawsuits are proving to be a major hurdle for potential suitors.
The catastrophe at Derby is a direct result of the temptation of the lure of that massive EPL revenue pie and the wild dreams that accompany its attainment. Surely, the time is now past due for the UK government to appoint an independent football regulator, an idea which has been mooted several times in the past. However, the EPL has utilised its influence on the Football Association to stymie any development of this nature, along with any attempts to regulate the finances and ownerships of the Premier League Clubs.
The failed attempt at the formation of a European Super League last April finally spurred the UK government into action and Tracey Crouch, the Tory MP and former sports minister was appointed to conduct a review of football in England focusing on three main areas: the financial sustainability of the English game; the experience of fans, including at matches; and the wider governance and ownership of clubs.
The Crouch Review, as it has become known, was released in November, inclusive of 47 recommendations, the key proposal being the appointment of an Independent Regulator for English Football (IREF), who would be licenced by the government but not run by it, neither would it be answerable to the current powers that be, the Football Association. The IREF would have two primary responsibilities, one financial, one corporate. The Regulator would have the authority to demand financial plans from a club’s owner and be able to inspect the club’s books at any point in time. It would have the power to make greater demands of the owners themselves, including asking that they pass an integrity test and resubmit to assessment every three years (as opposed to the current standard of a one-off criminal record check). If the IREF is satisfied that the agreed criteria have not been met, it could revise the terms under which the failing club is allowed to compete or remove that right.
Last Sunday, thousands of Derby County fans held a march of protest before their team clashed with Birmingham City in a Championship league fixture. It ended outside their stadium with fans pleading for their “rams (Derby County’s nickname) to be saved” and calling on the EFL and the administrators to come to an agreement with one of the interested parties. A sellout crowd of Derby fans witnessed their team battle back from a 0 – 2 deficit to salvage a 2 –2 draw in added time, grabbing a vital point in the standings. Whether Derby County survives as a football club and manages to cling on to its tenuous hold on a position in the Champion-ship Division is a matter only the passage of time will resolve.
Football is too deeply ingrained in the social fabric and culture of British society to be left to its own demise. The game needs to be saved from further Derby County fiascos and the talons of deep-pocketed investors who only see the bottom line and the chance to flip a club for a massive profit. The appointment of an IREF is long overdue.
