After numerous false dawns, Clowes stepped up to save Derby from the threat of liquidation, just as it looked as if all hope had been lost, even though this reluctant hero would have much preferred to have remained in the background (and in his seat in Pride Park).
Derby had entered administration in September 2021 after
former owner, Mel Morris, was unsuccessful in his attempts to sell the club.
Morris had bought a 20% stake in May 2014, before purchasing the remaining
shareholding from North American Derby Partners in September 2015 to take full
control.
Given the club’s history, it’s incredible that things got so
bad at Derby. Older supporters will remember a glorious period in the early
70s, when the legendary Brian Clough and Peter Taylor led the Rams to their
first ever (old) First Division title in 1972, then guided the team to the
semi-finals of the European Cup, where they were controversially eliminated by
Juventus.
There was a steady decline after the loss in the 2019
play-off final to Aston Villa, as Derby narrowly avoided the drop to League One
in 2020/21, before relegation the following year. In contrast, Villa will be
playing in the Champions League this season, so this was a real “Sliding Doors”
moment.
Derby went through no fewer than nine different managers
between June 2015 and May 2021, as the club’s attempts to reach the Promised
Land of the Premier League became increasingly desperate. Morris certainly paid
a heavy price for this failure, admitting that the club had lost him “in excess
of £200m”.
In addition, according to the administrators’ report, Derby
owed £36m to HMRC, £24m to US investment group MSD Holdings and £15m to other
creditors, including an outstanding £5m transfer instalment to Arsenal for
Krystian Bielik.
Clowes had got involved after various other investors fell
by the wayside, but Derby certainly had a narrow escape when the deal with
Chris Kirchner, somehow the administrators’ preferred bidder, collapsed in June
2022, given that the American businessman has since been sentenced to 20 years
in prison for fraud.
Clowes paid £33m to purchase the club, including the assets
and certain liabilities, as prescribed by EFL regulations, of five companies in
administration: SEVCO 5112 Limited, The Derby County Football Club Limited,
Derby County FC Academy Limited, Club DCFC Limited and Stadia DCFC Limited.
In addition, the new owner spent £22m to secure the club’s
stadium via his acquisition of Gellaw 202 Limited. As part of the purchase, Clowes settled
around £20m of liabilities. In addition, certain liabilities were transferred
to the new company, Derby County (The Rams) Limited.
In 2022/23 Derby generated £20.4m revenue, boosted by £1.6m
profit from player sales, but they had £32.6m operating expenses and £19.7m
exceptional charges, leading to a £30.4m loss.
Derby’s reported £30.4m loss was actually the highest in League One in
2022/23, followed by that season’s champions, Ipswich Town £18.2m.
Derby’s £20.4m revenue was the second highest in League One,
only below Ipswich Town’s £21.8m, but ahead of Bolton Wanderers £19.4m and
Sheffield Wednesday £19.3m, then a big gap to fifth placed Plymouth Argyle
£14.7m. Derby’s revenue will obviously
increase this season following promotion to the Championship, mainly thanks to
the higher TV distribution, but also from likely increases in gate receipts and
sponsorships.
Strong attendances
Derby’s average attendance bounced back from the 22,214 low
in the Championship in 2021/22 to 27,259 in League One in 2022/23, as there was
renewed enthusiasm about the club following the exit from administration. Derby have had the highest average attendance
in each of their two seasons in League One. In 2022/23, their 27,259 was ahead
of Ipswich Town 26,181 and Sheffield Wednesday 25,378. Even more impressive is the fact that Derby
had the sixth highest crowds in the EFL and the 20th highest in all of England,
while playing in the third tier.
Derby’s £17.2m wage bill was the third highest ever in
League One, albeit a lot less than Sunderland’s £26.7m in 2018/19. So it’s fair to say that part of Derby’s
recent success has been driven by spending (relatively) big, but it should also
be acknowledged that they have spent well. Many other clubs have splashed the
cash, but have little to show for it.
Clowes put £36m into Derby in 2022/23 with the annual report
noting that such support is critical to the club remaining a going concern, so
the owner is likely to have to put his hand in his pocket again.
Derby County are a good example of the advantages and
disadvantages of the owner funding model. This can work just fine while the
owner is happy to provide financial support, helping to fund investment in the
squad, but if he gets fed up with subsidising losses, then the club can face
problems and even end up in administration.
The good news for Derby is that they found a saviour in the
shape of lifelong supporter David Clowes, who has stabilised the club’s
financial position, laying the foundations that allowed them to secure
promotion.
As evidenced by the amazing crowds in League One, it is
clear that this is a big club, but some patience will be required after all the
trials and tribulations of the last few years.
The nature of football fans is to always want more, but in the meantime
it should be enough that this storied club managed to avoid extinction
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