English Championship club Derby County are set to face as many as a 21 point deduction after the club announced their intention to enter administration. The EFL confirmed the Rams will face a 12-point deduction in addition to the nine-point deduction for breaking Financial Fair Play rules. The owner of Derby County, Mel Morris revealed he is devastated and cited the COVID 19 pandemic as well as failed takeover bids as the chief causes of the situation they are currently faced with.
“This action was made necessary by a number of developments. Last week, it became clear that the process which has been underway to identify a purchaser likely would not be productive over the near term, despite the number of negotiations with credible parties.” English Championship club Derby County said in a statement. “The irony is that the club’s financial forecasts show the emergence of a financially sustainable picture. Absent the COVID-19 pandemic, we undoubtedly would have been able to trade through. However, the impact of COVID-19 pandemic and the unpredictability it has created represents too much of a strain.”
“The club will be subject to an insolvency event under the terms of the EFL’s Regulations. As a result, the Club faces a 12-point deduction. Once the EFL has received formal notification of the application, the deduction will be applied.” the EFL said in a statement. “The League is disappointed with the comments made by the club in respect of COVID lending facilities. The EFL entered into a debt raise to provide its clubs with access to funds that would support them in dealing with the impact of COVID and, as with any loan, this was subject to a timeframe and eligibility criteria that Derby County was unable to meet.”