Derby County: Championship bottom club docked nine more points for accounting rule breaches
Last updated on .From the section Derby
Derby County have been deducted a further nine points after admitting breaches of English Football League accounting rules.
The Championship club, docked 12 points for entering administration in September, have agreed to the dismissal of their appeal against that decision.
The latest penalty leaves Wayne Rooney's side on -3 points - 18 points from safety at the foot of the table.
It means the Rams are almost certain to be relegated to League One.
Derby have also been given a further suspended three-point deduction for their breaches of the league's profitability and sustainability (P&S) rules.
That will take effect if the Rams fail to comply with the terms of a budget for the remainder of the season set out as part of an 'agreed decision' between the EFL and the club.
EFL 'satisfied' at the agreed outcome
"The EFL's objective throughout this ongoing process has been to ensure that the principles of the regulations were upheld on behalf of all clubs," said EFL chief executive Trevor Birch.
"The EFL has considered the P&S sanction guidelines as well as mitigation put forward by the club.
"Given the complex circumstances of the case and the various outstanding regulatory issues between the EFL and Derby County, the League is satisfied at the agreed outcome and the sensible approach taken by both parties in negotiating this outcome and in respect of the appeal withdrawal."
The Rams were placed into administration on 22 September and efforts to find a buyer are continuing.
However, the issues related to their accounting practices pre-date that and they were fined £100,000 in July and ordered to resubmit their accounts for 2016, 2017 and 2018.
The rules on amortisation
The club were cleared of breaching spending rules in August 2020.
However, the EFL appealed against the decision to an independent tribunal and won the element of the case concerning how the club measured the value of players - called amortisation.
Amortisation rules should see the cost of any transfer fee accounted for evenly over the length of that player's contract - so a £5m fee over a five-year deal would be charged as £1m per year, and worth zero come the end of the contract period.
However, Derby gave players a 'residual value' - meaning that the club could increase the value of players during the life of the contract - a practice which it was claimed was not in line with generally accepted accounting principles.
It is understood that virtually all credible parties currently interested in buying the club are doing so on the basis that Derby will be in League One next season.
'Critical' to club's future to conclude matters with EFL
Carl Jackson, from Derby's administrators Quantuma, said: "This has been a difficult matter to navigate bearing in mind the various issues concerned.
"Whilst point deductions are never ideal, it was critical to the club's future that all matters were concluded between the EFL and the club in relation to historical issues.
"This conclusion allows us to proceed with our restructuring strategy for the club with prospective interested parties."
Derby have only spent four seasons outside the top two divisions of English football in their entire history.
The last occasion was in 1985-86, when they were promoted under Arthur Cox.
Takeover key to Rooney's future
Analysis - BBC Radio Derby's Derby County commentator Ed Dawes
The latest points deduction is no surprise. Punishing Derby County in this way is fair and is the only way that the EFL could manage the situation for its 71 other members.
The EFL has now clearly set out its punishment for those clubs who step out of line. Those who suffer are the employees who have lost their jobs, the supporters who have suffered seeing their club dragged publicly through the mire and the city of Derby itself.
Manager Wayne Rooney is now planning for League One and earlier in the season he did say he would start in January should the points deduction leave the Rams with little chance of survival.
Will he stay? Only if American entrepreneur Chris Kirchner wins the race to purchase the club from the administrators. The link between Rooney's agent Paul Stretford and Kirchner is there, while other interested parties including a consortium led by former chief executive Andy Appleby could go their own way on the managerial front.
What does stand is the total defiance and commitment from supporters. They were there in 1985-86 on the club's last visit to the third tier after more financial mismanagement behind the scenes - and no doubt they will be there again.
