Referee Needed: Football clubs look set for court battle
November 24, 2021
3 min read
What's going on here?
Football club Wycombe Wanderers could sue Derby County, according to the BBC. This is a complex case in which Derby County has been found guilty by the English Football League of financial misconduct. The club was using an invalid method of valuing its players, which meant that it circumvented spending protocols put into place by the Football League. Derby County’s chairman admitted that had it submitted those numbers correctly, the club would have breached regulations and would have suffered a potential points deduction. That’s where Wycombe Wanderers comes in, as the club was relegated from the Championship (the second highest division of English football) last season by a single point, with Derby dramatically staying up. Had Derby suffered a points deduction, it would likely have been relegated instead.
What does this mean?
There is a significant difference between the television income of a Championship team and that of a team in League One (the division below the Championship), and Wycombe Wanderers would likely look for financial compensation for its losses. There is nothing a court can do about having to travel to play Morecambe instead of Middlesbrough, but there has been a precedent set for cheating to be punished financially. Sheffield United was relegated from the Premier League in 2007, but it was later discovered that West Ham United, the team that stayed up, had illegally signed the player Carlos Tevez during the season, who scored some crucial goals for them. Sheffield United threatened to sue West Ham, and a £20m settlement was finally reached. Spending in the Premier League is so high in 2021 (check out our report on that here) that a similar situation to this might result in much higher settlement figures today.
In a recent interview, Rob Couhig (the owner of Wycombe Wanderers) said “Not being in the Championship this year has cost us, on the surface, around £10m… It has probably cost another £5-10m in residual monies that would have come from us being in the Championship for a second year. It is a £15-20m loss. I am not just chairman and chief executive; one of my obligations is to the 25% of my shareholders, which is a trust made up of almost 1,000 of our fans. How do I explain to them that we have lost, in effect, £20m without looking at all the options?”
He believes, correctly, that Mel Morris (Derby County’s owner) knew the impact of the club’s actions last season, delaying until the last possible minute to remain in the Championship and bring in the extra television money. How much Derby County could have to give Wycombe Wanderers is up for debate.
To make things more complicated, Derby County is in administration right now and is shedding staff at an alarming rate. Even without this claim, Derby County is in severe trouble right now as tendering administration means a potential 12-point deduction, and likely relegation this season. The club is joint-favourite to fall out of its current division in the latest championship betting odds with Coral, meaning that it could be joining Wycombe Wanderers in League One anyway. To make matters worse, the club is expected to get a further nine-point deduction for its historic breach of the financial rules, almost certainly seeing it drop into League One. If Wycombe Wanderers is not promoted, it could mean a huge grudge match between the two next season, whatever the outcome in court.
What's the big picture effect?
In the first instance, there is a moral issue around Wycombe Wanderers’ promotion to the Championship. It earned that promotion by finishing in the top six positions of League One on a “points per game basis” during the curtailed 2018/19 season. Some clubs, such as Peterborough United, feel very strongly that they would have finished above Wycombe Wanderers had the league been continued normally. If Rob Couhig pushes on with his action, it is likely to spark adverse reactions from clubs that lost out that season.
Despite the recent pandemic highlighting the precarious situation at many clubs, very little seems to have changed regarding the financial landscape. In the Championship, there have been three successive seasons where a club has been relegated based on its off-field economic issues rather than on-field performance; Bolton Wanderers, Wigan Atheltic and Sheffield Wednesday. The big picture could be examining why clubs are cheating and getting away with it, and perhaps refreshed calls for an independent regulator to look at football, from the free-spending Premier League down to the grassroots level.
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