Derby County: Club want to 'build bridges' with EFL – chief executive Stephen Pearce

Derby chief executive Stephen Pearce (right) and owner Mel Morris
Derby chief executive Stephen Pearce (right) took over as Derby chief executive in August 2018

Derby County chief executive Stephen Pearce says the Championship club want to “build bridges” with the English Football League and fellow clubs.

The EFL has accepted defeat in its attempt to get the Rams relegated because of their accounting policies.

The conclusion of a complicated case has brought Derby some breathing space as they struggle with several issues.

Pearce has resigned from the EFL boardexternal-link to deal with them, although it was felt his position was untenable anyway.

On Friday, around the same time as the EFL was confirming it would not be appealing against the £100,000 fine imposed on Derby for the amortisation method it used in accounting for its players, striker Martyn Waghorn joined Coventry City.

It reduces still further an already small number of senior players available to manager Wayne Rooney less than two weeks before a friendly with his former club Manchester United.

A ‘soft’ EFL embargo remains in place, which stops the club signing new players or offering contract extensions.

In an exclusive interview with BBC Sport, Pearce said resigning from the EFL board was “a pragmatic and respectful decision and certainly not a protest”.

He added: “I wouldn’t want to rule out re-joining the EFL Board in future because I am genuinely proud of the work we have done. But I have a duty to my club first and foremost. Derby have gone through the hardest set of circumstances in our history.

“We want to build bridges with the EFL and member clubs, we respect them, both myself and Derby County. It is clear we do have a polar opposite view on the issue of amortisation. But that is all it is.”

Pearce added that there was no finding of “deliberate, reckless or bad faith wrongdoing” across the period and said the club was “transparent” and “didn’t gain any illegitimate sporting advantage”.

“We are now working with the EFL on the resubmission of our accounts as per the decision last week.”

The club’s finances also remain a matter of huge debate and major concern for fans. Speculation around a potential takeover is rife following the collapse of two deals in the space of six months after they had been announced by the club.

Within the written reasons of the disciplinary case that were released on 2 July, it was confirmed that apart from a short period in the summer of 2020, Derby have been under a transfer embargo since “early 2020”.

A number of reasons for this were outlined, including failure to pay HM Revenue and Customs and also their players, not submitting their accounts on time – Derby did have permission from Companies House to file late, once the outcome of the case was known – and refusal to comply with EFL requests for profit and sustainability information.

‘A strong relationship with Rooney’

Derby County manager Wayne Rooney
Former Manchester United and England striker Wayne Rooney took permanent charge of Derby in January 2021

Derby’s first pre-season game is on 18 July and there are claims the club currently only have eight or nine senior players available.

Pearce denied this, but said it must be noted the club “have been operating under some extremely testing circumstances for the past 15 months”.

“During this period we have been able to function and produce a squad – and we will look to do so now,” he added.

“We have a core of senior players and extremely talented academy players. That is enough to operate with and we have a plan for the rest of the window.

“We are not rushing to fill the squad for next week. We have a clear plan ready, pending the future ownership. One of our strengths is our strong relationship with Wayne. He is fully aware of the situation, is informed and supportive.”

It is well known that owner Mel Morris wants to sell the club. Derby confirmed on their website agreements had been reached with Abu Dhabi-based group Bin Zayed International (BZI) and Spanish businessman Erik Alonso. But both deals collapsed.

Questions have been asked about why BZI was granted an exclusivity period when no deposit had been paid and there were other interested parties.

Takeover trauma

Derby broke off talks with Alonso in May. Pearce was part of the Derby team that negotiated with BZI. BBC Sport understands he played no part in conversations with Alonso.

“Our objective is always to do what is right for the club, fans, partners, owner and any future owner,” said Pearce.

“Nobody can say BZI didn’t have the funding to show they were credible potential owners. They passed the EFL’s owners and directors’ test. Once you have seen and got comfortable with proof of funds, it is normal practice to offer a period of exclusivity with a serious potential buyer.

“We didn’t get an indication it was not going to happen until near the end. In the end, Mel [Morris] is the one who decides whether we should continue or stop.”

It has been suggested another deal with an American consortium is close to being completed and that prospective buyers were at the ground on Friday.

There has even been suggestions funds have been lodged with the EFL. Derby are refusing to comment on this, although BBC Sport understands there was no Pride Park visit on Friday.

Pearce said the club were “still working tirelessly on the ownership model with multiple parties”.

He added: “We had every reason to believe BZI were an excellent future owner. Perhaps we were a victim of the pandemic because Mel was never able to meet with them in person. Maybe that would have helped get it over the line. Who knows? We had been talking to them for over seven months.”

There has been huge speculation about how much Derby owe – and to whom. Swiss financier Henry Gabay was owed money at one stage and it is known a loan was taken out with American company MSD. In addition, players deferred wages and other bills are outstanding.

“For clarity, the only loan that is outstanding is against the stadium,” Pearce explained. “There are no other loans. That is it. It is well documented that is to MSD. The stadium is owned by Mel Morris.

“We did wage deferrals [with the players] when we first went into lockdown like most clubs. It was contractually agreed that the repayment of those deferrals would not happen until fans returned. But we said that we would do it early. We have paid them all in full.

“The December wages were late in January as reported but other than that, we have never been late with the wages and no amounts remain outstanding to the players at all.”

Seeking one careful owner

The problem Derby find themselves in now is that so much about their club is the subject of speculation on fan platforms. BBC Sport has been told by more than one source that Gabay has no involvement in Derby. In addition, it has been told local businessman Mike Horton, while being a business associate of Morris, has been to the United States for personal business reasons.

In addition, it is understood the labyrinth of companies under which Derby and its parent company operate were set up with the idea of Pride Park’s finances being dealt with separately to the club as an event host of local significance, which never actually happened.

This is unlikely to stop the speculation though, with many supporters feeling the club has created a communication vacuum.

Pearce said: “Communication to the fans is clearly important. We are custodians of their club and we want to ensure Derby are put in the hands of someone who can be a good custodian. We are working tirelessly to achieve that.”

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