Derby County have formally entered into administration on Wednesday as the financial crisis engulfing the Championship club continues.
The second-tier strugglers, managed by former England and Manchester United striker Wayne Rooney, have been given an automatic 12-point deduction under EFL rules, sending them to the bottom of the table.
They still face the threat of an additional points deduction as a penalty from the EFL relating to irregularities in the club’s accounts. Sportsmail revealed last week that this is expected to be nine points.
Derby County have formally entered into administration as their financial woes continue
Wayne Rooney’s side have been automatically hit with a 12-point deduction by the EFL
A statement from the club said that Andrew Hosking, Carl Jackson and Andrew Andronikou of business advisory firm Quantuma would serve as joint administrators.
It read: ‘I can confirm that Andrew Andronikou, Carl Jackson and I (Hosking) were appointed joint administrators of Derby County Football Club today.
‘Covid-19 has had a significant impact on the finances of the club and its long-term ability to continue in its current form.
‘We recognise that with the commencement of the 2021/22 season last month, this news will be of concern to stakeholders and fans, in addition to the city of Derby and the wider football community.
‘We are in the early stages of assessing the options available to the club and would invite any interested parties to come forward.
‘Our immediate objectives are to ensure the club completes all its fixtures in the Championship this season and finding interested parties to safeguard the club and its employees.’
BBC Sport claim owner Mel Morris has been in talks with players and staff over the past 48 hours and the club has brought administrators in.
After the appointment of administrators had been announced, the EFL confirmed Derby had been hit was a 12-point penalty.
Owner Mel Morris has tried to find a new buyer of the club amid the club’s deepening crisis
The EFL statement said: ‘The League has already held initial constructive discussions with the Administrators and will remain in regular dialogue with them as they seek to find the appropriate solutions required to assist the Club as it navigates its way out of insolvency.
‘In addition, the League will today be contacting representatives of Rams Trust (the Derby County Official Supporters Trust), DCMS, MPs from the Derby area and other relevant stakeholders inviting them to meet the League to discuss the Club’s position now that Administrators have been appointed.’
EFL chief executive Trevor Birch added: ‘I appreciate that this is a challenging and concerning period for everyone associated with the Club, particularly the staff and supporters, and it is our intention to work proactively with the Administrators and all relevant parties with the objective of securing a long-term and viable future for Derby County.
‘We will endeavour to provide timely and relevant updates as appropriate and as and when events unfold over the coming weeks.’
The Rams announced late on Friday night they had made the ‘tough decision’ to file notice to appoint administrators amid mounting financial problems.
In a statement last week, the Rams blamed the latest setback on the consequences of the pandemic and the ongoing EFL inquiry into their accounts, which had deterred a takeover in January 2020.
‘Revenues and cash flow took a circa £20million hit,’ said the statement.
‘Unlike other sectors, football has been able to only marginally reduce its cost base with the majority of outgoings being associated with playing staff who obviously could not be furloughed.
Derby could be hit with a 24-point deduction which would surely consign them to League One
‘The Covid-19 lockdown also meant that we were unable to have face-to-face meetings with a number of potential purchasers who could not visit the stadium or training ground.
‘A planned sale of the club and stadium that was due to close in January 2020 collapsed when the EFL was coerced into challenging the Stadium Sale transaction, a charge that would be dismissed some nine months later.’
Derby also claimed the ongoing investigation prevented them from drawing £8.3m in financial aid made available to all other Championship clubs to settle PAYE liabilities.
It was reported on Tuesday that any prospective owner of Derby must plough more than £50million into the club just to clear their debts before spending a penny on the playing team.
The Athletic reported that Derby’s football creditors must be paid up to £10m, while an American private equity firm is owed a secured debt of £20m. The club also faces a tax bill of close to £30m.
Rooney confirmed last week that he learnt of the news of administrators on the TV
The bombshell news came out of the blue for Rooney and his squad last week, who were preparing for their clash with Stoke City the following day.
Rooney confirmed that he learnt of the latest development via Sky Sports News, and the Manchester United legend reportedly refused to allow chief executive Stephen Pearce to speak with the players before their 2-1 victory at Pride Park.
England’s record goalscorer says he has had no contact with club owner Mel Morris ‘for a while now’ but — at this stage — he has no thoughts of leaving and even believes he could keep Derby up if the punishment does not exceed 12 points.
But Rooney talked openly of playing in League One next season if the penalty is greater. ‘I have said before that I am committed to this club and this group of players,’ said Rooney.
‘I love working with them. I’m committed to the staff and I care about them. I’ll do all I can to get us through. We will get through it for the better though there are tough times ahead in the near future.
‘I don’t know what the points deduction is going to be. It’s 12 points for administration but whether there is more, I don’t know. My job is to rebuild from the football side and bring pride and dignity back to the club.
‘This is a big club with a huge fanbase and those fans deserve my full attention and the players’ full attention. Performances like today make it a more attractive club for potential investors. It’s important we get the right people in to run this club properly.
‘If the penalty is 12 points, we have a chance [of staying up]. If it goes beyond that we might have to start preparing for League One as well.’