Derby County: Championship club file notice to appoint administrators

Derby County owner Mel Morris has been seeking a buyer for the club since June 2019

Championship side Derby County are set to go into administration amid their continued financial problems.

The club, which is up for sale, said despite negotiations with a number of "credible parties", identifying a buyer was unlikely in the short term.

The English Football League confirmed they would face a 12-point deduction.

In a statement the Rams said Covid-19 had a "severe impact" on revenues and they "had no choice" but to appoint administrators to protect the club.

It claims the pandemic has cost them around £20m in lost revenue and left them "unable to service its day-to-day financial obligations".

"We cannot stress enough how devastating it is to be forced into this position," the board's statement said.

"This season, Covid-19 has continued to have a negative effect on revenues.

"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, managed by former England captain Wayne Rooney, are 16th in the table with seven points from their first seven matches.

A 12-point deduction would leave them with minus-five points and 10 points from safety.

Rams already facing points loss

Their accounts for 2016, 2017 and 2018 are already being re-examined after they were found to have broken accounting rules and they could face more points deductions for that.

The Rams were fined £100,000 and reprimanded in July by the English Football League for that breach.

Reports have suggested Derby could be docked a further nine points, with three more suspended, although the EFL said on Thursday that no decision had yet been made.

However, those talks between the EFL and the club have now been put on hold as administrators would not legally be able to accept an agreed forward business plan that the Rams would have to adhere to as part of the suspended sanction.

Derby owner Mel Morris has been trying to sell the club since June 2019, but has already had two prospective sales fall through.

In March Derventio Holdings, who were backed by the Abu Dhabi-based Bin Zayed Group, saw their takeover bid end while another from Spanish businessman Erik Alonso was called off in May.

The Rams have been under a transfer embargo since before the summer window opened, meaning Rooney was only allowed to sign free agents with strict conditions on salaries.

On the field, the Rams have won just one of their seven league matches this season and drawn four, leaving them two points above the relegation zone.

They host Stoke City at Pride Park in the Championship on Saturday.

Analysis

Ed Dawes - BBC Radio Derby's Derby County commentator

Fans will look at that statement and think Derby County have been spending a lot in the last decade.

They have signed some players who have potentially been over-priced, there's been some big wages, others have been sold for less than they were signed for. But this is the end-game for what has been at least six years of questionable management of the business and the football club.

Big Derby fans have been through this in 1983 and through the ownership of Robert Maxwell, but they've not seen the club put into administration by an ownership.

It's a very sad day for the club and supporters.

BBC Sport's Simon Stone

This is the moment owner Mel Morris had been desperate to avoid.

Morris has been talking to prospective new owners and negotiating with the EFL in a bid to steer Derby through the choppy financial waters they were in.

Slowly though, all avenues have been closed.

It will be interesting to see the reaction of MSD, Derby's major lender, to this news. Also, with the transfer window closed, where will Derby find the funds to continue to operate?

If this news wasn't bad enough, there is the prospect of another nine point deduction for previous financial issues the EFL have been investigating, in addition to the 12 going into administration would bring.

Manager Wayne Rooney has battled against all this but League One now appears inevitable.

Football finance expert Kieran Maguire

The most important thing is that whatever happens at the end of this, there is still a Derby County to support.

It's not the end, but it's going to be a very tough period of time. You have to try and separate the football club from its owners and executives.

From afar, they appear to have really let everybody else down. The profligate expenditure since Mel Morris took over, wages effectively trebled from £16m in 2014 to £47m by 2018.