Potential Derby County buyers have been put off by the price of the Pride Park stadium, which brings the club’s total bill to over £50million, sports mail can reveal.
A number of interested parties said reaching a deal for the ground was a major sticking point in any arrangement to take over the stricken Rams, and for some it forced them away.
Derby has been in administration for six months with the announcement of a preferred bidder who could take over the constantly delayed club.
Former Derby County owner Mel Morris took over at Pride Park in 2015, aiming for the elite
EFL expected to meet with Quantuma administrators this week to discuss progress
Fans are once again eagerly waiting after administrators Quantuma said they expect to reveal the potential buyer this week.
But the parties who have spent months trying to reach an agreement say it is up to Pride Park.
“The problem is the stadium, it’s always been the stadium,” said one side who, like others, believes this is the main reason for the slow pace of negotiations.
The administrators, Quantuma, set a deadline of last Friday for bids and said they would review them over the weekend to announce a preferred bidder this week. However, on Tuesday Sun reporter Alan Nixon said on Twitter that they still hadn’t been able to pick one.
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Derby ran into financial difficulties under the ownership of Mel Morris. The longtime Derby fan invested over £200million of his own money into the club in hopes of reaching the Premier League, but that never happened.
During his tenure, Derby incurred huge debts and also sold their stadium to a company owned by Morris – who then leased it to the club.
Any buyer must repay the club’s creditors, which interested parties say can be done for around £30million under EFL insolvency rules, and the stadium should be bought separately from Morris, who has asked for £22million.
The contractor has a loan of over £20m secured against the stadium
There are fears that Derby, founding member of the Football League, could be liquidated
Sources close to Morris insist Pride Park is available at a knockdown price, as it has been valued at over £80million and is widely considered to be up to Premier League standards. They are also adamant that buying the stadium is not the obstacle to a successful sale of Derby.
People close to Morris suggest that complaints about the cost of Pride Park are driven by the gambling of potential buyers and the attempt to secure an attractive club at a reduced price.
And they say they have offered to lease Pride Park to any buyer from the club, if they don’t have the money to finalize the purchase of the land.
But the potential buyers addressed sports mail don’t want to rent it. If they want tens of millions of pounds to buy the club, they also want to own the land. And they claim they just couldn’t make the numbers work unless Morris lowered his price.
Derby County face the prospect of being deducted a minimum of 15 points next season
A £50million cost to Derby may have been high last year, according to interested parties, but to make matters worse the club’s value has steadily declined with the growing prospect of relegation to League One. and the sale of players in January.
This summer there may only be a handful of senior players under contract with the Rams as those whose contracts expire can look elsewhere from May 21 and the club have yet to be able to resign them due to a transfer embargo and ongoing administration.
“At the end of the day, they’re asking for £50m and that’s not what it’s worth,” said another side, who believes Morris doesn’t want to lose any money in the deal given the loans. guaranteed against the ground.
“If you were to pay £30m for Derby in League 1 with the ground people would, but at £50m people wouldn’t,” they added. “This £22million anchor for the stadium doesn’t allow it to move.”
For comparison, League One Sunderland was recently valued at £30m and Hull would have changed hands for £20-25m, according to football finance expert Kieran Maguire.
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It remains to be seen whether the current bidders, whose bids are now being reviewed by Quantuma, have managed to square the financial circle to the satisfaction of the EFL, the trustees, Morris and their own interests.
One option is for a buyer to pay football creditors (other clubs) in full, which they must do to retain the club’s license to play in the EFL, and pay HMRC at a preferential rate as required by the law, but refuse to pay other creditors 25 pence in the pound.
It would reduce the cost of the purchase, but it would also breach EFL insolvency rules and result in a further 15-point deduction next season, raising the possibility of further relegation to League Two.
If no deal is reached, the club still faces the prospect of liquidation.
Previously, in the long-running saga, Wycombe and Middlesbrough’s compensation claims were seen as a major hurdle in securing a deal for Derby. Morris resolved the latter with Boro chairman Steve Gibson potentially the most important.