Derby County published their financial accounts last week for the first time since David Clowes completed his takeover and one finance expert has now issued a problem that the Rams may face if they get promoted.
Derby County are firmly in the race for automatic promotion. Following three straight wins in League One, Paul Warne’s men arrive into their fixture against Bolton Wanderers on Saturday one point above them in second.
With eight games of the season left to play, promotion back to the Championship remains a distinct possibility and while it’s the division Derby desperately want to be in, it does have its drawbacks financially.
Kieran Maguire explains Derby County’s key problem if promotion is achieved
When Derby released their accounts for the last financial year ending June, the headline figure was a £30 million operating loss, although £19.75million of that is written down as “impairment of goodwill”, which is the price of the business compared to the market value of the assets and liabilities.
Finance expert Kieran Maguire has revealed that an overall loss of £10 million places them in the top three or four clubs in the third tier, whereas if they were to reach the Championship, they’d be in the bottom six.
Speaking on the Price of Football podcast, Maguire raised his concerns for Derby financially amid the prospect of promotion but has praised the amount of money they’ve brought into the club from ticketing, hospitality and sponsorship (£15.7 million).
“The club is now second in League One, it’s got crowds of 30,000 in the third tier of English football, absolutely fantastic,” he said.
“I think it’s indicative of how things can be turned round from what was a pretty appalling set of circumstances, to something which is far more positive. Getting to the Championship is where another set of problems start and £10 million pound loss in the Championship will put you in the bottom six of loss-making clubs, whereas a £10 million loss in League One will put you in the top three or four.”
Sustainability is key
For the first time in many years, Derby are being run as a sustainable football club that isn’t spending beyond their means.
Of course, promotion to the Championship would increase the amount David Clowes would be spending on playing staff, but the Rams have proven they can make shrewd additions on a limited budget.
In February, the decision to bring in Dwight Gayle on a free transfer has proven to be a masterstroke while the likes of Nathaniel Mendez-Laing, Curtis Nelson, James Collins and Conor Hourihane have all been signed during the Clowes’ tenure.
Not being able to spend due to the EFL restrictions placed on them has forced Warne into shopping for gems in the market, so in that sense, it has been a blessing.
Clowes just needs to continue making the right decisions for the club moving forward to continue living up to his hero status.