Derby County owner David Clowes is eyeing fresh investment to take the club to the next level, with one finance expert shedding light on the situation.
Derby County will forever feel indebted to David Clowes who saved the club from the brink of existence in July 2022.
This was following a period of administration from September 2021, which saw the Rams suffer relegation to League One after being handed a 21-point deduction.
Since taking over the club just over two years ago, Clowes has steadied the ship and achieved promotion back to the second tier under the guidance of Paul Warne.
Now, the Derby owner is open to selling 80% of his stake in the club to bring in some much-needed capital in the Championship.
Clowes wants to sell to a ‘serious and proper’ party while remaining as chairman. It’s a plan that has resonated well with most of the fanbase as the thought of investment is exciting however, the Rams may have to navigate a stumbling block.
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The stumbling block that could prevent fresh Derby County investment
As previously mentioned, Clowes wants to sell 80% of his stake to a fresh investor, whose financial muscle can drag Derby towards the Premier League.
The process of achieving this is never going to be easy, especially when the Derby owner would be transferring control over to a different party.
Finance expert Kieran Maguire has shared some insight into the key stumbling block when securing investment, with any prospective investor needing to pass the ‘EFL’s owners and directors’ test before completing their purchase.
Speaking on the Rams Daily podcast, Maguire said: “So both parties have to make sure that they are happy with each other. And then, of course, we have the EFL’s owners and directors test. If you’re going to be selling 80% of the club, that would be transferring control.
“And under the EFL handbook, which I’ve been scrabbling to grab since you phoned me 10 minutes ago, it is very much either a director or a shadow director or a person that controls a club, where you control a club, officially 50%, but normally be looking at anything beyond 30%.”
It remains to be seen how strict the EFL’s owners’ test is to navigate but as talks have been held with some interested parties, it’s something fans will find out sooner rather than later.
Why David Clowes wants Derby investment
Clowes accepted that his capital alone wouldn’t be able to drag the Rams towards the top flight but an investor would be able to help with that.
The Premier League is one of the most lucrative leagues on the planet as the TV deals and sponsorship money make it an attractive proposition for every Championship side.
Derby very nearly went out of business trying to get there previously as years of overspending almost came back to bite them.
Clowes, of course, saved the football club and has since created a sustainable business model that sees the Rams run efficiently.
This season, survival is the minimum being asked of Warne but if they can secure a reliable and ambitious investor, perhaps supporters can start to dream of a top-flight return.