⚽️ The £200m demise of Derby County
This week TLP explores the 6-year timeline of the demise of Derby County Football Club and it's owner Mel Morris. We also explore how a ban on gambling could cost over £100m.
Meet Mel Morris.
In May 2014, Mel Morris bought a 22% stake in Derby County Football Club.
In September of 2015, Mel had become the sole owner of the club and was on a mission to get Derby County back to the Premier League.
The following years however, were tough for Derby County.
Derby lost £14.7m in 2016 and £7.9m in 2017 and we were heading for further losses in 2018.
The football league allows for clubs to lose £39m over a three year period. In an attempt to curb the breach of rules, Mel announced that he had bought Derby’s famous Pride Park stadium for £80m.
On the 22nd May 2019 Derby played the most important match of their recent history. The Play-Off Final. Under management from Frank Lampard, Derby were 1 win away from reaching the Premier League and securing guaranteed financial freedom for Mel Morris and the northern club.
Derby County lost that match 2-1.
Shortly after, manager Frank Lampard left, so did key players Mason Mount and Fikayo Tomori and Derby were struggling once more.
Whats worse? The Football League deemed the “purchase” of the stadium by Mel Morris to be unethical and charged Derby for breaching financial sustainability rules.
At this point, Mel had no choice but to try and sell the club.
In August 2020 a Swiss consortium looked close to a takeover bid. As the pandemic struck, they backed out.
In November 2020, a deal was struck with Deventio Holdings, a Middle-Eastern firm run by Sheikh Khaled a cousin of Man City’s Sheik Mansour. This deal also collapsed.
Mel claims to have sunk £200m of his own money into Derby County and at one stage was losing over £3.0m each month.
Players wages are currently not being paid with manager Wayne Rooney reportedly paying players out of his OWN pocket.
This week, Derby County filed for administration and were deducted 12 points.
They now sit bottom of the Championship.
Wayne Rooney, the current manager, was told of this by watching Sky Sports News.
Derby County are an unfortunate example of a club taking a punt in reaching the lofted heights of the Premier League and falling short.
The risks are often worth it. For example, Aston Villa who beat Derby County in that famous play-off match survived relegation from the Premier League and received £106.4m in their first season. An amount that would have likely solved many of Derby’s problems.
Since then, they have stayed in the League, receiving a similar amount the following season and have recently sold Jack Grealish for a record £100m.
It remains to be seen where Mel, Wayne Rooney and Derby County go from here, but what is apparent is that there is little protection for clubs that dare-to-dream and miss.
I’ll be sure to update you on their fortunes as more news reaches us.
Elsewhere in the 🌏 of Sport:
⛳️ Rory McIlroy and his two-year old investment arm Symphony Ventures announced a £7.2m ($10m) investment in Drive Shack, an immersive chain of golfing experiences in the USA. He invested in their new business called Puttery an indoor putting course that provides entertainment through live music, food, and drinks for its guests. Rory and Symphony will receive 10% ownership in each Puttery venue that is planned to open through 2023. Rory has 14 other investments via Symphony since the companies inception.
💵 Paris Saint Germain announced Crypto.com as their official cryptocurrency partner last week. The multi-year partnership is in the range of €25M–€30M, with a “significant portion” paid in $CRO (the company’s official token). This deal brings the total spent on deals with sports brands for Crypto.com over £300m ($411m). A large part of their push for brand awareness has been with sports brands. Who knows if a slowdown is in sight!
⚽️ Dapper Labs, the company who built the NBA’s “Top Shot” digital NFT collectible platform announced a new fund raise of $250m on Thursday. The latest round values the company at $7.6bn which TRIPLES the companies value in less than six months. “Dapper Labs is growing quickly but we’re just scratching the surface of what this new technology can do” said Roham Gharegozlou, CEO of Dapper Labs. DL recently announced a deal to make NFTs for La Liga in Spain.
📲 Premier League set to lose out on Millions in Gambling cull
Reports in the media suggest that Premier League clubs will lose the ability to partner with betting companies in 2023 as the Government review the 2005 UK Gambling Act.
Such a move in the UK would follow similar bans in Spain and Italy which have come into force in the last few years.
Currently, NINE Premier League Clubs have gambling companies for shirt sponsors (see below), with another six in the Championship:
Brentford —> Hollywood Bets
Burnley —> SpreadexSports
Crystal Palace —> W88
Leeds —> SBOTOP
Newcastle —> FUN88
Southampton —> Sportsbet.io
Watford —> Stake.com
West Ham —> Betway (worth £10m/season, the biggest gambling deal in the League)
Wolves —> ManBetX
According to recent research gambling logos appear on our TV screens over 700 times in a regular UK football match.
The Government launched a full review of gambling laws in December 2020 and this move is muted to be the biggest action taken.
The Football League are set to be the biggest losers. They currently have a lucrative sponsorship deal SkyBet worth close to £40m annually.
Advocates of the move suggest the ban would have a significant impact in reducing gambling addiction across the country.
📺 The best thing I’ve seen this week:
I’m Jordan, I enjoy bring you these articles every week. As a Man United fan I did not ever expect to see Gary Neville be such a key figure in British Sport in 2021, but as time continues it’s encouraging to see his views. At 12:00 he gives an empathetic view on Derby County and the current future of British Football ownership.
See you next week.