On Friday 17 September 2021 the directors of Derby County Football Club put the club into administration.
We caught up with chief executive Nigel Clibbens – an advocate of the Fair Game movement – to get his opinion on why it matters, not just to Derby but also to Carlisle United and every EFL club.
“On Friday the directors of Derby County effectively ‘handed the keys in’ with the club being ‘bust’ or ‘insolvent’ or ‘bankrupt’ - whatever the term we choose to label it with, it’s the same outcome,” he said. “That is a desperately sad situation for everyone who supports and loves that club, and the end of a chapter for another of the biggest clubs in the EFL.
“It’s the club of Brian Clough, one of the best teams in England in the mid-1970’s, with a rich history. They are the former Champions of England.
“Indeed, the image accompanying this article shows the Carlisle United players of 1975 forming a guard of honour as Archie Gemmill et al come out of the tunnel on the final day of their successful season to celebrate their achievement.
“Beyond the sympathy for the personal devastation of the many hard-working club staff who now face losing their jobs, the many businesses in the community who won’t be paid, and compassion for the tens of thousands of their fans, it should also be a very sobering moment for all fans of all EFL clubs, and those involved or working in the wider game at this moment in time.”
The failure of Derby County is different and exposes the deeper structural crisis in the game
“When other clubs have failed in recent years, like Bolton, Wigan, Sunderland, Bury and Macclesfield, all the reasons for failure have focused on ‘bad owners’ like:
- Overseas owners – who just don’t understand the game, or were somehow 'fooled'
- Non-local or a non-fan – who 'didn’t understand the history or community' – any club will do
- In it for the money – taking cash out, looking for a profit
- Not looking longer-term – no investment in academy or ground or community, short-term opportunists
- Absent – not interested in the wider game or EFL – never seen, no connection or engagement with fans
“The usual list of vanity, insanity and profit motives were the individual features of each club under the spotlight.
“For those other clubs unfortunate to be also 'ticking’ the same boxes, concerns are raised and they look worryingly for help and hope to the EFL. For the rest, they take comfort in the hope that ‘we are different’ and it won’t happen to them.
“Well, none of the usual signs of a ‘bad owner’ were present at Derby, but it still wasn't enough to stop them from going bust.
“On the contrary all the boxes were supposedly ticked for the perfect long-term fan investor and owner? One any EFL club would love to have?
"Someone who would invest huge sums of cash into a club (by some reports up to £200m) to try to make it a success on and off the field and in the community (Derby won the EFL Community Club of the Year in 2018). Huge crowds, awards, plaudits, play-off finals, excitement, big signings and ambition in abundance.
“Even with all the boxes seemingly ticked, when your club’s survival is 100% dependent on personal cash being injected into your club every month, year in, year out by a benefactor, the club is obviously fragile; unexcepted and unpredictable events can bring ruin.
“Even worse for the wider game, the EFL and the pyramid, Derby followed a way of running their club that:
- Many EFL clubs all follow today and will do tomorrow, especially in the Championship, but increasingly in League One and League Two; racking up big losses, spending what they cannot otherwise afford without the relentless cash from a benefactor to pay the bills.
- Many existing owners continue to follow the same plan despite seeing the failure of others.
- Most new owners coming into the EFL follow the same plan and celebrate in doing so (and often are not wanted by fans unless they do it).
- The ‘ambition’ of those clubs, owners and directors not copying the rest, or seeking to find a way to copy the rest, is questioned.
- Managers and football players (who have no financial risk at all, and will still be paid every penny in full) are all delighted to be part of signing lucrative contracts purely dependent on the benefactor. Even clubs in distress have a queue of people willing to sign new deals safe in the knowledge they will not lose out if a club goes bust or is sold on.
- Plenty of administrators and executives are also happy if they can join in, but everyone is being paid wages by the benefactor the club can't afford to pay on its own.
- Many fans are happy to see their clubs follow that plan, or wish their club could or would, to keep up with the spenders.
- Media hype up the spending race, and fuel it, and even worse promote more of it, highlighting the spenders and those who can't keep up.
- The EFL regulations (put in place by clubs) enable it to happen and the EFL are not able to effectively control it, they are constantly playing catch-up with clubs and owners who set the rules and then look for ways round them.
- Fellow EFL clubs continue to see other clubs go to the wall but are still not prepared to address it in sufficient numbers to bring sufficient change from within.
- The wider ‘football family’ of authorities and law makers continue to sit and watch.
“The reliance on benefactor funding creates a financial bomb in a club, waiting for the fuse to be lit,” he added. “When that is accompanied by 'poor management’ that can be the spark to light the fuse.
"Riches in football don't protect you from bad management decisions. Whether it's overspending decisions, making the wrong choices, not fixing problems or repeating the same mistakes over and over, or simply taking excessive risks.
“Many decision makers within clubs, whilst knowing the huge risks still take them, some fail to see the risks and consequences (because they are just not capable). Individual mistakes are only part of it. There are also other problems that shorten the fuse to disaster.
“For those funding and making spending decisions, saying ‘yes’ is always easier than ‘no’ (and for some impossible) especially when the money is there from a benefactor - it can seem like it will never end. Another player, a better deal, the final piece of the jigsaw - it is easy to self-justify the extra that will maybe just bring the ultimate prize.
“At Championship level the 'prize' of Premier League promotion is massive and it can look like it will recoup all past spending. That extra deal could make the difference and bring £150m. Why not?
"There are no plaudits for financial control if you don’t win games, and there are no complaints for overspending when a club is winning on the pitch and the bills are being paid.
“When many rivals are all following the same path, braking from the herd needs courage. Can you do that and still be ambitious, or does it mean you are happy with mediocrity?
“Saying ‘no’ is too often portrayed as being unsupportive and unambitious. But an inability to say 'stop' plus seemingly certain future benefactor funding leads to and excessive risk-taking and devalues good decision making. If the decision is wrong, fix it by more spending.
“The reality is individuals might not push back because it’s not in their personal interest to do so. Faced with an owner who hires and fires and appoints and removes directors, and puts the cash in to keep a club afloat, pushing back against even reckless decisions is not easy (especially when others could be actively promoting it and gaining personally – with no personal financial risk to themselves).
“Walking away doesn’t solve the problem either and can make it worse by removing any dissenting voices who actually try to put brakes on the behaviour.”
“The culture towards finance in football is wrong,” he continued. “The regulators, FA and EFL all in some ways enable it.
“Yes, failure can be triggered by an unplanned or unexpected surprise (like Covid), but that isn’t the cause.
“Why do previously very successful people in other businesses consistently follow this path with the risks it brings? Why do 'expert' executives participate and facilitate it? Why can’t the EFL prevent it?
"These are the core issues for the wider game to face up to and fix.
“Yes, there are always real questions of individual competency in running clubs, but the underlying cause for the risk taking behaviour is that the English football financial model is totally broken, and a new approach and culture is needed.
“In the current environment what is preventing any EFL club becoming the next Derby? For all fans at all clubs, I would ask what is actually stopping your club becoming the next Derby?
“Carlisle United supports Fair Game. We joined at the start of the initiative to get the change in the game (click HERE for more information on that).
“We are working together to find long-term solutions to governance structures, tackling sustainability, integrity and community issues currently in the game (visit the Fair Game website HERE).
“Having worked in the insolvency industry trying to save football clubs from going bust before I got a job in this industry, and now having worked in every division of the EFL for over 10 years and seen how it works from the inside and outside at all levels, I see the game can’t save itself from more failures like Derby.
“Sadly, for many in the game, they 'think' they have more to lose by changing the finance governance structure, and that’s why it doesn’t stop and won’t change without Government intervention. They are mistaken in fearing change.
“The individuals who want to fix the problems within the game, for the benefit of all, can’t make it better on their own. Often individuals inside a club can’t even stop others from taking decisions that risk ruin. The current regulatory regime doesn’t stop it, and it doesn’t protect clubs enough from those owning and operating them.
“If we want to avoid clubs continuing to be ruined we must change, and that can only come from external intervention. Fair Game is proposing changes to do that. We need the fan-led review to make the change happen.
“Until the financial and governance structure of the game is addressed, it is inevitable there will be more clubs like Derby, and more fans waking up with their club being bankrupt and in ruins.
“Everyone who makes a living from the game, and who can make a difference, should take a long look in the mirror at what they are doing that continues to allow this to happen, and then what they are actually doing for the game to stop the next Derby.
“That’s why I personally support 'Fair Game’, as does the club.
“Carlisle United has had its financial issues, as I have spoken about in my updates before. At every fans’ forum, and on an ongoing basis, there are questions on our spending, ambition and the lack of a benefactor.
“If Derby tells us anything as a club, it must be that succession and a change of name over the door and a benefactor to fund spending are not the holy grail for any club, and that includes here at Carlisle.
“Money can dry up or be totally wasted. That is not a sustainable approach. It creates a huge risks. There is no substitute for management expertise and good decision making, regardless of money.
“Getting locked into a reliance on benefactor funding to pay bills every month brings the risk of ruin, as Derby shows. The game must address these issues, or we will continue to see more of the same.”
