It’s been almost six weeks since Birmingham City have been found guilty of breaching financial fair play rules, and were handed a nine point deduction. But there are various clubs in similar positions to Birmingham in the EFL so how have they be dealt with and what rules have they broken?
The maximum loss for a club in the EFL for a calendar year is £13 million, or £39 million spread across three years.
In January Birmingham revealed a loss of £37.5m in the 12 months to the end of June 2018, and their wage bill increase by 202% over that year. This saw the club hit with a transfer embargo and a 10 point deduction that now sees The Blues just five points above the relegation zone in The Championship.
I wonder how many other clubs will be penalised as badly as Birmingham City for breaching financial fair play rules
— Matt Dathan (@matt_dathan) 22 March 2019
However, it isn’t just Birmingham City that have breached these rules with other Championship clubs nervously looking at their finances over the last three seasons.
These clubs being Aston Villa, Derby County and Sheffield Wednesday. Derby owner Mel Morris has placed the club up for sale and the club are reportedly losing over a £1.5 million a month. Sheffield Wednesday have also admitted to breaking rules with owls chairman Dejphon Chansiri admitting work needs to be done to solve their net loss issues. Finally midlands giants Aston Villa reported a loss of nearly £32 million last season in their statement of accounts last May.
However, with things like parachute payments it makes it harder for sides coming down from the Premier League to break these rules due to huge amounts of money being given to ex-Premier League clubs.
With clubs getting almost £80 million over three years it makes it very tough for sides who don’t receive these payments to get promoted out of the EFL as they can’t compete financially. For example it would be very tough for someone like Sheffield United to pay £15+ for a player, whereas Middlesbrough who are still due to get one more installment of parachute payments, don’t have the same restraints due to these payments.
In my opinion there needs to be more communication between the EFL and Premier League as it puts a lot of clubs at a disadvantage if they haven’t got the luxury of parachute payments.
In a few years you then run the risk of creating a ‘Premier League 2’ in the top half of the Championship with the same 10-12 sides teetering between the first and second tier of English football. This is further backed up by the point that if a side who doesn’t receive excess payments tries to pay similar fees and wages for players they are hit with a transfer embargo and points deduction like Birmingham were a few weeks ago.
Overall, I think that not enough is done to make the Championship a fair playing field financially. The EFL risk making a stale and boring product if they don’t alter the financial fair play rule or find a way of restricting what clubs do with parachute payments.