Posted by Ed Thompson on Thursday, October 30, 2014

With Championship clubs due to submit their Fair Play information to the Football League by 1 December, it is worth considering which clubs are likely to have breached the rules and the likely impact.



Looking at the Championship clubs, 9 are viewed as being ‘Likely’ or ‘Very Likely’ to receive a Transfer Embargo from January.



The Football League will look back at the season 2013/14 and determine which clubs exceeded the permitted loss limits for that season. During 2013/14 clubs were able to make losses up to £3m for the season (rising to a maximum of £8m if the owner was prepared to put their hand in their pocket to inject equity [i.e. not loans] into the club to cover the difference).

Some expenditure is excluded (such as charitable donations, promotion bonuses, and youth development expenditure). N.B. Championship Youth Development costs are unlikely to be much over £700k.

Club 2012/13 profit/loss Transfer ban likelihood Notes Birmingham -£4m Very likely Results released in HK for 2013/14 suggest losses above threshold. Owner unlikely to have inject equity Blackburn -£36.5m Very likely Club have already stated a transfer ban is to be expected Blackpool £4.6m Unlikely Bottom of table with well-documented issues but costs seem to be under control Bolton -£50.6m Very likely Club over £160m in debt and recent press reports that club may be sold. Bournemouth -£15.3m Very likely The 12/13 loss related to L1 – costs will have increased since then. £5.75m cash for Lallana in July unlikely to be enough to remove ban for Summer Brentford -£6m Hard to call Likely to need an equity injection from owner and probably OK if injection made Brighton -£14.8m Unlikely Advocates for FFP who have cut costs to meet thresholds. Equity injection will probably be required. Cardiff N/A Not possible Ex PL club so no ban possible until 2015/16 Charlton -£6m Hard to call Likely to need an equity injection from owner and probably OK if injection made. New owners net spenders this season. Derby -£7.1m Unlikely Sold naming rights to stadium last season but will need equity injection. Tfr profit last season and subsequent spending suggests club will be within limits Fulham N/A Not possible Ex PL club so no ban possible until 2015/16 Huddersfield -£4m Unlikely Advocates for FFP and want interactive FFP controls Ipswich -£9.8m Unlikely Club cut costs and McCarthy announced “we are keeping to FFP rules, I’m damn sure not everyone else is” Leeds -£9.4m Likely It is hard to envisage either owner having injected the equity to cover losses over £3m. Sale of McCormack for £10.4m will help 2014/15 results. Middlesbrough -£14m Very likely Owner likely to inject equity but despite cost-cutting, unlikely to be within threshold Millwall -£1.9m Very unlikely Costs under control and don’t appear to have paid a transfer fee for last two seasons Norwich N/A Not possible Ex PL club so no ban possible until 2015/16 Nottingham Forest -£17.1m Very likely Likely ban reported by local press. Club spent heavily last season and reinvested sales proceeds in Summer on new signings. Reading -£2.3m Hard to call Parachute payments will have helped considerably but whether they cut costs enough is hard to call. New owner in place before end of financial year so equity injection likely. Key player sales will help 2014/15 position. Rotherham -0.5m Very unlikely A club used to keeping costs under control Sheffield Wed -£3.7m Unlikely Appear to have kept costs under control and require minimal (if any) equity Watford £0.2m Unlikely Low net spend over last two seasons Wigan £0.8 Very unlikely Parachute payments and sale of McCarthy for £13m should see Wigan OK Wolves -£30.4m Hard to call Most of the huge losses were exceptional one-off items what would not be expected to be repeated. However whether the club managed to keep to their limits during their promotion-season from L1 is difficult to say.



Of the three clubs that were promoted to the Premier League last season, Leicester and QPR are expected to have incurred total fines or around £50m in total:

Club 2012/13 profit/loss Fair Play tax likelihood Notes Leicester -£34m Very likely Fine could easily be around £20m Burnley -£7.6m Hard to call Owner likely to have injected equity and any fine (if there were one) would be very low (i.e. less than £250k) QPR -£65.4 Very likely Fine probably somewhere between £27m and £35m





How the embargo works

Any embargo would be applied before the start of January Transfer window. Under the ban, a club could still players however they will only be able to sign a player if it is on a ‘one a one-out, one in’ basis where both the following conditions apply:

The club has fewer than 24 registered players, and

The incoming player has wages of below 75% of the departing player.

Once an embargo is applied a club can apply in March to the Football League to have the ban removed. However the removal of the ban cannot take place until 31 May 2015 and will only occur where the club has submitted Interim Information that confirms the club is on target to pass the FFP test in the following December (i.e. relating to the 2014/15 Season).

It is therefore possible that some of the clubs that start their transfer embargo in 1 January 2015 will not have their ban removed during next summer’s transfer window.

Possible changes to the FFP rules

On 6th November Championship clubs are due to meet to discuss and vote on new FFP rules. The current version of the rules were voted in by member clubs in April 2012; meetings to update the existing rules took place towards the end of last season but clubs could not agree on a new measure. Any new rules are unlikely to impact on any transfer embargoes due to be applied in January (although they could potentially impact on any transfer embargoes relating to summer 2015.