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Championship Financial Fair Play

Posted: Thu 24 Dec 2015
The Football League

The Football League

Image by: File

An initial analysis of Financial Fair Play submissions from clubs that played in the Sky Bet Championship last season has resulted in three clubs being subject to sanctions.

2014/15 FFP Submissions

An initial analysis of Financial Fair Play submissions from clubs that played in the Sky Bet Championship last season has resulted in three clubs being subject to sanctions, under rules agreed with League clubs in April 2012. All three exceeded the maximum permitted deviation of £6m - consisting of a maximum adjusted loss of £3m plus a further maximum of £3m of shareholder investment.

Champions AFC Bournemouth will face a financial sanction to be finalised in due course, while Fulham and Nottingham Forest will be subject to an ‘FFP embargo’ for the remainder of the current campaign. Both clubs will have the opportunity to have their FFP embargo lifted at the end of the season by demonstrating that they have stayed within the maximum permitted deviation of £13m (£5m loss plus £8m shareholder investment) for the 2015/16 season. 

A further club, Millwall, also exceeded the maximum permitted deviation but will not face any further sanction, in line with Championship FFP regulations, following the club’s relegation to League 1 as it was not deemed to have gained any significant advantage.

The Football League is currently in discussions with a number of other clubs over their FFP submissions and will confirm any further FFP embargoes, if any, in due course.

Bolton Wanderers did not submit an FFP return owing to the club’s ongoing financial difficulties. As a result, the club will not be permitted to sign any players until it has complied with its obligations under the Championship’s FFP regulations.

Sanctions for promoted clubs:

Any club exceeding the maximum permitted deviation that wins promotion to the Premier League will receive a fine equivalent to:

- 1% of the excess amount between £1 and £100,000
- 20% of the excess amount between £100,001 and £500,000
- 40% of the excess amount between £500,001 and £1,000,000
- 60% of the excess amount between £1,000,001 and £5,000,000
- 80% of the excess amount between £5,000,001 and £10,000,000
- 100% of any excess over £10,000,000

Sanctions for clubs remaining in the Championship:

Any Championship club that is subject to an FFP embargo during the 2015/16 season will be prohibited from registering any new professional players (permanent contract or loan) unless they have:

• 24 or fewer established players (players aged 21 or over that have made at least 5 starting appearances for the club). 

Where clubs have fewer than 24 established players, they will only be permitted to sign players in the following circumstances (with the player in question being added to the club’s list of established players regardless of his age or previous playing experience):

• Where the employee costs of a player being signed are less than £600,000 per annum (or pro-rata if signed on a shorter contract).
Where clubs have 24 established players, they will be permitted to trade on a ‘one out, one in’ basis but only if the employee costs of the player coming in to the club are no more than whichever is the lower amount of:

• 75% of the equivalent costs of the player going out.
• Or a maximum of £600,000 per annum (or pro-rata if signed on shorter contract)

In addition:

• Clubs under an FFP embargo will not be permitted to pay (or commit to pay) transfer fees or compensation fees for professional players.
• Clubs under an FFP embargo will be permitted to sign a goalkeeper on an emergency basis (in line with existing regulations).
• Clubs under an FFP embargo will not be permitted to pay a loan fee to another club, they may only pay the player’s wage (or a contribution towards it).
• For incoming players, clubs can only pay Agents’ Fees as a benefit in kind to the player in question (as long as they do not exceed the £600,000 employee costs limit). 
• Clubs under an FFP embargo may register players under the age of 21 for non-first team matches.

2016/17 onwards

Next season will see the introduction of a new set of ‘Profitability and Sustainability’ regulations that will deliver a consistent approach to Financial Fair Play for those clubs that move between the Premier League and Championship through promotion and relegation.

Championship clubs voted to change their FPP rules in November 2014 as part of wide-ranging negotiations with the top-flight about future solidarity arrangements that has contractually linked the finances of The Football League and Premier League for the first time since the formation of the latter in 1992.  

The £13m limit for the 2015/16 season is in line with the losses permitted under the new regulations which will permit a maximum loss of £39m over a rolling 3 season timeframe (compared to an equivalent figure of £105m in the Premier League). A club that moves between the Premier League and Championship will be assessed in accordance with the permitted loss in the relevant divisions played in during the three-year period in question. For example, a club that had played two seasons in the Championship and one in the Premier League would have a maximum permitted loss of £61m, consisting of one season at £35m and two at £13m.