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Birmingham handed nine-point deduction by EFL for breaching Profitability and Sustainability rules

Birmingham drop to 18th in Sky Bet Championship, five points above relegation zone

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Birmingham City have been handed an immediate nine-point deduction by the EFL for breaching Profitability and Sustainability rules, according to Sky Sports.

An independent Disciplinary Commission ruled that Birmingham had exceeded the £39m allowable losses over a three-year period (up to the end of the financial year, 2018). The club’s accounts for the 2017/2018 campaign showed a loss of £37.5m for that single season.Birmingham investigation explainedBirmingham City investigation: Inside track on EFL probeSponsored link

The EFL felt there was no attempt to curtail spending and the club’s losses thereafter, so these have been listed as aggravating factors in the EFL’s case against Birmingham.

Prior to the deduction, Birmingham were 13th in the Championship table with 50 points. Losing nine points drops them five places to 18th with 41 points and leaves them five points above the relegation zone with eight games remaining.

The punishment is a first under the EFL’s new Profitability and Sustainability rules that were introduced at the start of the 2016/17 season.

It is a landmark ruling and one that will set a precedent for any future punishments for other clubs who fall foul of the EFL’s financial rules.

An EFL spokesman said in statement: “The Profitability and Sustainability Rules, aligned with those in the Premier League, became effective in 2015/16.

“Season 2017/18 was the end of the first full reporting period with Birmingham City the only club found to have breached those requirements, when it incurred adjusted losses of £48.787m, £9.787m in excess of the permitted losses.

“The disciplinary commission had the opportunity to consider all relevant factors in reaching its determination, including the club’s mitigation.”

Sky Sports News understands Birmingham feel harshly treated under the sanctions already imposed.

Under the old Financial Fair Play (FFP) rules, QPR agreed a £42m settlement with the EFL in January 2018 and accepted a short-term transfer embargo, after overspending in the 2013-14 season. Bournemouth and Leicester have also reached cash settlements for breaching FFP regulations.

Sky Sports News understands Birmingham will remain with an ‘Imposed Business Plan’ for the remainder of this season, which means they have to share and discuss all significant financial dealings with the EFL.

It is understood the club are not now under a ‘soft embargo’ and they will not face a transfer window ban this summer, but discussions about the future will continue with the EFL.

Birmingham will be able to enter into contract negotiations with their captain Michael Morrison for the first time with the ‘soft embargo’ now lifted. Morrison’s current deal expires in the summer.

Birmingham, like all clubs, will have to publish their annual accounts later this year, and if they fall foul of the permissible £39m losses over the previous three years again, they may face further punishment.

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