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EFL: Financial Fair Play - Sky Bet Championship

31 December 2016

An initial review of the 2015/16 Sky Bet Championship FFP submissions indicates that all clubs met the ‘Fair Play Requirement’ introduced under the competition rules in 2012.

It would mean for the first time since the FFP regulations were agreed by all league clubs that no team from the Championship (who provided a submission) will exceed the maximum permitted deviation, which was set last season at £13m (£5m loss plus £8m shareholder investment).

Failure to meet the deviation limits has previously resulted in clubs facing financial sanctions or an FFP embargo.

Promoted clubs Burnley, Middlesbrough and Hull City all stayed within the fair play regulations whilst two of the sides relegated to Sky Bet League One – MK Dons and Charlton Athletic – also met the requirement.

However, Bolton Wanderers - also relegated to League One – have not submitted a 2015/16 FFP return or audited accounts and as a result will remain under FFP embargo.

One other Championship club (Nottingham Forest) is still to submit a copy of its audited accounts and failure to do so will result in an FFP embargo from January 1, 2017. However, their FFP return does suggest that they would meet the Fair Play requirement. Once the audited accounts are submitted any FFP embargo would be lifted.

The EFL also remains in discussions with a number of Championship clubs over last season’s FFP submissions and in the unlikely event they do not meet the £13m limit, then they would also face an FFP embargo and 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 five 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.

Financial Fair Play 2016/17

This season sees the implementation 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 FFP 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 EFL 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 (compared to an equivalent figure of £105m in the Premier League) over a rolling three season timeframe measured from March 2017. 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.

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