Following a review of information submitted, for the three year period 2015/16 to 2017/18, by Birmingham City to the EFL in regard to the League’s Profitability and Sustainability (P&S) rules, the EFL has determined the Club has recorded losses in excess of the permitted amounts.
The Club will now be referred to a Disciplinary Commission which will hear representations from both the EFL and Birmingham City before reaching its decision. The Commission, under EFL Regulations, has the ability to invoke a full range of sanctions should the breach be confirmed.
Under the P&S rules that are aligned with the Premier League, the Club has agreed, with immediate effect, to adhere to a business plan imposed by the EFL, which includes a number of financial targets, including controlling player related expenditure, which together have the objective of meeting the requirements of the P&S Regulations moving forward. The objective of the imposed terms of the business plan is to move the Club towards compliance for forthcoming reporting periods.
Accordingly, Birmingham City has been restricted in terms of new player registrations. The Club will be permitted to register Denmark under-21 international Kristian Pedersen, plus a further five additions, if required.
There are a number of conditions on which these acquisitions (other than Pedersen) can be made, which are consistent with those as set out in the Financial Fair Play (FFP) rules which pre- dated the P&S Regulations.
The decision to allow the Club to register Kristian Pedersen was taken after consideration of the legal position as between the Club, Player and the EFL. The EFL is exceptionally disappointed that the Club entered into an employment contract with the Player at a time they knew they would be subject to a business plan for 2018/19 if they were in breach.