Which Championship clubs can expect to receive a Transfer Embargo?

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.


2012/13 profit/loss

Transfer ban likelihood




Very likely

Results released in HK for 2013/14 suggest losses above threshold. Owner  unlikely to have inject equity



Very likely

Club have already stated a transfer ban is to be expected




Bottom of table with well-documented issues but costs seem to be under control



Very likely

Club over £160m in debt and recent press reports that club may be sold.



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



Hard to call

Likely to need  an equity injection from owner and probably OK if injection made




Advocates for FFP who have cut costs to meet thresholds. Equity injection will probably be required.



Not possible

Ex PL club so no ban possible until 2015/16



Hard to call

Likely to need an equity injection from owner and probably OK if injection made. New owners net spenders this season.




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



Not possible

Ex PL club so no ban possible until 2015/16




Advocates for FFP and want interactive FFP controls




Club cut costs and McCarthy announced “we are keeping to FFP rules, I’m damn sure not everyone else is”




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.



Very likely

Owner likely to inject equity but despite cost-cutting, unlikely to be within threshold



Very unlikely

Costs under control and don’t appear to have paid a transfer fee for last two seasons



Not possible

Ex PL club so no ban possible until 2015/16

Nottingham Forest


Very likely

Likely ban reported by local press. Club spent heavily last season and reinvested sales proceeds in Summer on new signings.



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.



Very  unlikely

A club used to keeping costs under control

Sheffield Wed



Appear to have kept costs under control and require minimal (if any) equity




Low net spend over last two seasons



Very unlikely

Parachute payments and sale of McCarthy for £13m should see Wigan OK



Very likely

Hard to envisage losses in their promotion-season from L1 being below threshold.

 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:


2012/13 profit/loss

Fair  Play tax likelihood




Very likely

Fine could easily be around £20m



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)



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.

With so many disparate interests and different financial positions amongst clubs in the Championship, gaining a consensus on one set of rules or approach is again likely to prove difficult.


Was FFP the reason for high-profile 'Loan&Buy' deals this transfer window?

September 3, 2014

During the Summer 2014 Transfer Window we saw a number of deals where a player was loaned for 12 months, with the option to buy at the end of the loan. There were a number of reports that FFP was the reason for this type of transaction and it is worth exploring the issue.

There are a number of reasons why clubs might want to enter into a 'Loan&Buy' deal:

To get round a spending cap

Under the UEFA FFP sanctions, Man City and PSG were give a net player spending restriction (in addition to other sa...

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Championship FFP rules ‘undermined’ by Premier League

May 26, 2014

Last week, the Championship clubs voted on a number of potential changes to the existing FFP rules. However, as none of the tabled amendments could muster the required 75% of the vote, the rules will remain as they are.  Huddersfield issued an excellent summary of the proposed changes and outlined their disappointment that ‘real-time’ monitoring of finances was not approved.

Under the current rules a ‘Fair Play Tax’ is levied on all clubs that gain promotion to the Premier  League but ...

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Reports of record €60m (£49m) fine for PSG and Man City

May 6, 2014

Following recent press reports, we now have a much better idea about the sanctions that are reportedly being offered to Manchester City and PSG. It is now up to the clubs to decide whether to accept the terms or risk a potentially more severe punishment. The punishment reported in the press raises a number of interesting questions:

Why is City’s fine so large?

When City filed their accounts, on the face of it they looked to have nominally passed the FFP Break Even test (after permitted exclus...

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Man City failure of FFP test - a matter of choice

April 30, 2014

So, now we know that Man City (and PSG) failed the FFP Break Even test. However, this was no accident. Man City didn't fail the test because of an oversight - they failed because they chose to fail. The following analogy is helpful: 

I recently handed my son £5 to buy some sweets, telling him to spend no more than £1. Inevitably, he came back with quite a lot of sweets having spent about the £1.50. He didn't exceed the budget because he wasn't able to count - he just evaluated the pros and ...

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The Benefactor Model - permitted in League 1 and 2

April 23, 2014

The Football League has clarified an important aspect of how their FFP rules operate within League and League 2. Interestingly, the FL have confirmed that their Salary Cost Management Protocol (SCMP) rules permit 'benefactor' owners to finance a club's ongoing losses (something that is restricted within UEFA, the Premier League and Championship rules). 

The League 1 and League 2 rules require clubs to submit regular financial forecasts to the Football League. Only if a club is operating within...

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Would Hull City be allowed into the Europa League next season?

March 9, 2014

 Following today’s FA Cup semi-final draw, supporters of Hull and Sheffield United must feel there is every chance that they could secure a Europa League place next season. This could be achieved either by getting through to the final and beating Wigan, or simply by getting through to a final against Arsenal. Unlike the League Cup, the losing FA Cup Finalist will be rewarded with a Europa League place if the winners have already qualified for UEFA competition.  Arsenal would need to finish ...

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Will Liverpool face any FFP punishment?

March 6, 2014

Since Tuesday's release of Liverpool’s annual accounts for last season (2012/13), fans have been asking whether they will receive a punishment for breaching the Break Even rules.  Unfortunately the FFP rules aren’t straight-forward and it is only when you produce a projection of this season’s finances that you can see how the land lies.

As I advised a couple of days ago, Liverpool will be assessed for FFP compliance over three footballing seasons - they will be able to compete in the Cha...

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Liverpool’s accounts raise interesing question of ‘fairness’ of FFP

March 4, 2014

Last Friday UEFA held an FFP update in Nyon which provided some excellent information about the current process – however it also gave rise to a number of interesting questions.

UEFA explained that the teams that potentially faced punished for an overspend during the first Monitoring Period are those professional teams that qualified for UEFA competition in 2012/13 and had a Break Even deficit in the 2011/12 season. Although the Monitoring Period looks at accounting performance over two seas...

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UEFA Financial Fair Play update – Nyon 28 Feb 2014

March 2, 2014

On Friday UEFA held an FFP press briefing in Nyon. The 2 hour session provided number of interesting updates - only a few of which have been reported in the British press.

76 clubs referred for Break Even Deficit

As has been widely reported, 76 clubs were required to provide additional financial information to UEFA. Some media outlets probably not at the session seemed to sensationalise what UEFA were saying in respect to the 76. Essentially the 76 clubs are those that met all the following cri...

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