EFL financial changes to affect Birmingham City after ‘unanimous acknowledgement’

The EFL are set to make changes to their stringent Profitability and Sustainability Rules (P&S).

At a meeting on Friday Leagues One and Two agreed to revise their salary protocols due to the rising number of clubs posting big yearly losses. The results of the close season review will have an impact on Birmingham City now that the club is in League One.

An EFL statement said: “At a combined divisional meeting today, Leagues One and Two agreed to revise and update their set of Salary Cost Management Protocol (SCMP) rules.

“There was a unanimous acknowledgment amongst clubs that there is an immediate and acute need for reform in order to stem the rising losses facing both divisions, currently averaging £5m per club in League One and £1.5m in League Two. Clubs are committed to implementing change and will consider the issue over the course of the close season.”

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However, more interestingly for Blues in their quest to return to the Championship, is the news that the EFL are considering replacing the current P&S system. Second tier clubs are currently permitted to make losses of up to £39million across a three-year period.

Blues fell foul of the EFL’s rules in 2019 after a series of big spending transfer windows and they were deducted nine points towards the end of the 2018/19 campaign.

In relation to P&S, the statement added: “Separately, in the Championship, clubs have also committed to change and agreed in principle to target the end of the calendar year to determine how future cost controls in the division will work.

“Clubs will now consider multiple options to enhance or replace the current Profitability and Sustainability Rules (P&S) via a new working party that will represent the views of all 24 clubs before deciding on the most appropriate direction of travel.”

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