Why the EFL can’t be softies over Blues

HOW to solve a problem like budget-busting Birmingham? Hit them, and hit them hard. That is clearly the solution favoured by the EFL.

There now seems little doubt that chief executive Shaun Harvey and his board will dock Garry Monk’s side 12 points when they convene at the end of this month.

Under the Profit and Sustainability rules implemented in 2016, clubs cannot exceed losses of £39m over a three-year period.

Blues lost £37.5m in 2017-18 alone, yet that is not the issue. Their cardinal sin was to disregard what the League calls a ‘soft’ embargo.

Disregard

Essentially a sporting version of the special measures Ofsted impose on a failing school, a soft embargo means the EFL will collaborate with clubs destined to breach P&S, monitor their finances and allow transfers if they see proof of cuts, investment, or player sales.

This is different to a ‘hard’ embargo where a club simply cannot sign players until certain conditions are met.

Restrictive and frustrating it certainly is, but by fostering an atmosphere of cooperation, the EFL believes that struggling clubs will be less inclined to hide financial problems until it is too late. By and large, it works.

Soft embargoes are everywhere, they just aren’t publicised. Steve Bruce alluded to this fact during his recent unveiling as manager of Sheffield Wednesday.

Quizzed on the Owls’ ongoing inability to sign new players, the 58-year-old said that “probably 10 or 11 clubs” in the Championship had faced similar restrictions.

He’s right. The difference is that those clubs play ball. Birmingham - and particularly their CEO Xuandong Ren - did not.

In June, just months after the embargo was imposed, Ren sanctioned the signing of Danish left-back Kristian Pedersen for £2m. The EFL was apoplectic - and now they are gunning for Birmingham in a big way.

Is their wrath justified? Detractors of FFP would say not but, from the League’s point of view, they simply could not afford to let Birmingham get away with it.

A soft embargo hinges on trust. For any club to co-operate with what is essentially a competitive handicap, they must be sure that their rivals are playing by the same rules.

Signing Pedersen was middle finger to the EFL and a kick in the teeth to every club like Sheffield Wednesday - who have dutifully towed the line. It could not be tolerated.

More practically, however, the EFL now feel that significant points penalties are now the only way to effectively enforce Financial Fair Play.

Ever since the introduction of a spending cap in 2012, clubs have nonchalantly flipped the bird at attempts to curb their largesse.

In 2013-14, QPR won promotion with a wage bill that represented 195 per cent of turnover. A year later, Leicester went up riding a £20m loss at a time when only £8m per season was permitted. Bournemouth, who succeeded Leicester as champions, also breached the rules.

QPR have since been smacked with a world-record fine of £40m, a major victory for the EFL, but the other two settled for just £3m and £4m respectively. When you consider that Leicester reported revenues of £129m in their Premier League title-winning season, the prospect of such a paltry fine is hardly going to dissuade an ambitious Championship chairman from gambling on promotion. Points, not pounds, are the currency of punishment.

Sanction

Of course, Birmingham could reject the sanction and take the matter to an arbitration panel. Whether that happens will probably depend on where they stand in the Championship table. The Blues, after all, may soon find themselves with such a gulf to either the top six or the bottom three that a 12-point penalty has no material effect on their season. If they do appeal, however, the survival of Financial Fair Play as a meaningful concept in the EFL will be defined by the outcome.