BLUES FACING HEFTY POINTS PENALTY
A FOOTBALL finance expert believes Birmingham will be hit with a points deduction next month from the English Football League.
The club’s accounts show losses of £37.5million in the 12 months to the end of June 2018, more than double the previous year’s deficit.
A rising wage bill under former Blues bosses Gianfranco Zola and Harry Redknapp was the biggest cause of that increased loss.
Birmingham have net liabilities of £55m and owe parent company Birmingham Sports Holdings more than £73m.
The accounts refer to a notification from the EFL received in August 2018 “in connection with breaches of the profitability and sustainability rules”.
Under those rules, Championship clubs are only allowed to lose £39m over three years, with points deducted on a sliding scale from three to 12, depending on the extent of the breach.
Kieran Maguire, a football finance expert and senior accountancy lecturer at the University of Liverpool, believes Birmingham have broken the limit by more than £11m, which would put them close to the maximum penalty that is triggered for breaches of more than £15m.
Maguire said: “Birmingham, after a few years of relative austerity, went for broke under Harry Redknapp.
“The club invested heavily in the playing squad with a combination of big-money transfers, free agents on huge wages and loans.
“The strategy backfired, the club struggled and Redknapp was sacked. The EFL are unhappy with the club’s cavalier approach to financial fair play and are expected to make a ruling in February with a wide range of potential sanctions.”