Birmingham City facing potentially catastrophic points deduction and transfer ban
This would knock them six places down the table
Birmingham City are awaiting to find out whether they will be hit with a 12-point deduction and a transfer ban after they were found to have breached profitability and sustainability rules.
An EFL spokesman said: “An Independent Disciplinary Commission has today sat and considered the matter between the EFL and Birmingham City in regard to the League’s Profitability and Sustainability rules for the period 2015/16 to 2017/18. Both parties await the decision of the panel.”
Between June 2017 and June 2018, the club made a loss of £37.5million, more than double the previous year's deficit.
The EFL's profitability and sustainability rules state that clubs are allowed to lose £39million over three year period. Point deductions range from three to 12 depending on the extent to which the club has breached the regulations.
The Midlands club currently sit 13th in the Championship table on 50 points. If they are hit with a 12-point deduction, they would plummet down the table into the thick of the relegation battle.
The club's financial troubles stem from a period of irresponsible overspending during Gianfranco Zola and Harry Redknapp's reigns in the dugout.
The Blues' wage bill increased from just over £22million in 2016-17 to nearly £38million the following year. Redknapp prevented Birmingham from getting relegated after Zola had led the club into a fight to survive in the second tier, but a summer of reckless spending in which 14 players were brought in has plunged the club into huge financial difficulty.
According to the Evening Express, club revenues are around £18.8m, but the club's wage bill is more than double that. For every £100 the club brings in, £202 is paid out in wages. You don't need an economics degree to work out that this is not a sustainable model.
The club also owe Birmingham Sports Holdings more than £73million, a figure that will continue to grow over the coming months.