Last Updated: 22/03/19 11:17am
Birmingham City have been handed an immediate nine-point deduction by the EFL for breaching Profitability and Sustainability rules, Sky Sports News understands.
Birmingham are understood to have exceeded the Â£39m allowable losses over a three-year period (up to the end of the financial year, 2018). The club’s accounts for the 2017/2018 campaign showed a loss of Â£37.5m for that single season.
It is understood the EFL felt there was no attempt to curtail spending and the club’s losses thereafter, so these have been listed as aggravating factors in the EFL’s case against Birmingham.
Sky Sports News understands Birmingham feel harshly treated under the sanctions already imposed.
Birmingham cannot negotiate a new contract with club captain Michael Morrison, whose current contract expires in the summer, due to a “soft embargo”, whereby all major financial issues have to be agreed in advance by the EFL.
Under the old Financial Fair Play (FFP) rules, QPR agreed a Â£42m settlement with the EFL in January 2018 and accepted a short-term transfer embargo, after overspending in the 2013-14 season. Bournemouth and Leicester have also reached cash settlements for breaching FFP regulations.
Birmingham are facing an investigation into their signing of Danish defender Kristian Pedersen, who was bought in June 2018, when the club were under a “soft embargo”.