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Bristol City, Middlesbrough and Stoke could face potential point deductions
Championship trio Bristol City, Middlesbrough and Stoke City are potentially facing points deductions, just like Reading FC and Derby County, in the near future
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Bristol City, Middlesbrough and Stoke City could follow Reading FC in receiving point deductions
Championship trio Bristol City, Middlesbrough and Stoke City are facing fresh scrutiny and could be hit with points deductions in the future.
That is according to a report in the Telegraph , which suggests the three clubs could be in danger of being punished for breaching profit and sustainability rules.
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Bristol City facing points deduction as transfer market collapse costs clubs millions
Middlesbrough and Stoke also face severe scrutiny as Covid-inflicted collapse in transfer values makes it impossible to offset FFP lossesBy Tom Morgan, Sports News Correspondent 12 January 2022 • 7:00am
Bristol City have long been perceived as one of the most financially stable regimes below the Premier League Credit: PA
Bristol City have expressed fears of being forced into a points deduction as the transfer market collapse has made it impossible to offset financial fair play losses.
Middlesbrough and Stoke are also expected to face severe scrutiny as the Football League enters the next 12 months of its three year "Profit and Sustainability" cycle.
Under the ownership of billionaire Stephen Lansdown, the West Country club has long been perceived as one of the most financially stable regimes below the Premier League.
However, Richard Gould, the club's chief executive, described to Telegraph Sport how the Covid-inflicted collapse in transfer values in the second tier has cost the club £30 million alone.
The executive has now taken the unprecedented step of warning they could be left with no choice but to take a points deduction next season unless the league fast-tracks reform.
EFL executives are exploring allowances for Covid-losses, but City are among a host of clubs concerned that the increased wiggle room will only cover matchday losses. For most clubs at City's level, a matchday-only saving might allow only around £5m on top of the current £39m upper-loss threshold for losses.
City and a host of rivals in the league now appear increasingly likely to back a salary-cap system broadly along the lines that were introduced in League One and League Two.
"We've got this big bow wave about to hit us next year on Profit and Sustainability," said Gould. "We can see it coming and it's only been brought about because the transfer market has crashed. Otherwise the business plan, which albeit required quite a lot of investment from the owner, was relatively sound. But now this big bow wave is coming, we know that we're probably going to breach it next year unless we sell a lot of our best players. And we don't want to sell a lot of our best players."
Bristol City are in ongoing talks with the EFL about their plight, and Gould accepts that the club could end up in a position next season where "maybe we'll just take the points".
Long-term reforms to the current system appear inevitable. The league and its Championship members are considering following the path taken by Uefa in exploring new rules to focus on the high levels of spending on wages and transfers rather than profit lines.
However, those reforms could come too late for City and rivals as unprecedented numbers of clubs prepare for the prospect of falling foul of the rules over the next year. In November, Reading were deducted six points, with a further six-point deduction suspended until the end of the 2022-23 season, over a loss of £57.8m.
There is no risk of City going into administration like Derby, who were deducted 21 points in total this season. However, calculations first uncovered by Liverpool University football finance expert Kieran Maguire revealed the eye-watering costs for a club which has never benefited from Premier League parachute payments.
City have lost £412,000 a week, every week, for the last 10 years from day-to-day trading, Maguire found. Overall, in the latest annual finances, City's revenue was down 39 per cent to £16.7m but wages had increased six per cent to £35.3m. Day-to-day losses increased by a quarter to £44m, with owner investment up to £214m.
Assessing the dire situation facing clubs, Gould warned that owners would get very frustrated if they managed to weather this storm and then suddenly find themselves foul of rules "that weren't designed for Covid issues".
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Should any of them be docked points, they would follow both Reading FC and Derby County, who have had points taken away this season.
Royals were given a six-point deduction, with a further six suspended, in November after losses of £57.8m.
Permitted losses over a three-year period are £39m.
Meanwhile, Derby have had 21 points deducted overall - nine for financial breaches and a further 12 for entering administration.
Bristol City fear they could be forced into accepting a points deduction, the report says, with chief executive Richard Gould stating how the collapse in transfer values because of Covid has cost the club £30m.
He said: "We've got this big bow wave about to hit us next year on Profit and Sustainability.
"We can see it coming and it's only been brought about because the transfer market has crashed.
"Otherwise the business plan, which albeit required quite a lot of investment from the owner, was relatively sound. But now this big bow wave is coming, we know that we're probably going to breach it next year unless we sell a lot of our best players.
"And we don't want to sell a lot of our best players."
He added 'maybe we'll just take the points' as City continue talks with the English Football League (EFL) to resolve the situation.
The report adds that fellow Championship clubs Middlesbrough and Stoke 'are also expected to face severe scrutiny as the Football League enters the next 12 months of its three-year profit and sustainability cycle.'
The cycles run from June to June although clubs have to make their submissions to the EFL by the start of March.
Any points deduction for the clubs are likely to come next season (2022/23).
