Birmingham to agree to EFL plan due to financial problems ahead of City clash
PUBLISHED: 09:22 03 August 2018 | UPDATED: 09:22 03 August 2018
Birmingham have agreed to adhere to a business plan imposed by the English Football League due to the club's poor financial state ahead of their opening-day clash with Norwich City.
The EFL said in a statement that it had determined that the Sky Bet Championship club had recorded losses in excess of the permitted amount between the 2015/16 and 2017/18 seasons.
As part of the business plan, Birmingham have been restricted in terms of new signings.
The club will be permitted to register former Denmark Under-21 international Kristian Pedersen, who was signed in June, plus a further five additions, if required.
The EFL statement read: “Under the Profitability and Sustainability rules that are aligned with the Premier League, the club has agreed, with immediate effect, to adhere to a business plan imposed by the EFL, which includes a number of financial targets, including controlling player related expenditure, which together have the objective of meeting the requirements of the P&S Regulations moving forward.
“The objective of the imposed terms of the business plan is to move the club towards compliance for forthcoming reporting periods.”
Birmingham were hit with a transfer embargo on July 1, having been under a ‘soft’ embargo since April, after breaching Financial Fair Play regulations.
Referring to the signing of Pedersen, the statement adds: “The decision to allow the club to register Kristian Pedersen was taken after consideration of the legal position as between the club, player and the EFL.
“The EFL is exceptionally disappointed that the club entered into an employment contract with the player at a time they knew they would be subject to a business plan for 2018/19 if they were in breach.”
Birmingham will now be referred to a disciplinary commission which hear representations from both the EFL and the club before reaching a decision.
The commission, under EFL Regulations, has the ability to invoke a full range of sanctions should the breach be confirmed.