Points loss will be ultimate sanction if League clubs break new spending rules

Under the plans that were agreed at the League’s summer conference of clubs in Cyprus, teams in the Championship will only be allowed to spend what they earn from the start of the 2012-13 season onwards.

Also passed at the two-day meeting was a proposal for a salary cap to be introduced in Leagues One and Two that will see all clubs restricted to spending 55 per cent of their annual turnover on player wages.

At the moment, the 24 members of the basement division have to adhere to a 60 per cent limit – a rule that has led to several transfer deals being blocked to keep clubs in check.

League officials have pledged to police the new rules equally vigorously when they come into force next year, with clubs who transgress likely to be handed a transfer ban, which would cover both permanent and loan deals, as a first sanction.

That, in itself, will reduce a club’s spending. Serial offenders would then face more severe penalties such as points deductions, a punishment that the League believe will act as sufficient deterrent.

The new financial rules are a major victory for League chairman Clarke, who last week admitted his concern at the collective £700m of debt owed by the 72 member clubs.

Around 80 per cent of this is attributable to teams in the second tier of English football, while Deloitte revealed earlier this week in their 20th annual report into the game’s finances that a third of Championship clubs currently pay more in wages than they receive in revenue.

Clarke has been pressing for change since the BBC’s decision to decline to bid for coverage saw the value of the League’s television deal for 2012-15 fall by 26 per cent to £195m.

The League chairman said last night: “This could be a seminal event that reshapes football finances in England.

“The clubs are aware of the ground-breaking decision they have taken and we will work hard now to make it happen.”

The agreement to accept the system “in principle” at the League’s summer conference followed a presentation by Andrea Traverso, UEFA’s head of club licensing and financial fair play.

European football’s governing body first announced their own financial fair play proposals two years ago and they will come into effect from 2014. Any teams breaking the rules will be subject to a ban from European competition if they fail to break even over a three-year period.

In terms of the new Football League regulations, the decision to bring them in next year was taken to give clubs time to get their finances in order. League officials had previously calculated that over 80 per cent of current player contracts will have expired by the summer of 2012.

Yesterday’s changes mean almost all teams in the four divisions will soon be covered by spending constraints.

Although the Premier League have not adopted the measures, 19 of the 20 top-flight clubs – all apart from Blackpool, in fact – applied for a UEFA licence last season and so would have to pass the financial fair play criteria.

The Football League’s move reflects concern over income and the fact that their new domestic television deal represents such a huge drop from the £246m currently being banked by clubs.

Clarke added: “This is a very important step forward for professional football as it will help our clubs exert greater control over their finances.

“Much more work needs to be done, but I am hugely encouraged and impressed by the energy and focus of our clubs on this issue. They have been the catalyst for change and have shown a real desire to self-regulate in this area. I congratulate them on taking this bold step.”

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