D-Day with Portsmouth set for landmark vote to change Championship landscape
Championship clubs are set to vote along with EFL outfits over financial changes to the game.
Pompey will join EFL clubs who are tomorrow voting on significant chances to financial regulations in the game.
Championship sides will have their say on a proposal to end profit and sustainability (P&S) rules, in favour of a Squad Cost Ratio (SCR) system - which would cap spending on player costs to 85 per cent of total revenue.
Championship clubs to vote on Squad Cost Ratio (SCR) system
That would see second tier and Premier League sides aligned, with a similar set-up currently in place at the highest level of the game.
The proposals would allow an annual equity injection of £10m towards a club’s revenue, with P&S rules capping Championship losses at £39m over a three-year period.
An SCR ‘shadow system’ have been in place this year, meaning there should hopefully be a smooth transition to new rules if the proposal gains the necessary backing - with 16 Championship votes required.
The SCR rules are focussed firmly on first-team expenses - including player and manager wages. Agent fees are also considered along with transfer fee amortisation - the process which spreads a fee over several sets of accounts.
There are clear consequences for spending breaches, with an immediate six-point deduction during the relevant season. Further deductions will be applied based on the level of overspending, with a point deducted for every £6.5m spent over the limit.
Financial reviews will take place in October and March each year, with a green and red threshold system in place. A buffer will allow for slight overspending.
Pompey chief executive, Andy Cullen, spoke of the changes afoot in his programme notes in March - referencing the ‘fragility of Championship finances’.
He wrote: ‘There was a significant step forward regarding the introduction of new salary cost control rule (SCR) to replace the current profitability and sustainability rules currently operating in the division.
‘SCR has already been voted in for next season by the Premier League, while Championship clubs agreed last week to finalise a proposal for a final vote.
‘The objective is to develop more responsible financing of clubs at this level and reduce the current high, and ever escalating, rate of wage inflation.
‘The fragility of Championship finances is evident from the full set of results for 2023-24. These showed that the reliance on owner funding was now at an all-time high, with the division’s collective debt at £1.6 billion.
‘This position has been magnified further by those clubs who have already reported their results for 2024-25.’