Portsmouth chief responds to Championship growth fears for club under new financial restrictions
New Squad Cost Rules are being introduced in the Championship, with experts suggesting they will favour bigger clubs. Chief executive Andy Cullen outlines the situation for Pompey.
Andy Cullen is adamant Pompey can continue to grow under new financial controls arriving in the Championship.
And the Blues chief executive has revealed the reasons why his club voted in favour of the introduction of new Squad Coast Rules (SCR), set to be introduced next season.
Cullen on SCR: ‘We can operate within rules comfortably’
SCR will replace the existing Profit and Sustainability (P&S) system and will limit clubs to spending 85 per cent of their allowable revenue on player, management and agent costs.
Experts believe this will advantage clubs with bigger revenue streams compared to the P&S system, which allowed all clubs losses of £39m over three years.
Pompey’s prudence in recent seasons will work in their favour, however, with the ‘headroom’ they’ve created under existing rules counting towards their equity allowance.
The new broadcast deal being negotiated between the EFL, Premier League and possibly Independent Football Regulator (IFR) will not count towards that revenue total.
Unlike similar rules in the Premier League, Championship clubs are allowed to inject an equity top-up of £33m over three years, however.
Cullen said: ‘We voted in favour of the proposal, 16 was the minimum requirement and 20 clubs were in favour.
‘Why did we vote for it? We think it’s responsible for the whole of football going forward.
‘Firstly it’s measured in real time and we’re conscious three clubs finished on asterisks for insolvency, financial irregularities and not being able to meet P&S rules.
‘The P&S rules are retrospective, so they measure your results over the preceding three seasons, whereas SCR is real time.
‘So you will not be able to register players if you’re breaching your projections for the season.
‘Effectively we’re in a place where no club can spend more than 85 per cent of their allowable revenue.
‘Unlike the Premier League you can top it up with equity, so clubs over a three-year period can introduce equity injections of a maximising of £33m over three years - and £15m in any one year.
‘So again it protects a bit from owners putting £30m in one year and then losing interest if it doesn’t pay off.
‘It does mean those clubs with massive revenue streams can spend more.
‘I don’t have a problem with that because they’re spending within their means - and that’s not been the case in the Championship. That’s why we’ve seen so many problems.
‘But in terms of how we can continue to grow, develop and what our aspirations are as a football club we can operate within these rules comfortably.’
Cullen stressed that regardless of which financial controls are in place, Pompey are in line with the rest of the Championship in needing significant owner cash injections to cover losses.
He added: ‘What it doesn’t change is for us to operate as a football club we need continued owner investment.
‘We should never forget that we need that to break even on the revenue we generate.
‘That’s true of every Championship club - and we’re one of the better ones in being more financially sustainable, if you wish to describe sustainability as requiring the owners to put in £12-13m a year.
‘It takes us to a level where, in terms of Portsmouth, we will still require owner funding every year.’