Birmingham City are in their eighth consecutive season in the Championship

Birmingham City have been deducted nine points by the English Football League for breaching profitability and sustainability rules.

Following the sanction, Blues drop from 13th to 18th in the Championship, five points above the relegation zone with eight games to play.

The EFL said Blues incurred losses of nearly £48.8m between 2015 and 2018.

That is almost £10m more than the accepted adjusted losses of £39m over a three-year period.

Both Birmingham City and the EFL have 14 days to appeal against the decision of the Independent Disciplinary Commission, which considered the matter on Monday.

Blues, who have avoided relegation on the final day in the past two seasons, said they had put measures in place to limit future spending and adhered to an EFL business plan since August.

"Decisions by the owners and the board of directors were taken with the club's best interests at heart and a determination to halt a cycle of decline and stagnation, with the intention of pushing on to fulfil ours and our fans' ambitions," a club statement said.

"This season we have taken significant strides forward on and off the pitch and the owners' commitment and intention to drive continued improvement of the club's fortunes will not diminish.

"Under manager Garry Monk, we have a very tight-knit squad of players who have performed with a sense of belonging, pride and passion. We have no doubt that will continue right to the season's end."

It is understood that there will be no further financial penalties for the club, nor will they be under a future transfer embargo relating to this issue.

Zola & Redknapp spent £31m on players

Birmingham signed Jota for a club-record fee of more than £6m while Harry Redknapp was manager

Birmingham are the first club to be deducted points since the EFL introduced its new profitability and sustainability regulations at the start of the 2016-17 season.

In January, Blues revealed a £37.5m loss in the 12 months to the end of June 2018, largely a result of their wage bill rising from £22m to almost £38m after an extensive recruitment drive in 2017.

The independent panel heard that they spent £7.45m on four new players in January 2017, when Gianfranco Zola was manager, and a further £23.75m to add 14 players to the squad that summer, by which time Harry Redknapp had taken charge.

Both Zola and Redknapp were sacked after short stints, the costs of which were also given as factors to Birmingham's rule breach.

Pedersen signing 'not an aggravating factor'

The panel decided that the signing of defender Kristian Pedersen in the summer of 2018 should "not be treated as an aggravating factor" in the case, which could have incurred a greater penalty for Birmingham.

The club was told by the EFL via email on 2 May 2018 that they were under a registration embargo as it was "reliant on future player transfers in order to fulfil the P&S requirement".

However, Blues agreed a deal with German club Union Berlin for the 24-year-old, and attempted to register him on 29 June.

In his written statement, Birmingham chief executive Xuandong Ren said he understood the registration embargo to be "provisional", and believed the relevant EFL rule did not prevent the club entering into negotiations to sign players.

However, in his later oral evidence, he "accepted" that the club's senior finance officer had "informed him by email that the club could not sign new players".

The EFL said in August that they were "exceptionally disappointed" Blues had gone through with the transfer, but allowed Pedersen to join the Championship club.

When their transfer embargo was lifted, Birmingham were told they would be permitted to make five signings in August under EFL guidance.

They signed four players in August, before Swedish international winger Kerim Mrabti signed on a free transfer in January.</s>Birmingham City have been handed an immediate nine-point deduction by the EFL for breaching Profitability and Sustainability rules, Sky Sports News understands.

Birmingham are understood to have exceeded the £39m allowable losses over a three-year period (up to the end of the financial year, 2018). The club's accounts for the 2017/2018 campaign showed a loss of £37.5m for that single season.

It is understood the EFL felt there was no attempt to curtail spending and the club's losses thereafter, so these have been listed as aggravating factors in the EFL's case against Birmingham.

Prior to the deduction, Birmingham were 13th in the Championship table with 50 points. Losing nine points would drop them five places to 18th with 41 points and leaves them five points above the relegation zone with eight games remaining.

Any punishment would be the first under the EFL's new Profitability and Sustainability rules that were introduced at the start of the 2016/17 season.

It would be seen as a landmark ruling and one that will set a precedent for any future punishments for other clubs who fall foul of the EFL's financial rules.

Sky Sports News understands Birmingham feel harshly treated under the sanctions already imposed.

Birmingham cannot negotiate a new contract with club captain Michael Morrison, whose current contract expires in the summer, due to a "soft embargo", whereby all major financial issues have to be agreed in advance by the EFL.

Under the old Financial Fair Play (FFP) rules, QPR agreed a £42m settlement with the EFL in January 2018 and accepted a short-term transfer embargo, after overspending in the 2013-14 season. Bournemouth and Leicester have also reached cash settlements for breaching FFP regulations.

Birmingham are facing an investigation into their signing of Danish defender Kristian Pedersen, who was bought in June 2018, when the club were under a "soft embargo".</s>Birmingham City have been handed an immediate nine-point deduction by the EFL for breaching Profitability and Sustainability rules.

An independent Disciplinary Commission ruled that Birmingham had exceeded the £39m allowable losses over a three-year period (up to the end of the financial year, 2018). The club's accounts for the 2017/2018 campaign showed a loss of £37.5m for that single season.

The EFL felt there was no attempt to curtail spending and the club's losses thereafter, so these have been listed as aggravating factors in the EFL's case against Birmingham.

Prior to the deduction, Birmingham were 13th in the Championship table with 50 points. Losing nine points drops them five places to 18th with 41 points and leaves them five points above the relegation zone with eight games remaining.

Birmingham said in a statement on Friday evening: "The club has put measures in place to ensure future spending is within acceptable limits and since August we have adhered to an EFL business plan, which imposed transfer restrictions upon us.

"When the club's owners took over, Birmingham City Football Club was in a dire position and investment was critical across many aspects of the business, including the First Team, Women's Team, Academy and the infrastructure.

"Then, as now, decisions by the owners and the Board of Directors were taken with the club's best interests at heart and a determination to halt a cycle of decline and stagnation, with the intention of pushing on to fulfil ours and our fans' ambitions.

"This season we have taken significant strides forward on and off the pitch and the owner's commitment and intention to drive continued improvement of the club's fortunes will not diminish.

"Under manager Garry Monk, we have a very tight-knit squad of players who have performed with a sense of belonging, pride and passion. We have no doubt that will continue right to the season's end.

"The backing of our fans has been integral, too, and the club is grateful for their support, their belief, and the connection that has been re-established between all of us who care deeply about Birmingham City Football Club has been pleasing to see.

"Birmingham City Football Club notes that it has 14 days in which to appeal the decision of the independent Disciplinary Commission and with that in mind we will be making no further comment."

The punishment is a first under the EFL's new Profitability and Sustainability rules that were introduced at the start of the 2016/17 season.

It is a landmark ruling and one that will set a precedent for any future punishments for other clubs who fall foul of the EFL's financial rules.

An EFL spokesman said in statement: "The Profitability and Sustainability Rules, aligned with those in the Premier League, became effective in 2015/16.

"Season 2017/18 was the end of the first full reporting period with Birmingham City the only club found to have breached those requirements, when it incurred adjusted losses of £48.787m, £9.787m in excess of the permitted losses.

"The disciplinary commission had the opportunity to consider all relevant factors in reaching its determination, including the club's mitigation."

Sky Sports News understands Birmingham feel harshly treated under the sanctions already imposed.

Under the old Financial Fair Play (FFP) rules, QPR agreed a £42m settlement with the EFL in January 2018 and accepted a short-term transfer embargo, after overspending in the 2013-14 season. Bournemouth and Leicester have also reached cash settlements for breaching FFP regulations.

Sky Sports News understands Birmingham will remain with an 'Imposed Business Plan' for the remainder of this season, which means they have to share and discuss all significant financial dealings with the EFL.

It is understood the club are not now under a 'soft embargo' and they will not face a transfer window ban this summer, but discussions about the future will continue with the EFL.

Birmingham will be able to enter into contract negotiations with their captain Michael Morrison for the first time with the 'soft embargo' now lifted. Morrison's current deal expires in the summer.

Birmingham, like all clubs, will have to publish their annual accounts later this year, and if they fall foul of the permissible £39m losses over the previous three years again, they may face further punishment.

Sky Sports EFL reporter Simeon Gholam: While a nine-point deduction is not as disastrous for Birmingham's season as 12 points would have been, all of a sudden the club are looking nervously over their shoulders rather than trying to chase down the sides above them.

The club are in relegation form as well. They have suffered four defeats on the spin and it does not get any easier for them from here, as they face three of the current top four right after the international break. A visit to West Brom, live on Sky Sports Football, is followed by Leeds and Sheffield United visiting St Andrew's.

Ipswich and Bolton may be out of touch of the rest but Rotherham, Reading, Millwall and Wigan will all be just below them in the table and Garry Monk's side have well and truly been sucked into that fight to avoid finishing 22nd.

Six weeks ago a dramatic 4-3 win at QPR had seen them move to within two places and four points of the play-offs. A season that could have concluded with a trip to Wembley may now well end with them having to plan for life in League One.</s>Championship side Birmingham City were on Friday handed a nine-point deduction by the English Football League (EFL) for a breach of its profitability and sustainability rules.

REUTERS: Championship side Birmingham City were on Friday handed a nine-point deduction by the English Football League (EFL) for a breach of its profitability and sustainability rules.

The ruling by an independent disciplinary commission follows a review of the club's financial submission for the three-year period 2015-16 to 2017-18, where they recorded losses in excess of the upper threshold of 39 million pounds.

City were charged in August and pleaded guilty during a hearing on Monday.

The deduction, effective immediately, will see Garry Monk's team drop five places to 18th in the second-tier with 41 points and they could face a potential relegation battle with eight matches remaining this season.

"The Profitability and Sustainability Rules, aligned with those in the Premier League, became effective in 2015-16," an EFL spokesman said.

"Season 2017-18 was the end of the first full reporting period with Birmingham the only club found to have breached those requirements, when it incurred adjusted losses of 48.787 million pounds.

"The disciplinary commission had the opportunity to consider all relevant factors in reaching its determination, including the club's mitigation."

The EFL said that the change to the Championship table was subject to the outcome of any appeal. The parties have 14 days to appeal the decision.</s>Birmingham have been docked nine points after breaching financial rules, the EFL has confirmed.

The Sky Bet Championship club breached the league’s profitability and sustainability regulations and faced a possible 12-point deduction and a transfer ban.

The penalty sees the club drop from 13th in the table to 18th, leaving them only five points above the relegation zone.

An independent disciplinary commission heard the case on Monday, where Birmingham pleaded guilty to the charge, and decided Blues should not be given the maximum penalty.

An EFL statement read: “The Profitability and Sustainability Rules, aligned with those in the Premier League, became effective in 2015/16.

“Season 2017/18 was the end of the first full reporting period with Birmingham City the only club found to have breached those requirements, when it incurred adjusted losses of £48.787 million, £9.787 million in excess of the permitted losses.

“The Disciplinary Commission had the opportunity to consider all relevant factors in reaching its determination, including the club’s mitigation.”

Press Association Sport understands Birmingham chief executive Xuandong Ren wrote to club staff on Friday confirming the deduction and allaying relegation fears over the punishment.

The club can appeal but it is understood one is unlikely.

The Blues lost £37.5million in the 12 months to the end of June 2018, more than double the previous year’s deficit.

The main cause of Birmingham’s deteriorating balance sheet was an increase in the wage bill from just over £22million in 2016-17 to nearly £38million the following year as former managers Gianfranco Zola and Harry Redknapp were lavishly backed in the transfer market.

As a result, Birmingham have net liabilities of £55million and owe parent company Birmingham Sports Holdings more than £73million, a sum that will grow over the next 18 months as the directors’ report reveals a further £39million will be needed over that period to keep the club afloat.

Under the EFL’s profitability and sustainability rules, Championship clubs are only allowed to lose £39million over three years.

It is understood the club faced a charge of an “aggravated breach” after signing Danish defender Kristian Pedersen for a reported £2.25million last summer despite knowing they were under investigation.

The EFL initially refused to register the signing, saying it was “exceptionally disappointed” Birmingham had bought him, although he was eventually cleared to play.

Former boss Gary Rowett, who was sacked in December 2016, feels the club will be relieved it was not a bigger punishment.

“My initial reaction was that at least it wasn’t 12 points as that’s the sort of figure which has been about for quite some time now,” he told Sky Sports News.

“At least the nine points, at the very least, gives them a little bit of a buffer from the bottom three. That’s your main concern, like the two previous seasons, you’re in danger of a relegation battle.

“When I saw some of the figures, because they’ve been quite public, since we’ve been there I think the budget has trebled in a year which is incredible.

“It goes to show money doesn’t buy you a miles better player in the division if you don’t get your recruitment right.

“The second thing is everyone is so desperate. These are owners coming into a new club wanting to get into the Premier League.

“It’s probably the reason they bought the club. I’m not suggesting people are blameless but sometimes it tends to be the people advising the owners, rather than the owners themselves.”</s>Birmingham have been hit with a nine-point deduction and are now facing the prospect of a relegation battle after breaking the English Football League’s spending rules.

The Championship club will plunge down the table after a disciplinary commission panel concluded the punishment should be nine points but they will not be subjected to a summer transfer embargo.

As first revealed by The Telegraph in September, Birmingham were facing a deduction of up to 12 points for breaching the EFL’s profitability and sustainability rules. The EFL recommended the points deduction and a further transfer embargo for the summer window.

Birmingham’s legal team and the EFL appeared before a hearing on Monday and the final decision has been agreed by the three-man disciplinary panel and will be announced later today. It is unclear at this stage whether Birmingham will appeal.

Garry Monk’s team are currently on 50 points in the Championship, 14 points adrift of the relegation zone.

But this deduction could have severe repercussions for their season with eight games left to play. A deduction of nine points would take them down to 18th in the table, just five points clear of the bottom three.</s>Birmingham City have been deducted nine points rules for breaching rules on profitability and sustainability, the English Football League (EFL) has announced.

The punishment means Birmingham, who have lost their last four league games, drop from 13th in the Championship table to 18th, five points clear of the relegation zone.

Former manager Harry Redknapp spent heavily before steering the club away from relegation to League One in the 2016-17 season, but has denied responsibility for the points deduction.

“It’s surely down to the people who run the club, like the chief executive and the chairman, or whoever, to know if we’ve got any money to spend,” Redknapp told The Daily Telegraph ahead of the EFL announcement.

“I didn’t know anything about Financial Fair Play. I was never warned by anyone at the football club that there was going to be a problem with that.”

The EFL said Birmingham recorded losses in excess of the £39million upper loss threshold for the three-year period 2015-16 to 2017-18. Birmingham have 14 days to appeal the decision.

“The Profitability and Sustainability Rules, aligned with those in the Premier League, became effective in 2015-16,” said an EFL spokesperson.

“Season 2017-18 was the end of the first full reporting period with Birmingham City the only club found to have breached those requirements, when it incurred adjusted losses of £48.787million, £9.787million in excess of the permitted losses.

“The Disciplinary Commission had the opportunity to consider all relevant factors in reaching its determination, including the club’s mitigation.”</s>LONDON: Championship side Birmingham have been docked nine points for breaching financial rules, the English Football League announced on Friday (Mar 22).

The Championship side broke the EFL's profitability and sustainability regulations and faced a possible 12-point deduction and a transfer ban.

The penalty drops the club from 13th in the second-tier table to 18th, leaving them only five points above the relegation zone.

An independent disciplinary commission heard the case on Monday and decided the Midlands club should not be given the maximum penalty.

It follows a review of the financial submission from Birmingham City for the three-year period 2015/16 to 2017/18 where it was determined the club had recorded losses in excess of the £39 million (US$51 million) threshold.

"The profitability and sustainability rules, aligned with those in the Premier League, became effective in 2015/16," said an EFL spokesman.

"Season 2017/18 was the end of the first full reporting period with Birmingham City the only club found to have breached those requirements, when it incurred adjusted losses of £48.787 million, £9.787 million in excess of the permitted losses."</s>Have your say

Birmingham City have been docked nine points after breaching financial rules, the EFL has announced.

The Sky Bet Championship side breached the English Football League's profitability and sustainability regulations and faced a possible 12-point deduction and a transfer ban.

The penalty sees the club drop from 13th in the table to 18th, leaving them only five points above the relegation zone.

An independent disciplinary commission heard the case on Monday and decided Blues should not be given the maximum penalty.

An EFL statement read: "The Profitability and Sustainability Rules, aligned with those in the Premier League, became effective in 2015/16.

"Season 2017/18 was the end of the first full reporting period, with Birmingham City the only club found to have breached those requirements, when it incurred adjusted losses of £48.787 million, £9.787 million in excess of the permitted losses.

"The Disciplinary Commission had the opportunity to consider all relevant factors in reaching its determination, including the club's mitigation."</s>Birmingham City have been deducted nine points rules for breaching rules on profitability and sustainability, the English Football League (EFL) has announced.

The punishment means Birmingham, who have lost their last four league games, drop from 13th in the Championship table to 18th, five points clear of the relegation zone.

Former manager Harry Redknapp spent heavily before steering the club away from relegation to League One in the 2016-17 season, but has denied responsibility for the points deduction.

"It's surely down to the people who run the club, like the chief executive and the chairman, or whoever, to know if we've got any money to spend," Redknapp told The Daily Telegraph ahead of the EFL announcement.

"I didn't know anything about Financial Fair Play. I was never warned by anyone at the football club that there was going to be a problem with that."
The English Football League is to deduct Birmingham City F.C. nine points for breaching profitability and sustainability rules. Birmingham City are the first club to be deducted points since the EFL introduced its new profitability and sustainability regulations in 2016.