Football League to curb debts

Championship clubs could face huge fines if they ignore new financial fair play regulations announced by the Football League.

New regulations include 'Fair Play Tax', reveals Football League chairman

Championship clubs could face huge fines if they ignore new financial fair play regulations announced by the Football League on Wednesday. The initial regulations will be brought in next season with multi-million pound fines for non-compliance and transfer embargoes also set to follow in 2014/15. The aim is to curb spiralling debt across the lower leagues and avoid the problems that have plunged Portsmouth to the brink of liquidation. Football League chairman Greg Clarke revealed on Wednesday that combined debts could reach the £2 billion mark in five years' time if no action is taken. "The Championship is spending more and more and more money on players, chasing the dream," said Clarke. "We do not want to kill the dream. What we want to do is make sure it is affordable and make sure that the price of the dream is not the destruction of football clubs. "The problem is getting worse and we were going to be facing an extinction event of actually losing potentially three or four clubs - not to administration, but to liquidation."

Limits

The new rules will limit the investment of club owners in a season. Next season, total investment can be no higher than £6 million. The following year there is a £5 million maximum and by the 2014/2015 season owners will only be allowed to invest £3 million per year. The Football League is also tackling the extravagant spending that has led to huge losses as clubs gambled on promotion to the Premier League. Last season that gamble paid off for QPR after recording a loss of over £25 million. But the aim is to ensure these risks become a thing of the past with the new regulations stipulating that annual losses can total no more than £4 million next season, £3 million per season in the 2013/14 and 2014/15 campaigns, and £2 million from the following year onwards. Any team not complying will be hit with a 'Fair Play Tax' of up to £10 million if promoted. And if promotion is not achieved, a club breaching the regulations would be placed under a transfer embargo until they complied with the rules.