According to a report in today's Guardian ,The Football League has been threatened by several of its clubs with a legal challenge to the financial fair play (FFP) rules aimed at halting the financial losses sustained by many clubs in the Championship. The Manchester-based law firm Brabners, which says it represents "several Championship (and one League One) Clubs" but did not name them, has written to the League's chief executive, Shaun Harvey, making extensive objections to the principles and details of the FFP rules, warning of legal action if substantial changes are not made.
"It is likely that unless the FFP rules are modified, the Football League should expect a challenge from any number of clubs and/or players or agents suffering sanctions or the consequences of sanctions,"
The FFP rules require clubs backed by wealthy owners to limit their losses this season to £8m or face sanctions, either a transfer embargo or, if they have been promoted to the Premier League, a fine. The measures were agreed in April 2012 by the overwhelming majority of Championship clubs, 21 voting for to three against, after two years of detailed discussion, because their financial losses were considered increasingly unsustainable.
The League's chairman, Greg Clarke, commended the vote as "a courageous decision".
Championship sources have said the clubs objecting include Leicester City (whose most recent accounts, for 2011-12, show the club lost £30m), Queens Park Rangers (who lost £23m in 2012) and Blackburn Rovers (who lost £37m in 2013). The League One club which Brabners says it represents is believed to be Wolverhampton Wanderers. Their most recent accounts, for the 2011-12 season when they were in the Premier League, show a £2m profit but they have since suffered consecutive relegations.
Clubs which make losses greater than the permitted £3m, plus £5m which must be covered by an owner's investment, will be prohibited from signing new players in January if they are still in the Championship.
If they have been promoted to the Premier League, such clubs face a fine on a sliding scale, from £1,000 for a relatively small loss to multi-millions of pounds for those who spent excessively enough to make very large losses.
Bolton Wanderers of course have cited FFP as a main reason why the spending of other Championship clubs has yet to emulated at the Reebok Stadium, with manager Dougie Freedman often claiming that his hands are tied as a result of the potential consequences of Wanderers failing to comply with FFP.