Championship clubs vote on FFP rules for next season and what it means for Hull City's budget
City and their Championship peers have been locked in talks over recent months about changes to profit and sustainability rules
Championship clubs have voted to tweak rather than overhaul their profit and sustainability rules for next season, which
Hull City will hope to be a part of, providing they can avoid relegation in the final 11 games.
EFL rivals have been running working groups on how best to go forward with Financial Fair Play amid concerns over disparities between the Premier League and the rest as well as those in the Championship with and without parachute payments, including the Tigers.
The Premier League has also been debating potential changes but, with high profile cases about breaches currently ongoing, they voted earlier this month to continue to operate in their current guise for at least one more year.
In basic terms, top-flight clubs are allowed to lose up to £105 million over any three-year rolling period – but that, for a large part, does not include spending on infrastructure, women’s teams and youth development. The same rules apply in the Championship but with an allowable loss which was raised from £39m to £41.5m last year to take into account inflation from the cost of living.
The top flight will run a squad cost ratio rule in the background for 2025/26 to see if that would be a feasible system. That would limit clubs to spending 85 per cent of revenue on players' wages, transfers and agent fees – but the Professional Footballers’ Association has expressed ‘significant concerns’ about the impact that could have on its members.
The EFL was widely expected to follow suit and hold fire on major shifts for now, and that was passed at a meeting last week, although there will be three minor adjustments.
There will be a change in how add-backs are audited for profit and sustainability calculations in terms of investment in youth development and women's teams.
All clubs will now have to submit a profit and sustainability calculation at the end of a second year in a three-year cycle. That was previously limited just to clubs who were under close watch. Clubs also voted to keep the temporary raise they agreed on last season, so the loss limit will stay at £41.5m over a three-year cycle. Championship clubs will continue to discuss more significant potential changes for 2026/27.
League One and League Two already operate using a squad cost ratio system – 60 per cent of turnover can be spent on wages and transfer fees in League One; 50 per cent in League Two – but with a crucial difference that owner investment is counted as revenue.
That has been slightly changed too for next season. The first £500,000 from owners in League One can still count 100 per cent towards player-related expenditure but it will only be 60 per cent beyond that. The idea is designed to encourage investment in non-first team matters.
