Stoke City ‘luxury tax proposal’ as Championship clubs thrash out Financial Fair Play changes

Stoke City ‘luxury tax proposal’ as Championship clubs thrash out Financial Fair Play changes

The EFL’s profit and sustainability regulations are being discussed by Stoke City and their Championship

competitors.

The idea of ‘a luxury tax’ may completely change Stoke City’s prospects, according to reports that championship

teams have met three times in the past month to try to sabotage plans for Financial Fair Play as early as this summer.

To put it briefly, the Championship has been operating under the same profit and sustainability regulations as the

Premier League up to this point, but with a rolling three-year maximum on losses of £41.5 million as opposed to

£105 million in the top flight.

The Premier League is now adopting a new strategy called the Squad Cost Rules, which was first used for Uefa

competitions in 2022 and limits each club’s spending on player salaries and transfer fees to a portion of their

earnings. While the Premier League is aiming for 85%, Uefa will ultimately fix it at 70%.

In contrast to the Championship or Premier League, clubs in the lower leagues already use a cap, which is set at 60%

in League One and 50% in League Two. However, up until now, owner guarantees have counted towards revenue,

which is partly why Birmingham City was able to spend so much last summer.

League One and League Two clubs, however, have opted to tighten those regulations by capping the amount of

money owners can contribute. As a result, Championship clubs are now able to voice their opinions about what

ought to occur at their level.

According to The Athletic’s Matt Slater, a finance specialist, Stoke and its opponents would “stick with profit and

sustainability while running SCR in the background to see how it works” rather of just adopting the Premier League’s

85% Squad Cost Rules cap.

Slater cautions that “While some like the logic of this idea, it seems unlikely that Premier League chiefs — or the regulator, for that matter — will be in favour of sharing more cash with guys who can pay a 100 per cent luxury tax to lose more money.”

Since their Premier League relegation in 2018, Stoke has been locked in a vicious cycle with regard to FFP. Due to

early transfer errors, the team was left chasing its tail in an attempt to assemble a stronger team for less money than

they had first spent.

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