Birmingham City: Championship club reveal £37.5m losses for 2017-18 season
A fuller extent of Birmingham City's financial worries has been revealed by publication of the Championship club's owners' most recent accounts.
Chinese-owned Blues lost £37.5m in the 12 months to the end of June 2018, over double the previous year's deficit, largely as a result of an increased wage bill from £22m to almost £38m.
It is the same time period already under English Football League scrutiny.
And Blues now know that their expected EFL hearing will be heard in February.
This has been speculated about both in the local and national media for some months - and that the end result would be a points penalty.
In the accounts report, City chief executive Xuan Dong Ren confirms that the club received EFL notification in August "in connection with breaches of the profitability and sustainability rules".
- Potential 21-point penalty for financial breaches
- EFL allows Blues to sign five more players
- Blues confirm EFL transfer embargo
The club are currently eighth in the Championship under Garry Monk, 17 points clear of the relegation zone.
Blues revealed prior to the start of this season that they were under an EFL transfer embargo.
This was then lifted, as they worked closely under EFL guidance, following a model business plan which was further made clear to a Championship meeting in September when clubs were briefed on potential penalties - as high as 21 points - if they breach spending regulations.
Blues had by then been given permission to sign five more loan players in August - and are now understood to be allowed one more signing in January.
How bad is it?
- Under the EFL's profitability and sustainability rules, Championship clubs are only allowed to lose £39m over three years.
- According to the accounts, Birmingham City spent more than £15m on transfer fees in 2017-8.
- With club revenue edging up to £18.8m, Blues paid out £202 in wages for every £100 brought in - double the league average.
- With transfer fees factored in, that grows to £243 out for every £100 received.
- As a result, Birmingham have net liabilities of £55million and owe parent company Birmingham Sports Holdings more than £73million.
- That sum will grow over the next 18 months, as the directors' report reveals a further £39m will be needed to keep the club afloat.
- Birmingham Sports Holdings are owned by Hong Kong-based, British Virgin Island-registered firm Trillion Trophy Asia, who took over in October 2016.
- Blues were then sixth in the Championship, under then manager Gary Rowett, who was sacked two months later, with the club outside the play-off zone only on goal difference.