Trio of Leeds United's Championship rivals reportedly under EFL investigation, expert says stadium loophole makes Financial Fair Play rules a 'farce'
A football finance expert says a trio of Leeds United's championship rivals have made a 'farce' of Financial Fair Play rules with stadium purchases that are now reportedly under investigation by the EFL.
A number of clubs have used a loophole in profit and sustainability rules in order to purchase their own stadiums and avoid the kind of sporting penalty suffered by Birmingham City last season. The Blues were docked nine points for breaching the rules.
But The Times reports that the EFL are investigating and have ordered independent valuations of Derby County, Sheffield Wednesday and Reading's grounds.
Derby reversed a £30.9million operating loss for 2017/18 to a £14.6million pre-tax profit, by virtue of the club selling Pride Park to owner Mel Morris for £80m and leasing the stadium back.
According to The Times, the EFL have asked property experts to put a value on the three grounds.
Leeds United owner Andrea Radrizzani has been vocal on the subject, suggesting the ground purchases should be viewed in the same light as the 'Spygate' scandal that engulfed the Whites last season.
Speaking at the Financial Times Business of Football Summit, he said: "We should revisit the rules. We were judged as a cheating club when we sent a scout to watch [Derby] training, so they should take a similar view on what I would say is greater cheating by these clubs.
“For me if it’s cheating to send a scout in a public street, what should be the punishment of selling the stadium to a sister company to increase income of the clubs?”
Football finance expert Kieran Maguire says the loophole has made a 'farce' of the EFL's profit and sustainability rules.
"It's a strange one," said the University of Liverpool's football finance lecturer.
"My understanding, certainly having obsessively gone through the rules, originally this loophole didn't exist, it was prohibited.
"In 2016 the EFL brought their rules into align with those of the Premier League.
"The deal was the Premier League would enforce EFL sanctions in the Premier League if all the rules were a constant.
"Nobody had spotted the loophole in the Premier League because realistically no one is going to need it, you make so much money there you don't need to sell the stadium to yourself.
"The EFL adopted the new rules, they didn't look at the small print, the clubs did and what Derby and Sheffield Wednesday did is just exploited the loophole.
"It's poor monitoring by the regulatory bodies, but the clubs have done nothing wrong from the perspective of compliance.
"I think you can say from a sporting fair play perspective, they've shown the FFP rules to be a farce."