Championship clubs have approved some minor but potentially very significant changes to the current financial rules

Sunderland and their Championship rivals approved some minor but significant changes to the division's Profit & Sustainability Rules this week, closing a notable loophole.

As a result of the changes, the EFL will from next season be able to impose a sanction from the Premier League's independent commission. That could be a significant shift in future seasons as any club relegated to the Championship who then are hit with a penalty by the Premier League will now be punished while in the second tier.

Discussions remain ongoing between Championship clubs as to whether to change the rules entirely in future. As it stands clubs are limited as to how much they can lose over a period of three years, but a switch to a system whereby clubs can only spend a percentage of their total income on player costs is being considered. Premier League clubs are currently discussing similar changes, and the Championship would likely follow suit.

A statement from the EFL said: "At an Extraordinary General Meeting (EGM) today, Clubs in the EFL approved changes to the Championship division’s Profit & Sustainability Rules (P&S) for the 2025/26 season to address the transition of Clubs between the EFL and Premier League.

"As is currently the case, all clubs will still be required to file an estimated P&S calculation in March for the current season and the two immediately preceding seasons, irrespective of whether the Club was in the EFL or not for all or part of that time.

As a result of the changes agreed today, from the 2025/26 season:

- The Club will then file its audited accounts and a final P&S calculation with whichever League it is in at that time in the following December.

- The EFL will be able to apply a sanction imposed by the Premier League’s independent Commission, with an equivalent provision included in the Premier League’s rules, should it be required.

- When the EFL receives the estimated P&S calculation in March, it can still take pre-emptive action if a Club is forecasting a breach, which can be in the form of a business plan or requiring player sales once the transfer window opens in June.

"At an earlier Club Meeting in February of this year, Clubs approved other changes to the P&S rules relating to add backs, audit and disclosure. Following today’s votes, the full P&S rules for the 2025/26 season will be distributed to Clubs and published on EFL.com in due course.

"In addition, as part of a broader review of financial controls in the Division, discussions remaining ongoing amongst Championship Clubs on the merits of introducing a Squad Cost Ratio system which would limit clubs to spending to a set percentage of their income on player-related costs. The Premier League has been operating a similar shadow Squad Cost Ratio calculation during the 2024/25 season and will continue to do so in 2025/26."

Sunderland's PSR situation explained

The move will offer no concerns for Sunderland for next season, should they fail to win promotion to the Premier League.

Chief Business Officer David Bruce told a recent meeting of the supporter collective that the club were well placed within the EFL rules.

The Black Cats last month released their latest set of accounts, covering the 2024/25 season - their second back in the second tier. The accounts showed an operating loss of £8.1 million, down slightly from the previous year. The accounts included the sale of Ross Stewart to Southampton but not Jack Clarke's move to Ipswich Town last August. Sunderland's position for the next set of accounts covering the campaign will be strengthened by the recent sale of Tommy Watson to Brighton & Hove Albion.

The Championship's financial rules (PSR) limit losses over a three year period but Chief Business Officer Bruce told a recent meeting of the Sunderland Supporter Collective that the club were well placed.

The minutes from the supporter collective meeting read: "It is important that Sunderland AFC is financially stable. The Club has a lot of working space regarding PSR, the EFL’s financial control regulations."