Championship facing ‘financial armageddon’ after TEN clubs placed under transfer embargo last month

Ten Championship clubs were placed under transfer embargo at the same time — with concerns growing that some second-tier outfits are facing ‘financial Armageddon’.

Sportsmail can reveal that late last month, almost half of the league was subject to a registration ban in a bombshell discovery which has led to claims the integrity of the competition has been seriously undermined.

The clubs in question were Birmingham City, Blackburn Rovers, Cardiff City, Coventry City, Derby County, Huddersfield Town, Luton Town, Reading, Sheffield Wednesday and Stoke City.

Ten Championship clubs were placed under transfer embargo at the same time last month 

Wayne Rooney’s Derby are one of the ten second tier clubs to have been hit with the ban 

Of those, it is understood that Huddersfield have now come off the list, while Stoke are expected soon to follow suit, with both clubs being hit with the penalty thanks to administrative — rather than financial — issues.

However, the shocking size of the group has illustrated the strain clubs are under, thanks in some cases to overspending.

On Tuesday Coventry issued a statement confirming the transfer embargo, while explaining they had take a Government option to file company accounts with a three month delay.

The club outlined that the ‘purely administrative embrago’ would then be lifted thereafter, and summer plans would not be impacted. 

The Covid-19 pandemic, which has removed matchday revenue, has also had a grave impact and there are fears that many in the group will be unable to strengthen their squads for next season.

The EFL declined to comment. A spokesperson said: ‘The league does not confirm the names of clubs placed under registration embargo.’

However, one unnamed official, at a club not on the list, said: ‘This shows you what we are up against.

‘When you have almost half the league under embargo it questions the integrity of the whole competition. 

‘This isn’t just one or two. Covid has had an impact but you have a lot of clubs spending money they simply don’t have. Financial Armageddon is coming.’

The transfer window does not reopen until the summer. Some believe clubs are taking the penalty now hoping that they will be in a position to trade their way out of embargo when it reopens.

An unnamed source warned of a ‘financial armageddon’ and said player sales will be impacted

But the official warned that the impact of the pandemic means that selling players to the top flight will be difficult, saying: ‘The Premier League have gone on record to say that Covid will cost £2 billion this season.

‘In the January window, with a couple of exceptions, it was mainly loans. While top players may move, Championship clubs will do well to get decent money for the players they’re already looking at selling.’

Clubs can be forbidden from signing players for a wide range of financial offences.

All of those clubs on the list were approached for comment. No responses were forthcoming.