Squad Cost Ratio – what is it and how does it affect Cardif

Squad Cost Ratio – what is it and how does it affect Cardiff City FC?


CCFC TRUST:



Squad Cost Ratio (SCR)



Quick Summary for Members:



SCR is the EFL’s financial control regime for Championship clubs — introduced for season 26/27, it is essentially the league’s new version of Financial Fair Play.


Clubs can only spend up to 85% of their income on total squad costs (which includes wages for players ,1st team manager, transfer fees, agents).


Income is tightly defined — only certain profits count, and player‑sale income is based on cash received in any financial year, not the headline total transfer fees.



Owners can inject fresh cash, but only up to £34.3m over three years (max £16m in any single year).
Costs include wages for first‑team, Under 21 players (see next point),1st team manager and cash‑basis transfer payments.
Players under 21 are excluded until they’ve played 10 qualifying games, at which point they count fully.
The club must submit an SCR pre-season budget and an SCR mid-season forecast each year, The Club Financial Reporting Unit (CFRU) will commence live monitoring of the Clubs SCR position from the January 2027 transfer window.
Sanctions apply if a club breaches the ratio, but Cardiff City’s 2026/27 budget is built on staying within the 85% limit




Full Summary


Squad Cost Ratio (SCR) is the EFL Regulation controlling Financial Fair Play for Championship clubs. In preparing this summary we’ve reviewed the relevant sections of the EFL Regulations and discussed them with Cardiff City’s senior management team responsible for compliance.




What are the rules?

At its core, the rule is simple:

Championship clubs cannot spend more than 85% of their allowable income on total squad costs.

Squad costs include player and manager related expenditure and agents’ fees. The detail, however, sits in what counts as income and what must be included as cost.

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Income

Qualifying income includes:

Matchday income such as ticket sales, sponsorship, matchday advertising and car‑park revenue.
Profit (not gross revenue) from food and beverage, stadium hire for events and merchandising in-store or online.
Profit from player sales are counted for on a cash basis only — meaning the money received in the financial year, not the full transfer fee if paid in instalments.
Fresh cash injections from the owner, capped at £33.4m over three years, with no more than £16m in any single year. Note that debt write‑offs or debt‑to‑equity conversions arising from cash received in prior years doesn’t count towards the £33.4m or the £16m








Costs that must be included are:

First‑team player wages, including basic salary, Signing on Fees, Loyalty Fees, Agents fees and bonuses, all on a cash basis. For example, promotion bonuses earned in 2025/26 but paid this season count towards the 2026/27 SCR. and bonuses earned in 26/27 but paid post the year end count in 27/28 for SCR purposes
Players under 21 are normally excluded, until they become “Established Players” — defined as playing 10 senior games (in Championship) then from game 11 onwards their wages must be included.
The full salary of the first‑team manager, but not assistant managers or wider coaching staff, including Academy staff.
Transfer fees and related agents’ fees, on a cash basis — all cash paid in the year counts, even if the total fee is spread across multiple seasons in the club’s audited accounts.
Monitoring






Each year, prior to the season beginning, the club must submit an estimated pre-season SCR report , effectively a financial budget , followed by a mid-season forecast in December. The CFRU will commence live monitoring of the Clubs SCR position from the January 2027 transfer window onwards.

If a club breaches the ratio, sanctions can follow unless the issue is quickly resolved. Cardiff City’s budget for 2026/27 has been built on meeting the 85% compliance threshold throughout the season.

Should you have any questions regarding the above, please don’t hesitate to contact us and we’ll endeavour to answer them.

Regards,

Board of Cardiff City Supporters

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Thanks Annis
That's good information to know - I always wondered what the criteria was but never got round to looking it up

So a lot of clubs in this division seem to be spending right up to their limits?.