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Championship clubs agree to financial fair play deal

Championship clubs have agreed a financial fair play deal that will set limits of pre-tax losses.

The regulations will mean tougher sanctions for teams who fail to comply and will also stop owners funding football clubs through loans.

"They will begin to lay the foundations for a league of financially self-sustaining football clubs," said Football League chairman Greg Clarke.

The rules will not be implemented until 2014-2015 season, and take model from UEFA’s FFP scheme, which limits losses from £12 million to £5 million pre-tax.

Owners, who had previously been able to fund clubs through loans, will not be able to any longer, and instead have to fund clubs through equity.

Promoted clubs who fail to adhere to the amendments must pay a fair play tax ranging from one per cent on the first £100,000 to 100 per cent on anything over £10m.

Non-promoted clubs will not be punished financially for failing to adhere to the new rules, but instead placed under a transfer embargo.

The rules are an attempt to stop football clubs seeking promotion to the Premier League by taking too many risks after the dramatic fall of Portsmouth, who are still facing liquidation.

By Dean Mears

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