How Controversial New Championship Spending Proposal Could Impact Wrexham

Championship clubs are set to vote on the spending proposals later this week.

Wrexham broke its transfer record three times as part of a $45 million spending spree last summer, which saw 13 new players arrive. | Malcolm Couzens/Getty Images

Wrexham are set to vote on the possible implementation of Squad Cost Ratio (SCR) rules in the Championship for next season.

All clubs in the English second tier will vote on the possible financial rule change on Friday, with 16 votes from a possible 24 required to implement the change.

The proposal would see the Championship align with the current spending rules already in place in the Premier League and replace the current Profit and Sustainability (PSR) rules.

Under current PSR rules, a Championship club is allowed to lose $56.14 million (£41.5 million) over a rolling three-year period without being sanctioned. The new proposals would instead cap spending on player costs at 85% of the individual clubs’ football revenue and also permit an annual equity injection of about $13.5 million to count toward a club’s revenue and increase spending capacity.

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How Controversial New Championship Spending Proposal Could Impact Wrexham

Wrexham signed Nathan Broadhead for an initial fee of $10.14 million. | Wrexham AFC

The proposed financial changes would bring the Championship closer in line with the Premier League, but also widen the gap further between the Championship and League One. In short, SCR rules would benefit the bigger clubs in the division with larger revenues and hamper smaller clubs that bring in less money.

The rule change stems from some clubs wanting greater freedom to invest in their playing squads in an attempt to earn promotion to the Premier League. West Brom were the latest club to be sanctioned for breaching the existing PSR rules when they received a two-point deduction last month. Reading, Derby County, Sheffield Wednesday and Leicester City have previously been found guilty of breaches as well.

In terms of how the proposal would specifically impact Wrexham, they are already comfortably under the PSR limit. Based on the latest financial results, the Red Dragons’ figure currently stands at $23.74 million, recorded when they were a League One club, and would allow a further spend of $32.47 million this season.

However, under the SCR rules, Wrexham would be able to spend 85% of their revenue. That was $45.05 million for the 2024–25 season, so it would give them $38.25 million to spend on player costs. Club sources suggest turnover for Wrexham’s first season back in the Championship will land somewhere around $65 million, a figure that will be confirmed when results are released next year. If that is the case, they would have $55.25 million to invest.

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Wrexham Latest Financial Results

Wrexham finished seventh in their return to the Championship this season. | Robbie Jay Barratt - AMA/Getty Images

Key Financial Figures	2024–25 (finished 2nd in League One)
Revenue	$45.05 million
Sponsorship Income	$23.46 million
Retail Income	$6.84 million
Matchday Income	$8.06 million
Broadcast Income	$4.60 million
Wages Costs	$26.99 million
Losses	$20.09 million

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For comparison, the average Championship revenue based on the latest estimations is $54 million. That would give an average club just shy of $46 million to invest. However, those averages are skewed by clubs that have received parachute payments following relegation from the Premier League. The average revenue of a non-parachute payment club is about $30 million, so they would be able to invest $25.5 million. That is effectively $30 million less than Wrexham.

So, while these new rules would benefit the bigger clubs in the division and those relegated from the Premier League, they would make it even harder for smaller clubs and those typically promoted from League One to compete at this level.

The rules are even more controversial when you add in the fact that League One clubs are also set to vote on their own proposals to reduce the permitted level of spending under the current Salary Cost Management Protocol (SCMP) from 60% to 50% of a club’s turnover. These proposals are a result of League One clubs’ concerns about the sustainability of the league, with a desire to reduce the costs of running a football club.

If both proposals were approved, then a Championship club could face huge struggles upon relegation if their spending levels are reduced from 85% of total revenue to just 50% of turnover.

Whatever happens, Wrexham will have plenty of money to spend this summer in their pursuit of promotion to the Premier League.

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