Hull City faces a potential six-point deduction in the Premier League due to a £6m overspend on their profit and sustainability calculation. This breach stems from promotion bonuses in player contracts following their playoff victory over Middlesbrough.
Key points
Hull City won promotion to the Premier League
They face a potential six-point deduction
Overspend of around £6m on profit and sustainability
Breach caused by promotion bonuses in player contracts
Yet in a strange twist, winning that game means Hull must sell players before the end of the month to avoid a potential points deduction in the Premier League.
The Tigers have an overspend of around £6m on their profit and sustainability (PSR) calculation. Under English Football League rules, that could lead to a six-point penalty.
It is a breach caused by promotion bonuses included in the players' contracts.
Had Hull lost to Boro, they would not be in danger of exceeding the maximum losses of £39m for the past three seasons and there would be no points penalty in the Championship.
When the Premier League fixtures are published on Thursday morning (10:00 BST), the East Yorkshire club will have more than just their opening matches to think about.
'We have overspent and we have to sell some players'
Football finance expert Kieran Maguire told BBC Sport that Hull's loses had been "relatively modest" in recent seasons.
"That was partly due to the fact that they had some very successful player sales and they contribute towards covering those losses," Maguire said, with the Tigers earning significant fees from the sales of winger Jaden Philogene and defender Jacob Greaves.
"The big challenge for Hull is that, as we saw with the Nottingham Forest charges and points deduction a couple of seasons ago, that if a club pays promotion bonuses, those bonuses are included in the PSR calculations.
"Therefore it can unwittingly can knock a club over the £39m limit."
Maguire says that in total a squad's promotion bonuses are worth between £10m and £15m.
Hull owner Acun Ilicali has been surprisingly candid that work must be done in the next couple of weeks.
"We have overspent and we have to sell some players before 1 July," Ilicali told a Q&A at the MKM Stadium at the start of the month.
"I'm not afraid. We have managed harder things. For us, this is more manageable.
"Now we are a Premier League team, the values [of players] has raised up which is a good advantage."
Image source, Getty Images
Q&A
Why could Hull City face a points deduction in the Premier League?
Hull City could face a points deduction due to a £6m overspend on their profit and sustainability calculation.
What is the amount Hull City overspent to risk a points penalty?
Hull City overspent approximately £6m, which could lead to a six-point penalty under English Football League rules.
What would have happened if Hull City lost to Middlesbrough?
If Hull City had lost to Middlesbrough, they would not have exceeded the maximum losses of £39m and would not face a points penalty.
What are the consequences of Hull City's overspend?
The consequences of Hull City's overspend include a potential six-point deduction in the Premier League due to a breach of financial regulations.
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Hull City's Turkish owner Acun Ilicali celebrates with the trophy after the English Championship play-off final football match between Hull City and Middlesbrough
Image caption,
Acun Ilicali became owner of Hull City in 2022
Except Ilicali appears to have played his hand a little early, surrendering some of his bargaining power by openly admitting a clock is ticking.
Some of their key players - including Joe Gelhardt, Amir Hadziahmetovic, John Lundstram and Lewis Koumas - were only on loan.
The club would not want to lose the players that they do own who earned them promotion.
That includes Regan Slater, the 26-year-old midfielder who was named players' and supporters' player of the year.
Or Charlie Hughes, the 22-year-old centre-back who has won back-to-back young player of the year awards.
Hull have previously rejected offers for Hughes and goalkeeper Ivor Pandur, who is part of the Croatia squad at the World Cup.
With several Championship clubs interested in forward Kyle Joseph, a deal for the 24-year-old could cover much of the £6m.
The Tigers are also willing to invite offers for David Akintola, Abu Kamara and Kasey Palmer, with the latter two ending the season on loan at Getafe and Luton Town.
Ilicali is confident the money can be raised by selling players the club will not need in the Premier League.
Then next month they can turn to squad building.
Under PSR, deductions are now set based upon on the level of the overspend, locked to a grid.
Go over the £39m limit and it is a points deduction.
It starts at three points for under £2m, then four for between £2m and £4m, five for £4m to £6m, and six points for £6m to £8m.
A club can claim back one or two points in mitigation if their accounts show a positive trend, but this would not be the case for the Tigers.
Hull would argue that this has not been caused by regular operational overspending, but is a by-product of their success as only the promotion bonuses have caused it.
This is unlikely to hold sway, as Forest discovered in 2024 when they were docked four points, as it is a sign of sporting benefit from payments made to players.
Leicester City provide the precedent for Hull to receive the deduction in the top flight.
This led to a change in the rules, with the two competitions inserting reciprocal clauses in their regulations.
Such collaboration between the leagues was seen in February.
The Premier League took action against Leicester for an overspend through to the 2024-25 season. The EFL agreed to apply the six-point penalty in the Championship, which ultimately caused their relegation.
PSR is being replaced on 1 July by a new system called squad cost ratio SCR). Rather than assessing losses over a three year-period, it allows clubs to spend 85% of the income they generate on their squads and is assessed annually.
Could Hull face financial claims from Championship rivals?
Hull have until 31 December to submit their accounts to the EFL, with an assessment made in the New Year.
Leeds are now considering their legal options over a historic breach by Leicester when the West Yorkshire club were beaten to automatic promotion.
Hull would say that their overspend did not earn them the place in the play-offs, with the breach only triggered by promotion itself.
Who could be contacting lawyers? Boro lost in the final, Hull beat Millwall in the semi-finals while the Tigers edged out Wrexham and Derby to take the last play-off spot.
Time is tight for Hull to find that £6m. If they fail to do so it will hang over their return to the Premier League.
