Kieran Maguire answers questions from Oxford fans on concerning situation club are in

Kieran Maguire answers questions from Oxford fans on concerning situation club are in, placed under a temporary transfer embargo.

He appeared on the latest episode of the Walking the London Road Oxford United Podcast, chatting to Sam Williams and Connor.

The embargo prevents the registration of new players until the issue is resolved, relating to League One’s Salary Cost Management Protocol (SCMP).

Under the rules, clubs must demonstrate at the start of the season they can fund their planned player expenditure and afford their playing budget.

Oxford have not yet been able to provide all of the required funding.

Fans have since called for more transparency, with it leaving more questions than answers, in the words of Jerome Sale in a piece for BBC Sport.

Kieran Maguire said: “There’s been issues with Hull and Shrewsbury and Lincoln and a few others. We do seem to now have a a 365 day a year storyline when it comes to football and money. Never used to be like that. The jumpers for goalpost glory days are no longer sadly with us. More on that in the video above.

Back on Oxford though, Sam Williams begins: “I want to start with making sure we understand the situation. The situation is that the new EFL rules SCMP if I think I’ve got the acronym right mean that EFL clubs in one and two have to prove that they are financially able to pay for their for their squad and because Oxford haven’t been able to do that we’ve now got a registration embargo mean meaning we can’t sign anybody.

Kieran: “Yeah. I mean, I don’t know who devised the rules, but they certainly are very harsh for a club that’s just been relegated from the Championship, you know, Oxford United were losing considerable amounts of money in the Championship, the season they were promoted, I’ve just got my spreadsheet in front of me. Yeah, they lost 300 grand a week in 23/24 and 17.5 million pounds in 24/25. I suspect they will have lost similar, and under the salary cost management protocol rules, you’re only allowed to spend 50% of the money that you generate as a club on your player costs.

“To come down from the Championship where Oxford was spending £114 last season for every £100 going is almost impossible. So I do think the rules perhaps need to be revisited and I can understand the frustration of the club.

“You are then allowed to put money into the club in the form of shares, not loans. And for every £100 that the owners put in, Oxford can contribute 50 of that effectively to their playing budget. So that’s the way that the rules operate. Now, for whatever reason, Oxford have not been able to satisfy the EFL for the forthcoming season and that’s why this embargo has taken place.

“I think the owners are of the view that the money will be there at some point, but not necessarily now. And the EFL seem to be taking a harsh line. if I was Oxford United, I think I’d be fairly hacked off with the EFL.

Sam: “And do I understand right that those sides relegated from the Championship had a little bit of leeway? If I’m understand right, isn’t it League One and Two clubs for every £100 they make can spend 55 on their playing squad? But those relegated from the Championship can spend 65 for is it the first season they’re down that?

Kieran: “For the first season. That’s right. So it’s one of the world’s smallest parachutes, but it does help a wee bit. Oxford United had a wage bill of 8 million pounds in 22/23. That went up to 11 million pounds in 23/24. That would have included promotion bonuses. It went up to 21.5 million pounds in 24/25.

“To get that down to a level which is realistic. Oxford are likely to have a revenue of around about 9 million pounds, perhaps 10 if they’re lucky/

“So yeah, 50% of that going on player wages to go down from 21 million to 5 million, it can’t be done, unless the owners have the ability to find a load of money from somewhere and there’s no doubt that they’ve put money into the club, but being able to a commit to that level and and b to be able to prove to the EFL is is is really difficult.

“So my view I think the rules in their current format are count against a club which has just come down.

“Now people say, “Well, hold on. Leicester have just been relegated and they’ll have a much higher wage bill”, they have the ability to sell more players for bigger fees to contribute towards covering those costs.

“Now, you have to excuse my ignorance here. I don’t know the state of your squad. don’t know whether you got sailable inventory which you can sell back to the Championship or above or in Europe, which is going to help.

“But that seems sort of counterintuitive to football in the sense that we do want to have a half decent squad. We do want to look forward to the season with a degree of anticipation and excitement. And if you have to sell all of your decent players simply to go and satisfy some what are ultimately fairly arbitrary decided rules, I’m not sure that we’re heading in the right direction for football.”

Sam: “And can you also just confirm for us that if the ownership were to, you know, were to find or have investment of that the money that is needed for Oxford to have this embargo lifted. Is it right that we’re past the window when the embargo could be suspended? So it’s a fixed term. We have to now wait until January to then go and potentially make some additions.”

Kieran: “I that’s my understanding. Now I’m not a lawyer have have to be straight you know I’m just a jumped up teacher as um that’s the polite description given what one or two EFL owners have said about me historically.

“So yeah that would appear to be the case. So you would be operating the first half of the season with one hand tied behind your back and it’s frustrating again.”

Connor: “I just wanted to get an idea because salary cost management protocol came into effect in 25/26 and I’m just thinking for clubs such as Lincoln City who’ve got I think you alluded to them at the start of the podcast that they have some sort of financial trouble going on themselves.

“Is this a precursor and a warning shot from the EFL to not go over their own financial boundaries and go outside their own financial budget just in in the case in the instance that they what happens that they do get relegated which is what much of the wider football community expects and is this also something that a lot of other clubs in League One have to factor in themselves that the possibility that they do have such an outstanding season such as Lincoln where they’ve exceeded all expectations and they have to quickly readjust and they have to realign what their plan and what their financial spending is going to be in the next year in the Championship knowing that there is a genuine possibility that they could go down the next season back to League One?”

Kieran: “Yeah, I mean I think Lincoln City are one of the best run clubs in English football, and I was probably being a bit harsh on them because I was flipping from spreadsheet to spreadsheet. I think the challenge that they’ve got is that they’ve just been promoted on a relatively low budget and now they’ve got that awkward decision. Do they just take the money from the Championship because your TV money goes up from around about 2 million to 12 million? Did they just go and bank that and say, “Thanks very much. We’ll do… Rotherham sort of used to be this sort of yo-yo club between the Championship and League One for a few years, and now of course they’re no longer in that position.

“It’s a real challenge, I think, for for owners to try to get the culture right, and I appear on the Lincoln City podcast similar to yours on quite a regular basis and I’ve got a good relationship with them.

“Congratulations to them. Now you’re in this horrible situation where the average wages in the Championship are 14-15 grand a week, in League One probably around about two to two and a half.

“No disrespect. Lincoln City is Lincoln City, it’s not got the fan base of Derby or even Bolton uh Sheffield Wednesday if they come back up. So they’ve really got a challenging position and they are up against players who will be on 60 or 70 grand a week who were playing for West Ham last season.

“Some of those players will be on more because from what I understand not everybody’s got a relegation clause in their contract. So it’s really difficult I think for clubs in their position.

“As far as the salary cost management protocol rules, they have been in existence for a few years and they were sort of a bit rubbish in the sense that for quite a few years you could effectively buy your way out of both League Two and League One because it used to be for every 100 pounds that the owner put in you could spend a 100 pounds on players

“So, I won’t name names, but I don’t need to name names, we are fully aware of some clubs that bought themselves out of League Two and had a damn good effort of buying themselves out of League One as well. So, that’s where we are.

“I think the EFL has probably done the right thing in reducing it to only half of the owner’s money can be spent on player costs, but I don’t think that they’ve looked at it closely enough, for some clubs in the Championship that want to be able to offer a player a decent two or three year contract.

“I was talking to a chief executive of another club and he says, “What do you expect us to do if let’s say in season one we’re either let’s say we’re either 21st in the Championship or even perhaps worse we’re eighth or ninth and we got a chance of getting into the playoffs or we’re desperate to avoid relegation.” The manager sees this lad, thinks he’s quite tasty, offer him a two and a half year contract. Year one, he’s on what, 15 grand a week plus bonuses. If relegated, what can we then do?

“Because if you say to a player, you need to take an 80% pay cut, the player doesn’t come and you get relegated. If you gamble and the player doesn’t work out and you get relegated and the players, let’s said, yeah, they probably agreed to a 20% or you might get 20-25% pay pay reduction built into the contract, you’re still playing them 10 or 11 grand a week for the next two seasons.

“That player might not have anybody else coming in for him at that level wage and and you’re stuck with them and all of a sudden you’re in breach of the rules. So it’s really frustrating, I’m not being rude to Oxford United.

“You did spectacularly well to get to the Championship. And you did spectacularly well to stay in the Championship.

“I’m a Brighton fan. I remember when Brighton got promoted in 2003 and we were playing at the Withdean in front of six or 7,000. And you didn’t have the budget to compete and and the aim was to finish you know in in the top half of the bottom six if you know what I mean, just to avoid relegation and then you go down and that’s when the problems start and I think this is the issue here, and all of the upswing in terms of the progress that the club’s been made the club has made has now reversed.”

Connor: “Do you think then in our case that I’ve had this suspicion and I think a lot of fans have and it’s not bad it’s that we because there was a plan when this ownership came in and there was the previous in the there was the previous board there was Grant Ferguson and Tim Williams who I know that you that you have on regularly on your great podcast The Price is Football.

“Do you think that there is an element that the promotion that we had caught the leadership team at the club off guard with how quickly it happened because there was a plan that there would be within 3 to four years that was when we would be a Championship club. But in fact that happened in about year two?”

Kieran: No, I think they are grown-ups. I mean, I’ve had Tim on my show and I’ve got a huge respect for him, he then has to go to the board, he has to go to the owners and say this is our budget. This is what we want to spend. He will be fighting for that. They will be pushing back perhaps, but I think that you know they were on a decent budget. I think the budgets were higher than I’d anticipated. I’ll be honest. So I think the senior management team deserves some credit there.

“But the way that the rules are I think the aim was to try to avoid relegation. You know, you know what happened yourself in terms of the management changes. If the club had decided that Oxford United, we’re going to accept we’re going to be relegated from October onwards, you wouldn’t have had all the changes that we saw last season.

“So, I don’t think they were caught on the on the hop. It was they managed to get a half decent budget. Even with a half decent budget, it’s still an absolute nightmare division, you know, you’re losing… you take a look at the other clubs.

“I’m saying you Oxford United lost what 157 million pounds. Those are low losses by Championship standards. And I know of some other clubs where wages have not been paid on when they were due at the end of the month. Won’t name those clubs. Not fair to do so. But I was having a chat with an executive from a club and he says, ‘You’ve got no idea of the stress that we have. It’s not just for us. It’s the fact that I can be three days before payroll. We’re a million pounds short on this month’s payroll. And we’re phoning the owner and he’s not picking up the phone.’

“Does this mean he’s not going to pay the wages? Does it mean that he’s got distractions because he’s successful elsewhere? A lot of the time the owners are based overseas. what happens if the football club isn’t the priority to him that it is to everybody that supports that club. And I think as fans, you a lot of that goes above our heads.

“But it is a very very scary and a very very precarious industry in which they’re operating. And of course that they’re dealing with the hopes, the aspirations, the identity, the sense of belonging that only a football club can bring to the local community.”

Sam: It did seem to me like what the EFL have done is taken the situation a lot of clubs find themselves when they go up to the Premier League and then go right back down and then you know obviously the EFL had their own their own financial rules for for those clubs and they’ve just extended that to the rest of of of the EFL.

“In terms of, you know, you mentioned a couple of times your infamous spreadsheets and I know, you know, when club accounts come out, you kind of are monitoring this, you know, certain clubs you’ve got an eye on.

“When it comes to Oxford United, did this situation come out of nowhere or had there been over a couple of, you know, months perhaps been building warning signs?”

Kieran: “Well, I mean, I only get the annual accounts, so therefore, I’m always looking in the rear view mirror. So the last set of accounts we’ve got are the season 24/25. I don’t think the accounts are actually bad. I think the challenge is that the rules are so strict that they don’t really allow a club that’s just been relegated to have that degree of flexibility.

“I think the criteria for which you can breach the rules are are set at too high a bar or too low a bar which means that it can trip a club up and therefore through in my view no fault of the people involved the owners will say well this is the amount of money but if I can put £100 into a club and only 50 is going towards covering the wage costs under the rules, I go, well, you know, that counts against me or I appreciate it’s 65% for the relegated club, but even so, it’s still very challenging, and you can be what we often refer to as asset rich, cash poor, in the sense that having wealth is one thing.

“You know, some of us have got houses, some of us have got other things which have value, but doesn’t necessarily mean that you can go and cash those in straight away because if I cash in my house, I ain’t got anywhere to live. And and that’s the type of challenge that we face.”

Connor: “Kieran, will you know what the best case scenario is for Oxford United? The best way that we see it, the best case scenario is that everything will get sorted by the time that the January window comes around and we’ll be able to start purchasing players and start registering again.

“I don’t want to scare or fear among our Oxford fans, but on the other end of the spectrum, what is the worst case scenario if it gets to past January and we’re still in the same situation that we’re in today?”

Kieran: “Well it comes down to the owners. It comes down to whether the EFL are going to show a bit of flexibility. And we did see with Sheffield Wednesday going into administration and there was a genuine fear that they could start next season with a with a 15-point deduction in League One that the EFL does have the capacity to take a look at the bigger picture, you know, if you take a look at the three clubs that have been relegated this this season, Sheffield Wednesday had a points deduction for a breach of financial rules. Leicester City had a point seduction for a breach of financial rules and Oxford United are starting next season with a transfer embargo, i.e. effectively.

“Does that not say more about the rules than it does about because you know, I don’t think that all three clubs have got bad owners. Sheffield Wednesday did. I’ll quite happily say that.

“Leicester’s owners, Leicester City were the Premier League champions 10 years ago. They were in the quarter-final of the Champions League nine and a half years ago, so it is a really tough tough business and I don’t think they got the balance right as far as the application of the rules.

“I understand this concept of sustainability and wanting to reduce losses, but I’m not sure we’re necessarily going about it the right way.

“Having said that, if I had a magic wand, could I make things better for every solution that creates a new problem? I’m fully aware of that.

“But I think that there are things that could be done to improve the lot of football.”

Connor: “The question that I think that a lot of fans will have at the back of their minds. So I’m sure as you’re fully aware we have a new stadium that is on the horizon.

“At the moment the figures running around have been rising. When it was originally planned it was at around 100 million and now you know other things happen in the world.

“So you know the price of the price of metals has gone up. The price of materials has gone up. So the last report was looking at around 150 million, but we’ve been told that what’s happening at the moment won’t impact the financing of the stadium build, but would it have an impact on the rates banks are willing to give us as they’re aware of the issues that we have at the moment? Meaning that it could actually exceed what the last valuation of the construction would be.”

Kieran: “Well, I think you’ve you’ve got to look at how the stadium is going to be funded. I’ll have to plead ignorance here that I don’t have that knowledge.

“I would be surprised if a traditional bank would lend money to a football club to build a new stadium. When banks lend money, they do a risk assessment. They do a credit check. And if you’ve got a business which is losing £300,000 a week plus for the last two years in an industry which is emotional.

“I once did an investigation into a football club on behalf of a bank and my recommendation to the bank was you got a real problem here. The board wouldn’t listen to common sense and I’d written a report and this is going back a long way. This is going pre-mobile phone days. You know, I’ve been in teaching for a long long time, but before that, I used to do a bit of this accounting nonsense.

“And I remember phoning up on a landline the the bank manager and says, ‘Well, you know, I can’t can’t persuade the owners and the board to do anything, which I consider that they need to do, I’ve written a report. I’ve recommend that you put the club into administration or similar’, and then the phone went silent for a few seconds and the bank manager said, ‘Any chance you could bring the report over and we have a chat about it’ and I thought that sounds a bit strange.

“He said, ‘Yeah, sure. Do you want to come to my offices? Do you want me to go to your office?’ He said, ‘I any chance I can meet you down the pub?’ And I’m going, ‘This is a bit different.’ Went down the pub and he was perfectly candid. He said, ‘Okay, we’ve got two big problems here, a load of my customers support this football club. If I put this football club into administration, they’re going to take their they’re going to take their custom to Barclays, NatWest, TSB, whoever it’s going to be. They’re going to take their money. So, I’m going to lose loads of other customers.

“‘Secondly, I support the club, which isn’t an issue. I’m a professional, but my kids are seven and nine. They go to the local school. If their Dad is the bank manager who puts the local football club into administration, we’re gonna have to move town because they’re they’re going to get teased. They’re going to get bullied and so on.’

“And we managed to work out a solution whereby we walked we phoned up the football club. We said, ‘We’re coming across with the report and we’re going to play good cop, bad cop.’ And I went in and said, ‘Look, I’m recommending you put in the administration.’ and the bank manager saying, ‘I don’t really want to do this. Don’t want to do this, but you know, this guy here, he started calling me words, which I don’t know whether this is a family shows or repeat this piece of work.’ You know, and I’ve got to go and show this to my regional manager. And what we managed to do was to persuade the club to sell a couple of players, which reduced the amount of the bank debt and and they managed to to muddle their way through. And it was very much a muddle, they’ve just been relegated from the top division and so on, so banks now say given that we suffer repetitional risk and we suffer for potential financial risk why lend money to the football clubs in the first place.

“So that would be my concern. I’m a Brighton fan. When Brighton had this idea for a football stadium to return to Brighton after they played at Gillingham, I did the sums at the time. I said it doesn’t work, you know, for and at the time I think they were aiming for a 20,000 capacity. I’ve done the sums. I know much if they’re going to borrow this is the interest rates involved. I just can’t see it working.

“So whether the cost is 100 or 150 million pounds, my concern would be where’s the money coming from? And I don’t think you’re going to. I think you will struggle to find Mr. Tompkins at the local branch of Lloyds saying, ‘Yeah, come on, lads. Yeah, yeah, we’ll give it to you.’ The numbers don’t work out.

“Football’s a really stupid industry. You’re paying interest on that loan 365 days a year. You got 23 home games in which to cover it? It doesn’t make sense. So, are the owners going to put money in themselves in the form of new shares? Are the owners going to give the club an interest free loan or a very very low interest loan? I think those would be the considerations there. So I know nothing. You know, I’ve got no special hotline to Tim or to anybody else. But for me, I just don’t see how bank lending would work.

“So therefore, I don’t see relegation as being a downside of this, the owners have either got the money or they’ve got the money ring fenced for future reference and ideally we go for from there and my own observation and you will have been to some of the newer stadiums as well. It tends to be build it and they will come. You look at all of the new grounds when Derby moved from the old Pride Park to the new new Pride Park. They sell out most weeks. You’ve got good facilities. Commentary City of course has been promoted to the Premier League again with a relatively new stadium. I’m a Brighton fan. New stadium. They’re in, you know, last you want to hear is they’re in the Premier League as well.

“So there can be a positive from this. At the same time, there’s only 20 clubs that can be in the Premier League and there’s only 24 clubs that can be in the Championship at any one time. So it’s not necessarily a case of everybody build a new stadium and all the problems are solved, but having a multi-function stadium which is generating revenue on far more days than 23 home games a season is the way forward.

“But as you rightly pointed out we’re living in a world in which material costs have gone up, labor costs have gone up, labor taxes have gone up. That’s not Labor party taxes of employment taxes gone up and overheads in the form of insurance, heat and light, it’s a horrible time to be involved in a big real estate capital expenditure project of this magnitude.”

Sam: So I just wanted to cap off a couple of final player related stuff, because you mentioned obviously what the ramifications could be if this is not sorted by January, but presuming that this affects, we heard today from Jerome Sale that it’s not just that we can’t have free transfers, we can’t get loans, we can’t offer players new contracts.

“From your understanding, within Oxford United we had a players playing squad last season and there were members of it that either were not picked in the case of Greg Leigh or we had players out on loan if they are able to feature because you know we’ve heard that Frankie Kent our new signing isn’t registered. He’s not going to be able to be because of a window that has passed to get him involved. And there was some confusion within the fanbase as kind of to what degree those already contracted at the club but were not involved last season will be affected.”

Kieran: “Well, if you have signed a contract and your registration is lodged with the EFL and the Football Association, you’re allowed to play football. Otherwise, it’s restraint of trade. Yeah, they’re a player that didn’t feature last year, but he’s gone a two-year deal. I don’t see that being a problem at all.”

Sam: On the potential eventuality of a emergency loan specifically for goalkeepers because at the minute, we’ve got Jamie Cummings, our number one. We sold our number two to West Brom. Simon Eastwood who is 37, is a player-coach and then we’ve got two youth team players. Presuming this embargo would also impact the ability for the club to get an emergency loan or would it be a case of an appeal would have to be kind of lodged with the EFL for special dispensation?”

Kieran: “Again, I think that’s more sort of football law rather than football finance. The EFL are not out to get Oxford United and they fully understand the unique position of a goalkeeper. So I think there will be some form of solution to that should it arise is my gut reaction. But I’m doing that from, I’m on reasonably good terms with the EFL. Got to know them. They’re bigger football fans than you realise.”

Sam: “And there there’s a while you were speaking about kind of obviously the situation with the new rules and that kind of thing, something sprung into my mind that obviously these new rules like you said been in place for a couple of years. Obviously in the time since then we’ve had the independent football regulator come into place and I wondered from the knowledge you have like you say speaking to people within the EFL if cuz you know certainly from a fans point of view and I’m sure you know it can seem sometimes the same in the Premier League with Brighton. It seems that the leagues are rushing to get rules in place so they don’t have it imposed by the regulator.”

Kieran:<.strong> I mean my understanding with the regulator is that they want to set up a licensing system to try to ensure the sustainability of the game and they want to work with leagues and with clubs. Yeah, my personal view on the regulator is it’s the least bad option that we have. And the regulator was easily avoidable. All that it needed was the Premier League to offer a wee bit more money to the EFL. The EFL would have fallen in line. The Premier League don’t trust the EFL. They think that Rick Parry will trigger the back stop appeal, even if they are giving even if they do give an offer to the clubs in the EFL.

“The EFL said, ‘Well, if we signed a deal, we’ve signed a deal.’ But there’s such a lack of trust between the organisations. Nobody’s able to get a deal out of the line. The regulator wants football to solve its own problems. But it says we do have a big stick which we will get out if you don’t make some progress.

“Equally, if we take a look at what has happened in League One, and and I do have some sympathy for some clubs in terms of tightening up the rules, the average losses in League One have gone from around about 2 million pounds a year four or five years ago, certainly just before just before COVID. 2 million pounds a year is still a lot of money, but they’ve trebled to between six and seven million pounds a year.

“Now, there’s been some spectacular losses included in that. Birmingham City were promoted 24/25 on the back of losing 39 million pounds.

“Wrexham lost a fortune which I appreciate goes against the narrative of the great underdog story.and that’s not a dig at Wrexham. What they’ve done is absolutely magnificent in many ways and I’m sure many football club fans would just wish that Rob and Ryan had rocked up at their club instead of that of Wrexham. They were alleged to have turned up at Hartlepool and were told where to go but I don’t know the validity of that story.

“So because of the increased losses, we do have these much harsher rules, but I don’t think that they’ve been thought through for those clubs that have just been relegated. Yes, there’s a bit more leeway, but it ignores the fact that you’ve got existing financial commitments in your payroll, and that’s nothing really to do with IFR.”

Sam: “Well, that the fact that and like you say, they were so slap dash, correct me if that’s not the right term to use, but when you mentioned that I did think I wonder if it was a case that the EFL were kind of thought that an the IFR would bring in that kind of regulation or rule. And so they kind of before it was imposed on they thought let’s kind of put one together and end up being a bit um a bit lacklustre as you’ve mentioned.”