Sheffield United transfer embargo explained amid points, Ndiaye and takeover fears

Sheffield United fans have woken up this morning to news that their side has been placed under a transfer embargo, according to the English Football League’s own transparency guidelines.

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The embargo reporting service of the league reports that United have breached EFL guideline 52.2.3, which concerns the default of payments to another club “under a transfer or compensation arrangement”.

But what does this mean for United, in the middle of a transfer window, and what may the wider-reaching consequences be? We spoke to football finance expert Kieran Maguire, author of the Price of Football book and a lecturer at Liverpool University, for some insight...

What is an embargo?

Put simply, a transfer embargo prevents clubs from strengthening their teams or adding to their existing costs until they have met their financial obligations, or rectify the breach of EFL regulations that saw them placed under an embargo in the first place.

So in this example of United apparently defaulting on payments to other clubs, the EFL seems to be effectively blocking them from spending any more money until they have paid their outstanding dues.

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“If a club is late paying a transfer instalment, the selling club first of all asks the buying club, ie Sheffield United,” Maguire told The Star. “If they don’t get a response they go to the league, who then request the club paying and say: ‘If you fail to do so, we’ll put you on the naighty step.’

“Sometimes it’s a mistake or a genuine reason as far as the EFL are concerned. They’ve had a bit of a warning and have either been unable or chose not to comply with it and now they’ve gone on the embargo service.

“As soon as the payment is made, the embargo will be lifted. All Sheffield United have to do is pay the right amount of money to the other club and then the embargo will be lifted.”

So no club can sign players during an embargo?

There are ways embargoed clubs can add to their playing squads, but EFL regulations suggest that is only in specific circumstances; for example, if they don’t have enough players to fulfil their fixtures, or the integrity of the competiton is in jeapordy. That has been seen at other clubs but with the depth of United’s squad, would not appear to apply here.

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Clubs under embargo are allowed to do something called ‘staffing up’ , to ensure they have 23 players of what the EFL calls ‘professional standing’ in their squad. To reach that threshold players must have played one professional game, for any club, excluding in the EFL Trophy. So most of United’s squad - even the likes of youngsters Sai Sachdev and Andre Brooks - would count as being of ‘professional standing’.

How have United ended up here?

Although the exact reasons behind the embargo have not been released, United are understood to still be paying transfer fees for a number of big-money signings - which is completely common in the footballing world - that they have made in the last few years. Clubs routinely pay in instalments to manage cashflow, with Sander Berge’s £22m move from Genk understood to be one deal United scheduled in that manner.

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“It has been linked to cashflow [when this has happened in the past to other clubs],” Maguire said. “It has also historically been associated with a potential change of ownership. It could be that the existing owners have said: ‘We want the deal to go through and by the way, the first thing you’re going to have to do is to pay an instalment in relation to Player X.’

“Sometimes takeovers drag on and you can understand from the perspective of the existing owner, they don’t want the money to go out. They feel the new owners are effectively obliged to pay it. But that is speculation. It could be cashflow.”

How will this affect United’s January plans?

The embargo isn’t a total block on signings, full stop - the league say that embargoed clubs aren’t permitted to add to their squads, with the tantalising caveat “without the prior written consent of the league, until such time as the agreement is honoured”.

So any deals have to have the backing of the EFL. Quite how that is policed and what the criteria is, is not immediately clear, although Maguire suggested this morning that it is more linked to the point above about making sure clubs have enough senior players to make sure they don’t have to field U18 sides to fulfil fixtures.

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But United’s hopes of signing a forward this window looked precarious anyway, considering the club’s financial position. Reda Khadra’s loan termination earlier this month left them light up front, but any replacement depends entirely on getting as good a deal as Brighton agreed to when the German U21 international came to Bramall Lane.

Does that mean Iliman Ndiaye won’t be sold?

Not necessarily. A transfer embargo only restricts the registration - ie, the signing - of players, not the selling of them. To prevent embargoed clubs selling players would seem counterproductive anyway, considering that for many may be the only way to raise the funds necessary to get out of it.

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United’s stance on the Senegal international remains firm, with boss Paul Heckingbottom advising the board that selling the youngster now would make no sense in terms of their overall promotion plan.

Could there be a points deduction?

It’s never happened before in terms of this sort of situation but it’s an understandable worry for Blades fans, considering their team’s place in the league. But it’s understood that in this instance, embargoes are the go-to ‘punishment’ rather than any on-field sanction such as points deductions - which are usually reserved for breaches of profit and sustainability rules.

Does this affect the takeover?

It’s difficult to say for sure but it may add another layer of complexity to the ongoing takeover deal. The outstanding amount will have to be paid by someone for United’s embargo to be lifted - will that be the present owner, Prince Abdullah, or the prospective new owner, as and when they assume control of Bramall Lane?

What is for sure is that the prospective new owner will be fully aware of United’s financial obligations, having been granted full access to the club’s books after negotiations reached a certain stage.

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“Once you’ve agreed heads of terms, which is the equivalent of exchanging contracts on the house, you then get the opportunity to have the equivalent of a house survey and go through what you’ll be acquiring, the stadium and the training ground and any machinery,” Maguire added.

“You get a list of the assets and obligations, any outstanding amounts for VAT and loans, you get access to the full list and it does have an impact on the price. If you were buying a house and the survey said it had dry rot, you’d try and knock a few grand off the price because that’s what it’d cost to get fixed. Everyone needs complete transparency in terms of the deal, and that’s why they sometimes drag on.”

What about new contracts?

With so many players out of contract this summer - including key men such as Ollie Norwood, Wes Foderingham and Oli McBurnie - it’s another area of understandable concern for Blades fans.

The EFL say that clubs under embargo can still offer new contracts to existing players, but with the caveat: “This will be dependent upon the circumstances of the individual club and will be determined by the league.”

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What have United said?

The club have not yet publically commented on the news which broke overnight, but boss Paul Heckingbottom told the media earlier this week that he “would not settle” in his search for a replacement for Khadra and that there had been no “lack of clarity” in what he can do in the transfer market this month.

“I know what we can do, but it has to come in on budget,” he said. “The clarity is there and there are umpteen players out there. We’ve got to find one who we think is going to help us and who we can afford. If we can’t, we can’t.

“But there’s no lack of clarity there, we know what we’re looking for. There are players there but we’re not going to settle; we’ll keep looking and keep working.”