Aston Villa, Derby County and Sheffield Wednesday all facing sanctions as big clubs join Birmingham City in the dock after Blues’ nine-point penalty

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Aston Villa, Derby County and Sheffield Wednesday are among the clubs who now face sanctions for breaches of financial regulations after Birmingham City were hit with a nine-point deduction.

Birmingham are the first club to be punished for breaking the profit and sustainability rules introduced by the English Football League in March 2017 and the decision sets a precedent that could lead to major problems for a number of other sides.

Garry Monk's Birmingham dropped from 13th to 18th in the Championship and within five points of the relegation zone after a decision that sent shockwaves through the division.

Aston Villa are among the clubs who now face sanctions for breaches of financial regulations 

Birmingham are the first club to be punished for breaking the profit and sustainability rule

Clubs have submitted their three-yearly reports in recent weeks, which include two years of accounts under the new financial rules and a projection for the third year. 

Sources have told Sportsmail that Villa, Derby and Wednesday are prominent among those who could come under serious scrutiny.

'What has happened with Birmingham has opened a Pandora's box and a lot of clubs are now worried,' said an official from one Championship club.

An EFL meeting at Nottingham Forest earlier this week descended into an 'inter-club war', with executives arguing over a change of financial regulations amid serious concerns some big players were now in trouble. One prominent club owner actually turned on Villa, Derby and Wednesday.

Derby are suffering major losses but Mel Morris could resolve the situation by selling the club

It is understood these concerns, more than the £595million, five-year Sky TV deal, contributed to the imminent departure of Shaun Harvey as EFL chief executive.

While the clubs declined to comment on Friday, privately insiders insist they will not be found to have breached financial fair play rules. But that will be a matter for interpretation.

Clubs may argue they can allocate certain costs, but the EFL may not accept their explanation and Villa could have to explain losses believed to total as much as £60million.

When Nassef Sawiris and Wes Edens took a controlling stake in Villa last year, they were warned that drastic action was needed to avoid issues with profit and sustainability regulations. 

One solution would have been to sell Jack Grealish, and it could now be that they have to take such an option even if a number of their players are out of contract this summer.

It was reported last year that Sheffield Wednesday needed to 'balance the books'

It was reported last year that Wednesday, after three years of unprecedented financial backing from their owners, needed to 'balance the books' to 'avoid breaching' the rules that state a club cannot exceed losses of £39m, or £13m a season, over a three-year period.

Derby are suffering major monthly losses but owner Mel Morris could resolve the situation by selling the club.

A source told Sportsmail: 'There were heated exchanges at Forest this week. The bigger clubs want change, for obvious reasons, but understandably the smaller clubs who are operating within the rules are less than sympathetic.'

Clubs chasing promotion also understand that they will not be protected should they make it to the Premier League. A points deduction could be applied in the top flight next season. The cut off for sanctions this season is March 28.

Birmingham faced a disciplinary commission on Monday and an independent panel sided with the EFL who argued for a 12-point deduction. Birmingham argued seven would have been more appropriate.

January's accounts detailed a loss of £37.5million in the 12 months to the end of June 2018, in part due to an increase in wages from £22m to £38m under Gianfranco Zola and Harry Redknapp. Birmingham and the EFL have 14 days to appeal.