The Premier League and the English Football League (EFL) are being urged by lawmakers to promptly agree on distributing more revenue down to lower-tier clubs. Otherwise, they face the possibility of an externally imposed settlement.
The Culture, Media and Sport Select Committee’s report states that should the leagues fail to reach a funding agreement soon, the government should expedite the establishment of an independent football regulator to enforce a deal.
The lawmakers are advocating for a larger, strategic disbursement of funds from all leagues to grassroots football in an effort to ensure the game’s long-term stability.
Chair Dame Caroline Dinenage MP warned of the consequences of inaction: “Should the football authorities not promptly reach a fairer revenue-sharing agreement, we run the risk of more clubs failing, which could have disastrous effects on local communities.” She stressed the need to resolve the issue swiftly for the benefit of all parties involved.
Earlier in February, the committee scrutinized the Premier League and EFL’s discussions over a new funding settlement.
The government has confirmed the plan for a regulator, which was suggested by a fan-led review. This body aims to ensure fair distribution of Premier League money to lower leagues, prevent club insolvencies, increase fan participation, and introduce a stricter owners’ and directors’ test.
One of the proposals being considered is to pool the broadcast revenues of both leagues, but the issue of parachute payments to clubs relegated from the Premier League has been a bone of contention between the two organizations.
The regulator would possess ‘backstop’ powers to enforce a new financial settlement if consensus cannot be reached, which would effectively compel the Premier League to distribute more money to the lower tiers.
Rick Parry, the EFL Chairman, proposes a 25% share of the pooled broadcast revenue with the Premier League, merit-based payments across all four divisions, and the termination of parachute payments for teams relegated from the Premier League. He expressed his disappointment with the Premier League’s stance on the payments in April.
Parachute payments, designed to help relegated clubs adjust to lower income, are viewed by the Premier League as a means to help clubs remain competitive once promoted. However, critics argue that these payments contribute to ‘yo-yo’ clubs and create financial disparity among Championship teams.
The Premier League noted that it already gives away 15% of its revenue. Additionally, it provided a £250m relief package in 2020 to assist EFL clubs with financial challenges due to the Covid-19 pandemic.
Sports Minister Stuart Andrew MP expressed optimism about the ongoing negotiations between the Premier League and EFL. He urged both parties to reach an agreement as soon as possible to avoid additional financial instability in the sport.
Both the Premier League and EFL refrained from commenting.
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Frequently Asked Questions (FAQs) about Premier League-EFL revenue deal
What are lawmakers urging the Premier League and English Football League (EFL) to do?
Lawmakers are urging the Premier League and the English Football League (EFL) to quickly agree on a fairer system for distributing more revenue down to lower-tier clubs. If they fail to do so, they risk having an external settlement imposed on them by an independent regulator.
What is the role of the proposed independent football regulator?
The independent football regulator, proposed in the fan-led review and confirmed by the government, aims to ensure the fair distribution of Premier League funds to lower leagues, prevent clubs from going out of business, increase fan involvement, and introduce a stricter owners’ and directors’ test.
What is EFL Chairman Rick Parry’s proposal?
EFL Chairman Rick Parry proposes that the EFL should have a 25% share of the pooled broadcast revenue with the Premier League, merit-based payments should be distributed across all four divisions, and parachute payments for teams relegated from the Premier League should be abolished.
What are parachute payments?
Parachute payments are funds given to help clubs relegated from the Premier League adjust to lower revenues. The Premier League views them as a way to keep clubs competitive after promotion, while critics argue that they contribute to ‘yo-yo’ clubs and create financial disparity among teams in the Championship.
What has the Premier League done to support clubs financially during the Covid-19 pandemic?
In 2020, the Premier League provided a £250m relief package to aid EFL clubs facing financial challenges due to the Covid-19 pandemic. Furthermore, the Premier League has pointed out that it already gives away 15% of its revenue to other entities.