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Home » Premier League Offers EFL £30m-A-Year Sweetener To Seal Football ‘New Deal’

Premier League Offers EFL £30m-A-Year Sweetener To Seal Football ‘New Deal’

The Premier League has offered a £30m-a-year sweetener to the rest of English football’s professional pyramid in an attempt to thrash out a deal over the sport’s future funding.

Sky News has learnt that the top flight told the English Football League (EFL) last week it was prepared to hand over £125m extra every year, up from the £95m-per-season it proposed in December.

If agreed, this new funding would be in addition to existing financial contributions totalling hundreds of millions of pounds a year made by the Premier League to the EFL.

The revised proposal, tabled during a meeting of Premier League and EFL executives, follows months of talks about a so-called ‘New Deal for Football’.

Any agreement between the two – with the Football Association also involved in the discussions – would include strict conditions on cost controls to avert future profligacy from lower-league clubs.

This could mean more of the money distributed by the Premier League being spent on items other than players’ wages, such as infrastructure.

It would also entail reforming the current system of parachute payments made by the top flight to clubs relegated to the Championship.

A new distribution model would also be introduced, with merit payments being awarded to clubs based on their performance in the EFL.

The latest phase of negotiations come as the prospect of a new independent football regulator looms, following the publication last month of a white paper on the sport’s governance.

In it, the government said: “The current distribution of revenue is not sufficient, contributing to problems of financial unsustainability and having a destabilising effect on the football pyramid.

“Therefore, there remains a clear need to reform financial distributions in English football.”

The white paper highlighted a £4bn chasm between the combined revenues of Premier League clubs and those of Championship clubs in the 2020-21 season.

“There remains a clear need for football to reassess both the magnitude of revenue distributions and the way in which money is allocated between teams,” it said.

“The current approach has affected competitiveness and led to financial risk-taking by clubs – the persisting revenue disparities encourage clubs to take financial gambles in an attempt to achieve promotion or avoid relegation.

“This is accentuated by parachute payments, which can distort competition in the Championship and encourage greater financial risk-taking by clubs that are not in receipt of them.”

It was unclear on Tuesday whether the Premier League’s latest proposal would gain support from the EFL board, which is led by chairman Rick Parry and Trevor Birch, chief executive.

The £125m-a-year proposed by the top flight would be in addition to the current system of ‘solidarity payments’ it makes to Championship and other EFL clubs – currently totalling £110m-a-year.

Excluding teams which are in receipt of parachute payments, each Championship club receives £4.8m this season, while those in League One and League Two get £720,000 and £480,000 respectively.

Meanwhile, clubs which have been relegated from the Premier League get £44m in their first season in the Championship, £36m in year two and £16m the season after.

During the Premier League’s current three-year domestic broadcast rights deal, £1.6bn is being distributed by the top flight, encompassing payments to the EFL as well as other football-related initiatives such as a new defibrillator fund.

That £1.6bn figure includes a one-off uplift of £100m resulting from the government allowing the Premier League to agree its new broadcast deal without the usual tender process because of the pandemic.

During the COVID-19 crisis, the Premier League established a £50m fund for League One and Two clubs, while it provided a further financial commitment to assist the EFL in securing a £200m loan facility that Championship clubs were able to utilise on an interest-free basis.

Rick Parry, the EFL chairman, was recently quoted as saying: “We’ve always said we will accept wage control and that is a red herring to suggest we wouldn’t. It would be nonsensical [not to].”

Spokesmen for both the Premier League and EFL said discussions about the ‘New Deal’ were ongoing.