Premier League given Government warning over ‘fairer distribution of money’ down football pyramid

The Premier League has been warned that the UK Government could hasten setting up an independent regulator if an agreement is not reached soon with the English Football League about fairer distribution of money to clubs further down the pyramid.

The Premier League and EFL have been locked in lengthy talks regarding how much and how more of the top-flight’s billions of pounds in revenue can be shared with lower-division clubs but they are yet to find a resolution.

There remains regular dialogue between the Premier League, the EFL and the Football Association on the subject and the stakeholders are keen to ensure a robust new distribution system is in place. Sources insist that it is a complex process and that a lot of work is going into getting the mechanics right.

The EFL is pushing for Premier League and lower-division TV revenues to be pooled together and split at a certain percentage, with cost controls put in place to ensure the funding is not spent only on transfers and wages, exacerbating existing problems, and parachute payments stopped altogether.

EFL clubs see these negotiations as a once-in-a-generation opportunity to address systemic financial issues in the game and that closing the £4bn revenue gap between the Premier League and the entire EFL is crucial to protecting the future of English football.

Some in football are unsure if the game’s stakeholders can reach an agreement and feel government intervention by way of an independent regulator will be necessary.

“It’s in the best interests of all involved to get this sorted quickly,” Dame Caroline Dinenage MP, chair of the Culture, Media and Sport Committee, said. “If the stalemate continues, the Government should step in to ensure the planned independent regulator is in place with the legal powers to impose a deal to safeguard clubs for the future and ensure the long-term financial stability of the national game.

“Unless the football authorities get their act together soon on agreeing a fairer share of revenue down the pyramid, we risk more clubs collapsing, with the devastating impact that can have on communities.”

EFL chairman Rick Parry has been calling for several years to abolish the parachute payment system – whereby clubs relegated from the Premier League are handed tens of millions of pounds for up to three years – which he described as “an evil that needs to be eradicated”. But the parties have been unable to reach an agreement on the details of a new distribution model.

A new report, conducted by the CMS Committee, on football governance has recommended that an independent regulator for English football be set up by the end of the year in “shadow form”, meaning it can start preparatory work while it awaits legalisation to grant it powers.

The report calls for the UK Government to ensure legislation required to give the regulator statutory powers are included in the King’s Speech – due this autumn – and that legislation is passed in the present Parliament.

However, the process could be accelerated should the Premier League and EFL fail to come to an agreement on the distribution of money throughout the pyramid, the report warns, with recommendations that the Government ensures the regulator has the legal powers to impose a deal on English football’s leagues.

The CMS Committee is also pressing for football’s new independent regulator to have powers to enforce change in other areas it believes the game’s current stakeholders are failing to adequately govern.

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