In a recent meeting held in London, Premier League clubs failed to offer increased funding for the English Football League (EFL), leading to a state of uncertainty regarding financial arrangements.
Anticipation of a decision on increased funding for the EFL prior to the meeting was not met, as no concrete offer was presented during discussions. Instead, top-flight clubs determined it was necessary to first establish a new financial system to replace the existing profitability and sustainability rules (PSR).
The proposed six-year deal, which aimed to allocate 14.75% of net media revenue from the Premier League to the EFL, equivalent to approximately £900 million, was not given priority. The Premier League clubs are now focused on finalizing an agreement for their own financial model before engaging in discussions with the EFL.
In response, the government has urged football authorities to independently establish a new financial settlement, with possible ‘backstop’ powers granted to a new independent regulator if an agreement cannot be reached.
According to a spokesperson for the Premier League, clubs have committed to prioritizing the swift development and implementation of a new league-wide financial system. This move is intended to provide clarity for clubs regarding their future financial plans and ensure sustained investments across all levels of the sport.
The commitment to securing a sustainably-funded financial agreement with the EFL is pending formal approval of the new financial system by clubs. Additionally, the Premier League restated its ongoing commitment to distributing £1.6 billion to various levels of football over the current three-year period.
The EFL’s response to this decision has not yet been made public, and it is expected that the matter will be addressed at an upcoming board meeting.
The situation surrounding the failure to reach a decision has been deemed “absolutely shambolic” by a source familiar with the government’s stance. The Department for Digital, Culture, Media, and Sport (DCMS) has been approached for comment but has not provided a statement.
Regarding the financial model being considered, the Premier League is examining a system that aligns more closely with the squad cost to revenue ratio outlined in UEFA’s Financial Sustainability Regulations (FSR). These regulations are set to place a limit on clubs participating in European competitions, preventing them from spending more than 70% of their revenue on transfer fees and player wages.
It is important to acknowledge that there is no guarantee that the new financial model will be approved at the league’s annual general meeting in June, further adding to the uncertainty of the situation.
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