The Government’s response to the fan-led review could be the catalyst to ending the impasse between the Premier League and the EFL on financial distribution from the top flight, EFL chairman Rick Parry believes.
The response to the report published last November is expected before the end of the month, with an independent regulator for English football set to be endorsed within the response.
The fan-led review, promised in the Conservatives’ 2019 General Election manifesto, was brought forward in the wake of the Super League launch a year ago.
Whether the Government endorses every recommendation of the fan-led review remains to be seen, but Parry hopes it will have the effect of creating the “external pressure” needed to break the deadlock in discussions on how money from the Premier League is distributed down the pyramid.
The EFL is looking to sell broadcasting rights jointly with the Premier League and secure a 25 per cent split of the revenue, and abolish parachute payments in the process.
Parry told the PA news agency: “We haven’t got very far in discussions with the Premier League. But then that’s not entirely surprising.
“We’re still making our case and looking forward to the response to the fan-led review because we think that’s going to be the catalyst for real movement.”
The fan-led review, chaired by Conservative MP Tracey Crouch, recommended that if the leagues had not reached an agreement by the end of 2021 they should seek external advice to resolve it.
That has not happened, with Parry insisting it would not make much difference.
Premier League chief executive Richard Masters has previously said it would be “a disaster” if the EFL took 25 per cent of broadcast revenues, but Parry remains convinced it is a reasonable and fair request.
“We believe if you address the cliff edges properly, you don’t need parachute payments. You don’t need a parachute to fall off a step,” he said.
“What the redistribution (of parachute payments) does is make clubs solvent. At League One and League Two level it pretty much eliminates losses, and eliminates a lot of the losses within the Championship.
“And if we haven’t got a group of clubs on £44million (revenues) while others are earning £4m, it makes the Championship even more competitive. I think the Championship is phenomenally competitive, but it makes it more rational.”
Research published last month by Sheffield Hallam University found Championship clubs in receipt of parachute payments were three times more likely to be promoted in the period between 2017 and 2021. Two clubs in receipt of parachute payments this season – Fulham and Bournemouth – occupy the top two positions and are on course to return to the Premier League.
Parry accepts, though, that with a greater share of revenue must come better regulation of EFL clubs.
“There’s no point in just distributing money if it just goes to inflate wages and transfer fees,” he added.
The EFL endorses the fan-led review, but Parry welcomes further debate around the detail in the coming weeks.
He added: “We do think it should be light-touch regulation, we do think there needs to be a discussion about which rules sit where, because we do believe it’s entirely appropriate for rules on, for example, financial fair play and cost restrictions to be in the competition rules rather than sitting with a regulator.”
Parry was speaking at the EFL’s Community Awards event at the House of Commons in central London.
He lauded the role played by EFL clubs in their communities, and said: “We have an extraordinary reach and we’ve seen during the pandemic how close the bond is between club and supporters. This shows how hard clubs work on their responsibilities.
“It’s a fundamental part of the Government’s levelling-up agenda, pride of place and recognising our role in the community, we think we fit into that agenda pretty much perfectly.”
It is understood the Premier League has committed £1.6billion to the wider game over the next three seasons.
A Premier League spokesperson said: “The Premier League and the EFL are in productive dialogue about all options for improving funding flows to the EFL, including the possible reform of parachute payments and reducing the ‘cliff edge’ between the Premier League and the EFL Championship.
“And importantly to also address similar ‘cliff edges’ between the Championship and Leagues One and Two. It is our view that it is not as simple as more money to the EFL automatically leading to greater sustainability; we know from experience this is not the answer.
“However, collective reform, paired with new and robustly enforced financial controls, is the right way to address the current challenges.”
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