The English Football League (EFL) has hit out at the Premier League over the £4.5 billion renewal of its existing media rights contracts, suggesting that the deal could cause ‘serious financial issues’ for clubs across the Championship, League One and League Two.
Earlier in the week, the English top-flight finalised an agreement ‘in principle’ with broadcasters Sky Sports, BT Sport, Amazon and BBC Sport, cutting out the normal tender process in order to avoid a dip in value.
The deal would see the Premier League commit a further £100 million in funding to lower league clubs, in exchange for government approval, including League One and League Two teams which are ‘particularly’ vulnerable due to the financial ruin caused by the coronavirus pandemic.
However, the EFL said that the deal would ‘preserve the status quo of an unbalanced, unsustainable, and unfair financial distribution model across English football’ which causes ‘serious financial issues’ and continues to ‘distort competition between clubs and threaten the long-term viability of EFL competitions’.
The EFL statement read: “Today’s announcement appears to have been a missed opportunity for the Government to obtain a commitment from the Premier League to address the financial imbalance that exists between the top division and the rest of football and comes just a matter of weeks since football and authorities unified with a collective voice to protect the integrity of the top division and wider pyramid in this country.”
In December last year, the Premier League agreed a £250 million bailout package with the EFL to support clubs in the three divisions below the top-tier, with Championship clubs receiving £200 million and the remaining £50 million grant split between League One and Two.
The EFL also secured a £117.5 million financial support package from asset management firm MetLife Investment Management for second-tier teams.
The statement added: “While our previous calls have so far been overlooked, the EFL maintains that sustainability can be achieved with 25% of English football’s pooled net media revenues distributed to the EFL, alongside the abolition of the outdated parachute payment system and introduction of appropriate cost controls. It is our strong view that parachute payments are not a form of solidarity and instead provide a reward for relegation while distorting competition.
“They should be halted with the money instead reinvested for the ultimate benefit of the pool and our 72 members. These changes alone would provide the EFL with the platform it requires to significantly reduce the financial chasm between the Premier League and Championship and provide fairer distribution throughout our leagues to help achieve sustainability in the professional game.”
The DCMS has already announced a ‘fan-led review’ into the governance of football, which will be headed up by former Sports Secretary, Tracey Crouch, with one of the key aims of the study being to ‘examine the flow of money through the football pyramid, including solidarity and parachute payments, and broadcasting revenue’.
Responding to the questions on why the Championship was left out of the £100 million of supplementary funding in the broadcasting extensions, the Premier League’s Chief Executive, Richard Masters, noted that it is ‘the right balance at the moment’.
“In the last two years we have distributed a lot of revenue and additional monies into the Football League,” he explained. “But the major recipients of the solidarity money are the Championship clubs themselves.
“When I talk about the £1.5 billion it includes parachute payments, but the sums that aren’t parachute payments are still substantial and it’s a £110 million we give to the EFL each year that’s shared amongst clubs that aren’t parachute clubs. The majority of that goes to the Championship.”