The Premier League’s “New Deal for Football” has stirred mixed opinions but is poised to provide additional funds to EFL clubs.
All 72 EFL clubs convened at Derby County’s Pride Park to examine the Premier League’s future proposal. While the deal is intricate, the primary goal has been to strike a balance between the current offer and the needs of EFL clubs.
According to a Championship official, “The new deal is papering over the cracks and leaves parachute clubs with an even bigger trampoline. But EFL clubs can’t turn it down as the financial state of the Championship is shot to pieces. There’s a risk of clubs going under. We have to accept the crumbs we are thrown. Don’t get me wrong, the money is okay; the conditions are shocking.”
Other chief executives have expressed varying degrees of appreciation for the deal, with some deeming it “reasonable” and others seeing it as “generous.” Nevertheless, the deal comes with numerous complexities.
All English football tiers are well covered, and fans can bet on unlimited football by downloading the Betfred app for Android and iOS.
Current Deal
EFL clubs are currently benefiting from a financial arrangement comprising several components. They receive £132 million in funding from EFL revenue and an additional £130 million that trickles down from the Premier League. Notably, a select few clubs, recently relegated from the Premier League, share over £200 million in parachute payments, collectively amounting to approximately £250 million in funding from England’s top division.
The £130 million in solidarity funds is allocated to Championship, League One, and League Two clubs in proportion to their respective categories. Excluding the recently relegated teams that receive more substantial parachute payments, each Championship team receives around £5.19 million, while League One and League Two clubs receive £780,000 and £520,000, respectively.
Regarding the EFL’s revenue distribution, Championship clubs are granted £3.2 million, League One clubs receive £950,000, and League Two clubs get £640,000. This allocation follows an approximate 80:12:8 model.
Currently, the EFL receives approximately 16 percent of the Premier League’s media rights revenue, which amounts to over £3 billion. However, nearly half of that revenue is directed to teams that either achieve promotion to the Premier League or face relegation from it.
Proposed Deal
The proposed changes involve the EFL seeking to increase their share of new media-rights revenue from 16 percent to 25 percent. They aim to redirect promotion and relegation-related funding into the solidarity pot, ensuring that all EFL teams benefit financially, as opposed to just a select few reaching the Premier League.
However, the Premier League is reluctant to relinquish parachute payments or promotion-related funds. They want newly promoted clubs to invest heavily and argue that other countries have systems that are less equitable for smaller clubs than the current arrangement.
The Premier League suggests offering 19 percent of the new deal as a counter-offer. A portion of this would be aimed at safeguarding and supporting relegated EFL clubs, with a two-year transitional period in mind.
In the first season, this would result in an £88 million boost to the solidarity pot, distributed among EFL clubs. In the following season, clubs without parachute payments would see an increase in their share, while those with parachute payments would experience a reduction.
The Premier League intends to protect the parachute payment system, with relegated teams receiving £52 million in the first year, £41 million in the second year, and £20 million in the third year outside the top division, similar to the current system.
Under the new deal, clubs would receive funding through a merit-based system akin to Premier League clubs’ current operations. This means clubs finishing higher in the standings would receive a larger share of the financial pot than those finishing lower.