The EFL notes the Government has today approved in principle a renewal of the Premier League’s domestic broadcast arrangements and welcomes the increased funding that is to be made available for Leagues One and Two in the EFL, the National League system, Women’s and Girl’s football alongside supporting ongoing work carried out by some of the game’s key stakeholders.
However, it is important to acknowledge that the current media rights deal will preserve the status quo of an unbalanced, unsustainable, and unfair financial distribution model across English football which continues to cause serious financial issues throughout the football pyramid, while continuing to distort competition between Clubs and threaten the long-term viability of EFL competitions and Clubs in the Championship, League One and League Two.
Championship Clubs in particular face impossible economic pressures, seeking to gain promotion to the Premier League, which has in turn led to untenable financial speculation and irrational behaviour.
With combined losses of £600m over the last two years, it remains in a perilous financial state, and for the first time in its history, the EFL recently had to borrow £117.5m from an external financial institution, albeit with assistance from the Premier League to cover interest charges, to provide working capital for a majority of Championship Clubs to enable them to survive the effects of the pandemic.
While we recognise the attempts by the Government to increase the level of solidarity provided to League One and Two Clubs through this process, what is more urgently required is a fundamental re-set of the game’s financial model - both in terms of fairer distribution of monies at all levels and sensible, realistic cost control measures to ensure Clubs will live within their means.
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.
It is therefore essential that these issues now get addressed urgently through the Premier League’s strategic review and/or the Government’s fan led review of football governance. We therefore welcome their inclusion in the list of important issues that will be considered in Tracey Crouch’s forthcoming review.
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 EFL will always welcome the opportunity to contribute to any wider discussion with the Government and colleagues across the game so we can collectively protect our pyramid, the 72 Clubs who play in it, along with the towns and cities in England and Wales from where they take their names.