Premier League halts EFL ‘New Deal’ talks amid funding dispute

Premier League halts EFL ‘New Deal’ talks amid funding dispute
  • PublishedDecember 27, 2023

Richard Masters, the Premier League CEO, tells clubs it does ‘not have a mandate’ to sign an £881m funding agreement with lower-league counterparts, Sky News learns.

The Premier League has called a halt to talks about a landmark financial settlement with the rest of the professional football pyramid in a sign of deepening divisions about the scale and structure of the proposed deal.

Sky News has learnt that Richard Masters notified the 20 top-flight clubs just before Christmas that the Premier League would “pause further discussions with the EFL [English Football League] for the time being” after failing to secure a mandate to sign an agreement.

The decision to postpone further negotiations with its lower-league counterparts reflects unrest among many Premier League clubs about the £881m ‘New Deal’, with no imminent prospect of the required majority of 14 clubs voting in favour.

Owners and club executives have grown increasingly unhappy in recent months because of the overall cost of the subsidy to the EFL, as well as the lack of certainty about the scope of English football’s new independent regulator.

The agreement would effectively see close to £900m handed out by Premier League clubs to their 72 EFL counterparts over a six-year period, with the overall cost potentially being reduced from £925m to £881m if an immediate £44m payment was ratified.

However, the Premier League did not put two ‘New Deal’ resolutions to a formal vote of shareholders at a meeting earlier this month, with clubs instead being asked to respond to written resolutions shortly before Christmas.

Sources said there remained a dearth of support both for the overall quantum of the deal as well as a funding model that would be used to deliver it.

Earlier this month, Sky News revealed that Premier League clubs had been asked to support a £44m up-front payment to the EFL in the latest attempt to kickstart the funding settlement – talks about which have been ongoing for many months.

One source close to the situation said on Tuesday that there had been growing calls among top-flight executives for the New Deal to be approved alongside – rather than prior to – agreement on financial controls, with consultation on a new package of reforms expected to be launched in the new year.

They added that the Premier League was also working through details of a funding mechanism that would reflect the diversity of views among its clubs.

The key for the Premier League was to find a viable lasting agreement in the best long-term interests of the game, rather than sign a ‘quick-fix’ deal, the source added.

The EFL is said to have been notified about the Premier League’s decision to temporarily “pause” talks about the New Deal.

Nevertheless, the latest development is likely to disappoint Whitehall, with pressure having been exerted by ministers and cross-party MPs for the New Deal to be struck months ago.

Mr Masters wrote to clubs during the summer to express optimism that it would be signed shortly after.

Pressure has been growing on the Premier League to reconcile emerging fractures on critical issues of financial and sporting integrity, even after it signed a £6.7bn four-ytear domestic broadcast rights deal with Sky, the immediate parent company of Sky News.

Some club executives from outside the ‘big six’ – comprising Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur – have been issuing private warnings that the proposed New Deal settlement could cause serious financial damage to them.

At least one club in the league’s bottom half is understood to have raised the prospect of having to borrow money this year to fund its prospective share of the handout to the EFL.

Proposals for a bespoke licensing regime floated by the government has created distinct unease among a number of Premier League clubs, some of which believe that the New Deal should remain unsigned until there is greater clarity about how the regulator will operate.

Some also want tougher rules on associated party transactions which govern player and commercial deals with connected companies, or clubs which are under the same ownership structure.

Under a blueprint outlined to clubs during the autumn and revealed by Sky News, the New Deal would run for six years, with the deal worth £190m to the EFL in the 2028-29 season, the final 12 months of the period.

The funding for lower-league clubs would be in addition to existing annual solidarity payments of £110m and further funds earmarked for youth development.

In a white paper published earlier this year, the government said: “The current distribution of revenue is not sufficient, contributing to problems of financial unsustainability and having a destabilising effect on the football pyramid.

The document highlighted a £4bn chasm between the combined revenues of Premier League clubs and those of Championship clubs in the 2020-21 season.

The impetus for a new regulator has gathered pace since the Conservative Party’s 2019 general election manifesto, with Rishi Sunak pledging to continue reforms set in motion under Boris Johnson.

The Premier League declined to comment.

SOURCE: SKYNEWS

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