After secret talks between the Premier League and the EFL, clubs are to be presented with alternatives to parachute payments, it said.
The concept of giving relegated players a portion of Premier League money for the first three years after leaving a league has been a hot topic since it was first introduced in 2006/07.
The idea is to cushion the blow as a club struggles with a drop in revenue from a minimum of £ 100m to a maximum of £ 6m as it realigns its spending. But opponents claim that this leads to distorted competition and makes relegation clubs the runaway favorites every year to win promotion.
Stoke City has fought behind the scenes to try to bridge the financial gap between the top two leagues.
The Guardian reports that discussions since the beginning of the pandemic are now coming to a head following the release of Tracey Crouch’s fan-led review of football governance.
One recommendation was that the Premier League and EFL have to find a solution to the problem by the end of the year – or that outside voices be called in to deliberate what needs to happen. The proposals are expected to be discussed by the EFL Board of Directors and at an emergency Premier League shareholders’ meeting.
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The latest domestic TV deal included terms that parachute payments would stay in place for at least another three years.
Officials from West Ham, Crystal Palace and Aston Villa have expressed concern about the Crouch review.
West Ham vice chairman Karren Brady wrote in The Sun: “EFL chairman Rick Parry’s constant grumbling about parachute payments is echoed by Tracey, who has fallen into a do-gooder trap here.
“Parry wants the parachutes deflated, which is strange since he designed them 14 years ago as PL chief executive.
“It doesn’t take a genius to find out that if you have a (modest) PL payroll of say 50 million in the EFL and you don’t have a parachute payment to pay your wages, then you go bankrupt. Just like Bury.
“And I thought the report was trying to prevent that?
“The argument is that the parachute payment skews the championship. That can’t be right, because 29 current clubs that have been relegated from the PL since it was founded are still not playing in it.
“Perhaps Tracey and Parry are mistaking competition for fairness, when she shouldn’t, being a Tory and an independent politician.”
Steve Gibson, owner of Middlesbrough, has made the alternative argument.
For the Daily Mail he wrote: “Many championship clubs are currently entirely dependent on ownership.
“The amount of money they put in to compete against the clubs that make do with parachute payments is just not sustainable. The abolition of parachute payments ensures better competition. “
The clubs will receive around £ 50m in the first year after relegation from the Premier League, followed by around £ 40m in the second and £ 18m in the third.
Rod Liddle, the Times’ Millwall-supporting columnist, has suggested that these payments result in overspending in clubs like Derby County and Reading.
He wrote this week: “The first task for Kirchner (prospective Derby owner Chris) will be to get the club out of administration.
“I suspect that he will soon realize that while Morris (previous owner Mel) played fast and easy with the FFP rules, much like (Dai) Yongge in Reading, he has a lot to blame for the various point deductions in the championship attributed to the grotesque injustice of parachute payments to clubs relegated from the Premier League.
“The rest of the division just can’t keep up unless they break the rules. And from that perspective, these rules actually seem unfair, a case of salt in the wound. “
Morris – who had tried to sell Derbv since 2019 and put it under management in September – has claimed that it is extremely rare for a club to win a promotion without breaking EFL rules.
And once they get up there is no comeback.
“There was one comment for me – and it’s not fair to say by whom – but looking at the past few years I believe that only two clubs – only two clubs – have made promotion without opposing in the year of promotion Having violated P&S, ”he told BBC Derby and DerbyshireLive.
“Before we start pointing the finger at Derby, let’s see what this landscape looks like. That is a massive statement.
“All you have to do is look in the Sunday Times, turn two pages between Derby and Leeds, and look at the stand. If we had been promoted to Frank Lampard there would have been no fees and I could have probably sold the club for £ 100m and got all my money back. It was in a game. “
He added, “The soccer financial model is broken and people need to wake up and understand how broken it is – and it has been broken for many, many, many years.
“I’ve done a lot of work since 2016 to question whether the championship and the EFL as a whole get a fair deal with their media rights. You’d think it’s a debate with Sky, but also with the Premier League.
“There is no question mark. There is no justification in the world for a Premier League game – and you can take the two smallest Premier League clubs with the smallest fan base – £ 10 million net to be shared between clubs.
“In the championship, even the biggest game you can imagine brings in around £ 500,000. One 20th of the value. When this inequality occurs, there is competitive tension between the Premier League and the championship and it is a nightmare. “
Everything is expected to stay on the agenda of Tony Scholes, the outgoing CEO of Stoke, in his new role as Premier League Chief Football Officer. He starts in January with a broad portfolio and works directly with clubs.
He said last year: “Our view as a club is that we should try to make sure that the gap between the Premier League and the championship is narrowed. Our concern is that some of the rules not only do not narrow the gap, they make it worse.
“We think that’s a structural problem for the game – and in my opinion it’s the biggest problem in the game. Anything we can do to narrow that gap, we should do.
“We’d say that if we were in the Premier League – in fact, we said that when we were in the Premier League.
“The financial gap not only means that people in the championship behave in a certain way, but also that teams in the Premier League act irrationally out of fear or relegation and what that means for them financially.”