Regulator could stall £915m football deal

In the ever-evolving landscape of English football, Premier League clubs are poised to postpone the formalisation of a £915 million financial package, referred to as the “New Deal,” designated to bolster their lower league counterparts. This delay is triggered by mounting concerns regarding the potential ramifications of a forthcoming independent football regulatory authority.

The proposed New Deal, meticulously presented to Premier League clubs during a recent briefing, is structured to span six years, taking immediate effect with an initial £88 million allocation to the English Football League (EFL) in its inaugural year. This figure is projected to ascend progressively, culminating in a substantial £190 million infusion during the 2028-29 season, marking the culmination of the six-year tenure. The intervening seasons would witness allocations of £101 million, £174 million, £178 million, and £184 million, as revealed in financial forecasts disseminated among Premier League entities, including notables such as Burnley, Chelsea, Liverpool, Manchester United, Newcastle United, and Tottenham Hotspur.

Nevertheless, insiders divulge that skepticism is mounting within certain Premier League clubs concerning their acquiescence to such an extensive wealth transfer to the EFL, especially in the absence of concrete assurances concerning the future regulatory framework of the sport.

The government has promised to establish an autonomous oversight body, vested with the authority to issue licenses to all clubs operating within the top five tiers of English football. The legislative groundwork for this regulatory entity is anticipated to be included in the forthcoming King’s Speech.

However, apprehensions have arisen within a number of Premier League clubs regarding the bespoke licensing regimen proposed by the government. Some within these ranks argue that the New Deal should remain unsigned until greater clarity emerges regarding the precise mechanics and operation of the regulator.

In tandem with their top-tier counterparts, EFL clubs, encompassing entities like Leicester City, Fleetwood Town, and Sunderland, have also expressed alarm at certain aspects of the proposed regulatory framework.

Thursday’s pivotal meeting follows extensive deliberations held earlier in the week between representatives from Premier League and EFL clubs, alongside executives from both organising bodies. These discussions, ongoing since the previous year, have encountered persistent obstacles, chiefly centred around the contentious issue of parachute payments afforded to Premier League clubs relegated to the Championship.

The financial provision earmarked for EFL clubs would be supplementary to the existing annual solidarity payments amounting to £110 million, in addition to funds dedicated to nurturing youth talent.

Further discord festers within the Premier League regarding the allocation of the New Deal funds among its 20 constituent clubs. A senior executive from a club outside the echelons of the “big six” asserts that this allocation conundrum remains a substantial impediment to the broader acceptance of any agreement.

At the recent shareholder meeting, the New Deal was not subjected to a formal vote. The overarching uncertainty concerning the prerogatives of a prospective football regulator implies that a ballot on the matter may remain distant.

Richard Masters, the Premier League’s Chief Executive, expressed his optimism in June, asserting his hope for a swift resolution. However, the dynamics at play continue to defy consensus.

Last month, the Culture, Media, and Sport Select Committee of MPs implored the Premier League and EFL to expedite an agreement on financial provisions throughout the English football hierarchy. They even warned of the potential imposition of a settlement by the new regulator if an accord failed to materialise. Dame Caroline Dinenage, the committee chair, underscored the consequences of inaction, emphasising the risk of more clubs facing insolvency and the detrimental effects on local communities.

A government white paper, released earlier this year, laid bare the stark financial disparities in English football. It spotlighted a staggering £4 billion chasm between the combined revenues of Premier League clubs and their counterparts in the Championship during the 2020-21 season.

The genesis of the impending regulatory authority can be traced back to the collapse of the European Super League project in 2021, which triggered widespread public and political outrage, particularly focusing on the participation of Arsenal, Chelsea, Liverpool, Manchester City, Manchester United, and Tottenham Hotspur.

Pan Finance is a print journal and news website providing worldwide intelligence on finance, economics and global commerce. Known for our in-depth analysis and opinion pieces from esteemed academics and celebrated professionals; our readership consists of senior decision makers from across the globe.

Contact us