Premier League and EFL reform [UPDATE 3 Dec 2020: Rescue Package Agreed]

I have absolutely no allegiance to the PL or interest in any PL team. I don't even watch PL games on Sky. But you're doing the PL a bit of a disservice. Yes, they are businesses and their prime repsonsibility is to their owners and shareholders. The financial facts are however that the PL pays out about £400m every season to EFL clubs. Most of that (around £200-250m) goes in parachute payments to Championship clubs who have previously been in the PL. There is another £150m paid out to the other 66 EFL clubs every season as what is called a solidarity payment. The PL agreed to start doing that about 15 years so that there was some benefit all clubs in the pyramid from the Sky contract.

Cutting through all the powerplay crap by the Big 6 on voting etc, the deal for the EFL clubs is to stop parachute payments (that would be a good idea in itself imo!) and to redistribute the £200-250m which goes to a small number of Championship clubs to all EFL clubs. That is the big change for the EFL and would be guaranteed in the future under the agreement to pay out 25% of the TV broadcasting. If that is redistributed on the basis of the current approach, that would mean all League 1 and League 2 clubs receiving more than double what we currently receive in solidarity payments and broadcasting rights. That's worth having for a club like ours.

 

The EFL could find itself in an interesting position as possible kingmakers in a battle between the big 6 and the rest of the Premier League.

Which side does it back?

If it backs the "big 6" against the "14" (other numbers are available), what will/can the "14" do?
If it backs the "14" against the "big 6", what will/can the "big 6" do?

And the two sides, in the Premier League, may find they are in a bidding war for the EFL's support.

Also, don't forget, the government (Oliver Dowden) are in the background with thinly veiled threats of significant changes to the governance of football, if suitable proposals/agreements do not emerge.

 

The Championship is the 'fifth' most lucrative league in Europe only because a small number of its clubs receive a £250m handout from the PL, aka parachute payments. Without parachute payments, it would be very similar in revenues to Bundesliga 2 and La Liga 2. It's the parachute payment system which distorts these comparisons.

The PL isn't going away and it will always be the crown jewels of the English pyramid. Having said that, I agree that it is the Championship which needs to be reformed the most. Reinforcing the FFP rules would be a great start especially if it were accompanied by a salary cap. I think that will happen at some point but there are many very wealthy owners in the Championship who will continue to oppose it. The second reform imo is to get rid of the parachute system. It's bizarre how Champ clubs can receive £90m for having failed in the PL and been relegated. It simply tilts the playing field in the Championship in favour of a small number of clubs and bids up players' wages. The Liverpool/Man U proposal does just what I'd like to see and that's to scrap parachute payments and redistribute the huge sum involved to other EFL clubs including those in the lower leagues.

I'll be very surprised if the EFL didn't support the Liverpool/Man U proposal particularly those parts relating to the better distribution of siolidarity payments to the EFL clubs. But I am expecting other proposals to come onto the table when a proper discussion can be had and some of the details of the current proposal dumped in the waste paper bin. The worrying aspect would be if other proposals start to close the door on the EFL and the PL becomes effectively a closed shop.

 

In the case of the 6, I believe that the plan is that if the other Premier League clubs do not back the plan, the 6 (plus whoever else panics and follows suit) would resign from the Premier League and be admitted to the EFL. The EFL would then freeze out the remaining Premier League clubs, leaving their TV and commercial deals in tatters.

Don't know if it would work, but that seems to be their plan. And I'm not convinced the "6" would go through with their threat either. Given the urgency to come up with something, this could be an interesting few days and weeks.

 

I've seen that comment about there being an invitation to the Big 6 from the EFL to join the EFL league. I'm told the invitation is true but it doesn't have much value.

A colleague at another firm who does a lot of work in this area with PL clubs has already said it's really a non-starter since Sky wouldn't want that to happen because it would undermine the current TV deals.More importantly, it would open the door to the Big 6 to negotiating their own broadcasting deals with whoever they wanted! Who knows what the consequences of that would be for the rest of the pyramid includ ing EFL clubs. But it's a good negotiating point.

 

That's not strictly correct. PL clubs have no automatic right to play in the Champions League or the Europa. They are both UEFA competitions and the PL isn't a member of UEFA. It's the FA which is affiliated to UEFA and nominates its representatives to play in UEFA competitions. Of course, to date the FA has always nominated PL clubs for the competition (although there was a time when the winner of the FA Cup was one of the nominations) since they are the 'best' English clubs. In the highly unlikely event that the Big 6 join the EFL, the FA could change its own position and instead nominate the top 6 clubs in the EFL as their reps in the Champions League and the Europa or even some mix between the two top leagues.

Maintaining access to UEFA competitions would be really important to the Big 6. I suspect that this has already been discussed with the FA, at least in principle. Why else does the Liverpool/Man U proposal include a £100m payment to the FA other than as a bung sweetener for the proposal?