It is “absolutely fundamental” a new independent regulator has the power to impose a financial settlement for English football, according to one of the game’s most powerful figures.
Rick Parry, the chairman of the English Football League (EFL), told BBC Sport he had held “positive” talks with the Premier League and the Football Association over the sport’s future.
But there has been little progress over the EFL’s wishes for a greater share of the top-flight’s wealth, and the abolition of ‘parachute payments’ to relegated clubs – solidarity payments made to help relegated sides adjust to lower revenues.
The government is on the verge of revealing plans for some of the biggest changes to the way football is run for decades with the creation of an independent regulator.
But Parry warned that if the regulator cannot force the release of more money to the wider game, “we have a major problem”.
The former Liverpool chief executive said the EFL’s position was strengthened by a “seminal” new report it has released, measuring the community impact of its 72 clubs for the first time.
Conducted by independent researchers, the study estimates more than £865m of ‘social value’ was generated across the country last season, with 840,000 participants engaged on EFL community programmes.
“It’s a huge number,” said Parry.
“This is savings for the government in terms of contributions to physical health, mental health, training, and preparedness for work at a time when we’re talking about the sustainability of clubs.”
Parry said the regulator was a “once-in-a-lifetime opportunity to have a proper reset, secure the sustainability of our clubs for the long term and build upon these community partnerships”.
He added: “Football has a huge opportunity, and if it doesn’t grasp that chance then we have a major problem. This isn’t tinkering, this isn’t about a few more crumbs on the table.”
What’s the background?
Last year, despite opposition from the Premier League, the government said it would establish an independent regulator in football after endorsing recommendations made in a fan-led review.
Chaired by the former sports minister Tracey Crouch, it followed a number of high-profile crises in the sport, such as the failed European Super League breakaway and the collapse of Bury FC.
The regulator is expected to have the power to sanction clubs who break financial rules, a new owners’ test will be introduced, and legislation will give fans more say in the running of the game.
Crouch’s review also focused on financial redistribution, suggesting “more support from the Premier League to the pyramid…” via a solidarity transfer levy.
The government has said the issue should be solved by the football authorities “in the first instance”, and it remains unclear whether the regulator will have ‘backstop’ powers to implement redistribution if agreement cannot be reached.
“Our view is absolutely that it has to,” said Parry, who expects a white paper – the government’s plans for the legislation – to be revealed later this month.
In November, 29 clubs wrote to the government urging it to press on with regulation, warning the Covid-19 pandemic and cost of living crisis meant clubs could be “wiped off the map” if there was any further delay.
‘If we don’t have a rethink we’ll have another Bury’
The EFL has told its clubs it is “not hopeful” of securing the settlement it is looking for – a 25% share of pooled broadcast revenue with the Premier League, merit-based payments across all four divisions, and the abolition of ‘parachute payments’ to teams relegated from the top-flight.
“We are not sitting here saying ‘it’s our 25% or nothing’, but equally we think we’ve been sitting at the negotiating table patiently for 18 months,” said Parry.
“We are not going to negotiate against ourselves.
“We have no negotiating leverage because of the financial disparity. We don’t really have an awful lot to trade.
“We have a lot to talk positively about in terms of development pathways, increasing loan opportunities.
“It would cost the Premier League about an extra £300m [a year]- that’s 8% of their wage bill – their wage bill is double every other league in Europe.
“So it’s not going to damage the Premier League. We’re not in the business of killing the ‘Golden Goose’.
“This must not be mischaracterised as hand-outs. This is sustainability of the game.
“And why does it matter? The importance of clubs within their communities is absolutely essential. So it has been talked about for long enough. Let’s move on and get it right.
“If we don’t have a rethink we’ll have another Bury and be back at square one.”
EFL clubs facing two ‘cliff edges’
“Sustainability requires better regulation, but equally important is redistribution, because we can demonstrate two-thirds of our clubs are insolvent,” said Parry.
“This isn’t about horse-trading over percentages – we have two ‘cliff edges’.
“One is between the bottom of the Premier League and the top of Championship – the gap is almost £100m – that’s almost unbridgeable.
“But we have another because we have the ‘parachute payments’ – so a £40m gap within the Championship. And it’s these gaps that cause irrational behaviour.
“We would like to eliminate parachute payments and we need more money.”
The Premier League has said it gives away 15% of its revenue already and must protect the competitive balance of its competition.
In 2020, it also agreed a £250m rescue package to help ease the financial challenge faced by EFL clubs as a result of the coronavirus pandemic.
However, Parry insists the current model “isn’t sufficient”.
He said it was “sobering” that there had been an “enormous divergence” in the respective revenues of the two leagues over the last 30 years.
The future of the EFL Cup
With the fixture calendar set to be squeezed further by the Champions League expansion next year, Parry was asked whether he was prepared to consider scrapping the EFL Cup and FA Cup replays to create space in the schedule.
“We’re prepared to have constructive discussions around the calendar,” he said.
“I’m open to absolutely anything that improves the health of the game.
“We don’t think there is any appetite to scrap the Carabao Cup. Even from the biggest clubs.
“Are we willing to look at the schedule? Do we have to be open to the question of two-legged semi-finals? Absolutely. But we think these are discreet questions…for us nothing is off the table.”