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Premier League and EFL are no closer to reaching an agreement on financial distribution and parachute payments

The Premier League and the EFL are no closer to resolving key differences over how to share the wealth of the game with just a week before a major soccer governance review is released.

The government fan-led review of the national game is expected to be completed next week.

When an interim report was released in July, the president of the review, Tracey Crouch MP, said she wanted the soccer authorities to resolve the financial distribution issue themselves.

Fan protests spread across the country after proposals for a European Super League were unveiled, but quickly widened and turned into broader criticism of soccer governance.

Fan protests spread across the country after proposals for a European Super League were unveiled, but quickly widened and turned into broader criticism of soccer governance.

But Sportsmail understands that it has not been possible with the deadline fast approaching and the EFL advocating for a large increase in funding and the abolition of parachute payments.

Any change would have to be approved by a majority of the top 20 clubs, with 14 votes in favor.

An EFL CEO said Sportsmail: ‘The PL wants to be the best, it has huge operating costs, it wants to spend a lot of money on players, it wants as much money as possible.

‘You will never get 14 votes for that at a Premier League shareholders meeting. They will never vote for it and it will never pass. ‘

Demands for a new soccer regulator have spread among fan groups

Demands for a new soccer regulator have spread among fan groups

Demands for a new soccer regulator have spread among fan groups

Crouch is desperate for football to solve the financial problems on its own, however, she is expected to recommend the creation of an independent regulator, which could impose a new financial model, if the government approves it.

It is understood that discussions have taken place and the Premier League has made a proposal to the EFL, but it does not deliver the fundamental reform that the lower leagues require.

The Premier League accepts that the current system needs an overhaul, but the question is what to do?

MP Tracey Crouch leads government's 'fan-led' soccer review

MP Tracey Crouch leads government's 'fan-led' soccer review

MP Tracey Crouch leads government’s ‘fan-led’ soccer review

Another EFL source said: ‘Ultimately, we want [Crouch’s] report to say that there should be a mechanism to intervene in gambling finances. We are calling for a fundamental restructuring. ‘

Crouch’s recommendations will be passed on to the Department of Cultural Media and Sport and the government will have to decide whether it is prepared to act on it, which would involve legislation to establish a new regulator.

EFL clubs insist that stability and survival depend on increased top-notch financial support and the abandonment of parachute payments, along with strict controls on club spending.

The Premier League currently shares approximately £ 250 million in parachute payments and another £ 100 million in solidarity payments with the remaining EFL clubs each year.

The top tier also pays additional cash to community schemes and other initiatives, bringing the total annual support to the football pyramid to £ 500 million. In any reformed system, you want to be sure that the money is going where it is needed most and that it is not wasted by wasteful clubs.

However, the EFL wants the Premier League to increase its contribution by pooling the revenues from the broadcast rights of both organizations and channeling 25 percent of the total to the clubs.

In addition, the EFL wants the abolition of parachute payments, which distort competition in the Championship, as large sums go to a small number of clubs.

The extra money, plus that currently spent on parachute payments, distributed more evenly would help reduce the huge financial gap between the Premier League and the Championship, argues the EFL. But the system would only work if club spending was regulated and supervised.

Manchester United fans have led calls for changes to the fan ownership model for clubs

Manchester United fans have led calls for changes to the fan ownership model for clubs

Manchester United fans have led calls for changes to the fan ownership model for clubs

As it stands, to encourage clubs to invest heavily when they move up to the Premier League, parachute payments are made to teams coming down to cushion their fall. These total up to £ 90 million over three years and help maintain top-flight competitiveness.

However, the parachute payments give relegated teams an advantage in the Championship, where non-relegated clubs receive just £ 4.5 million a year from the Premier League.

Club owners say the system encourages overspending across the EFL as everyone else tries to keep up.

League One Accrington Stanley owner Andy Holt said Sportsmail last week that if the Premier League does not agree to pay more and address parachute payments, then the EFL should split with the top tier and abandon promotion and relegation.

‘[The Premier League] it’s the problem, ” Holt said. ‘For me, there is no future in this current relationship [between the EFL and the Premier League]. We need to get this financial distribution right or we will break away from the Premier League.

Accrington Stanley owner Andy Holt believes the Premier League is threatening the future of clubs across the EFL as teams are encouraged to overspend to compete.

Accrington Stanley owner Andy Holt believes the Premier League is threatening the future of clubs across the EFL as teams are encouraged to overspend to compete.

Accrington Stanley owner Andy Holt believes the Premier League is threatening the future of clubs across the EFL as teams are encouraged to overspend to compete.

“Under the current system, if you run your club well, you fail,” was Holt’s grim conclusion. It is time for me to change.

He added: ‘There is no point in having the independent regulation if it is not about the financial disparity between the Premier League and the rest. If we don’t fix that, we are going to have more club administrations and clubs against the wall. ‘

Last season, Norwich and Watford were promoted from the Championship and benefited from parachute payments.

However, the Premier League questioned its distorting effects arguing that it was an unusual season affected by Covid and defended the payments.

“ We have, at the moment, an agreement with the EFL on parachutes, and that is the current model to support the clubs when they go up, so that they can afford to invest and be competitive in the Premier League, and also run their business. ” . in case they are relegated, ” Chief Executive Richard Masters told Athletic in May.

‘I don’t think what is happening right now at the top of the Championship is indicative of anything in particular. But obviously, we keep track of trends. ‘

Premier League CEO Richard Masters says top flight follows promotional trends

Premier League CEO Richard Masters says top flight follows promotional trends

Premier League CEO Richard Masters says top flight follows promotional trends

It is unlikely that an agreement on a new financial distribution between the Premier League and the EFL will not be reached to impress ministers.

The government pledged to conduct a fan-led review of football in its manifesto before the 2019 general election, however its determination was significantly hardened by frustration over how long it took the top flight to agree on a package of Support for the lower leagues during the COVID-19 Pandemic.

Crouch, a former sports minister and Conservative MP, was explicit in her interim report about the need for more regulation.

“To protect the future of key aspects of our national game, a new Independent Regulator of English Football is needed,” he stated bluntly in the first paragraph of his document.

And while concerned about parachute payouts for relegated Premier League clubs, which she believes distort competition, Ms Crouch had not settled on a solution and urged ‘strongly’ the top flight and the EFL to ‘seek a viable and achievable solution ‘themselves.

Sportsmail He reached out to the EFL and the Premier League for comment.

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