Clubs in English men's soccer’s top-tier Premier League failed to reach an agreement over a funding deal for the second-tier English Football League (EFL) structure following another meeting on Monday (March 11).
The Premier League said in a statement its clubs had “agreed to prioritize the swift development and implementation of a new league-wide financial system.”
It added that progress towards a deal with the EFL was subject to the new system being approved by clubs.
Top-flight teams were last month (February) warned by Culture Secretary Lucy Frazer that if they failed to reach a funding deal with the EFL, one would be imposed on them by the new independent regulator set to be introduced by the UK government.
The teams previously failed to reach a deal after meeting to discuss the issue in late February.
There was an expectation that the Premier League would come out yesterday’s meeting with proposals to present to the EFL - however, there are still issues to be ironed out with the clubs before a deal is agreed.
The new financial system, which is likely to replicate UEFA's (European soccer's governing body) financial fair play model, would replace the current profit and sustainability rules (PSR) which allow clubs to lose a maximum of £105 million ($134.4 million) over three years.
A vote could be held to bring in the new regulations at the Premier League’s annual general meeting in June.
The Premier League said: “This will provide certainty for clubs in relation to their future financial plans and will ensure the Premier League is able to retain its existing investment to all levels of the game.
“Alongside this, Premier League clubs also re-confirmed their commitment to securing a sustainably-funded financial agreement with the EFL, subject to the new financial system being formally approved by clubs.”
Multiple clubs have fallen foul of the league’s PSR rules in recent months, with Everton the first to be punished for being in breach of it in the three-year period to 2021-22 with an initial 10-point deduction, reduced to six on appeal recently.
Both Everton and Nottingham Forest have also been charged for alleged breaches in their accounts for the period ending 2022-23 and are waiting for their cases to be heard.
Last September, the Premier League presented the EFL with an updated financial redistribution proposal that will see the English top-tier increase its payments to the EFL by £358 million over the next three seasons by selling their future international TV rights together from the 2028-29 season onwards.
The EFL last week sold its international rights to the Pitch International and Relevent sports marketing agencies for the next four years through 2027-28 and is expected to bundle its rights in with the Premier League at the end of this rights cycle.
If the EFL agrees to the updated Premier League proposals, the new deal would see its clubs receive an extra £88 million in the current 2023-24 season, an extra £101 million next season, and an extra £169 million in the 2025-26 season.
The figures will continue to increase for the following three seasons as part of the overall six-year agreement, with the second-tier Championship clubs getting 75% of the cash, while the third-tier League One and fourth-tier League Two clubs receive 15% and 10%, respectively.
The Premier League’s current international television contracts generate around £5 billion for a three-year cycle.
EFL clubs believe the offer represents around 14.75% of the combined overseas media revenue of the two leagues, depending on the exact figures of future television deals. However, it is well below the 25% the EFL is looking to secure.
The Premier League has argued the amount equals around 21% once transfer levies and other payments are considered.
EFL chairman Rick Parry is seeking 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.
The UK government confirmed plans to introduce an independent regulator to govern domestic soccer in February 2023.
In terms of financial distribution, the regulator will have the power to impose a new settlement, which effectively means it can force the Premier League to share more money across the pyramid.
