EFL clubs could be ‘pushed over the edge’ if transfer levy proposals dropped

·4-min read

There are fears EFL clubs and those lower down the pyramid could be “pushed over the edge” by the cost-of-living crisis if proposals for a new transfer levy on Premier League deals are dropped.

A levy of up to 10 per cent on deals done by top-flight clubs was one of the key recommendations of the fan-led review chaired by Conservative MP Tracey Crouch, a proposal which was heavily criticised by some Premier League executives including West Ham’s Karren Brady and Leeds’ Angus Kinnear.

Sources have told the PA news agency they do not expect it to figure in the Government’s White Paper on football governance and independent regulation for the game.

Leeds United v Newcastle United – Premier League – Elland Road
Leeds’ Angus Kinnear has been critical of the transfer levy proposal (Mike Egerton/PA)

The White Paper had originally been due for publication in the summer but is not now expected to be published until early October, after the political party conference season. It could be delayed still further due to the imminent change of leadership of the Conservative Party and subsequent Cabinet reshuffle.

The levy was intended by Crouch and her panel as a mechanism to provide further financial support to clubs in Leagues One and Two and further down the pyramid.

A surcharge of 10 per cent on the near £2billion spent by Premier League clubs this summer would have been very timely indeed for clubs concerned about the impact of the cost-of-living crisis and wondering how to deal with spiralling energy bills.

Niall Couper, the chief executive of Fair Game which campaigns for greater financial sustainability in football, said: “The pandemic left loads of clubs on the precipice, and now the cost-of-living crisis could push them over the edge.

“The proposed levy could be the lifeline football needs.

“Fair Game represents hard-working community clubs and we’d love to see the Government act quickly to bring it into place and provide the support the pyramid needs. Without it the whole ecosystem of football could collapse.”

PA understands some EFL clubs are looking at how to cut energy costs. Consideration is being given to trying to agree collective deals with suppliers, and to weighing up whether to request permission to play EFL Trophy matches in the daytime or kick off Saturday 3pm matches earlier.

It is understood Championship clubs earned £140million from the summer’s Premier League transfer spending.

Everton’s Dwight McNeil, left, and Nottingham Forest’s Lewis O’Brien
Everton’s Dwight McNeil, left, and Nottingham Forest’s Lewis O’Brien moved from Championship clubs this summer (Peter Byrne/PA)

Spending in the second tier, though, did not rebound to pre-Covid levels and there are concerns for clubs lower down the pyramid.

Tim Bridge of Deloitte’s Sports Business Group told the PA news agency: “What we are concerned about here is the fact that through Covid, the Football League clubs had to turn to debt funding.

“There is no way football can be immune from the challenges over the coming months and years. I would hate to see a world where we lose the community impact that clubs can have – particularly lower down the system.

“I think we will see changes over the coming months and years and hopefully they’re for the good of all of the system.”

An existing levy of four per cent on transfers helps support the academy system and footballers’ pensions.

England v Austria – UEFA Women’s Euro 2022 – Group A – Old Trafford
Nigel Huddleston MP said in April that the transfer levy was still “potentially in the mix” (Nick Potts/PA)

The Government has declined to comment on the precise content of the White Paper, but Sports Minister Nigel Huddleston MP said in April that the transfer levy was still “potentially in the mix”, depending on what solutions the Premier League and the EFL came up with.

Premier League clubs are understood to still be considering the detail around the so-called ‘New Deal For Football’ over the distribution of money from the top flight to the EFL.

It has been reported parachute payments would be retained in the new deal, albeit in a reduced form, and that merit-based payments would be introduced for the Championship.

Huddleston said in April that the White Paper would contain a provision to give a new independent football regulator backstop powers to impose a financial solution if one cannot be agreed by the football authorities.

The Premier League is currently committed to providing £1.6billion in funding outside the top flight over the next three seasons.