Premier League clubs back ‘New Deal’ with EFL

The Premier League has been given a mandate by its clubs to negotiate a new deal with the EFL and the Football Association covering issues such as financial distribution and the future of domestic cup competitions.

The PA news agency understands the ‘New Deal For Football’, which would result in the Premier League distributing a greater percentage of the revenue it generates to the EFL and the pyramid than it does currently, was given clubs’ backing in an informal vote at a top-flight shareholders’ meeting on Tuesday.

The league will now discuss the proposals with the EFL and the FA in a bid to seek a game-wide agreement.

Watford's Ken Sema looks to cross the ball under pressure from the Norwich defence
Watford and Norwich benefitted from parachute payments after last season’s relegations (Steven Paston/PA)

It is understood the ‘New Deal’ would see the introduction of merit-based payments determined by the finishing positions of the EFL’s 72 clubs, chiefly to try to reduce the ‘cliff edge’ in revenues between the Championship and the Premier League.

Reform of financial support for relegated clubs is also being looked at, amid repeated calls from EFL chairman Rick Parry to abolish parachute payments.

The Premier League is understood to still believe in the principle of offering such support to relegated clubs, arguing it is essential to give clubs coming up the confidence to invest in being competitive in the top flight with less fear over the consequences of relegation.

The new deal also proposes the creation of an infrastructure fund to support lower-league clubs with capital investments like stadium and academy upgrades.

Going hand in hand with the new distribution model will be cost-control mechanisms governing the ratio of spending on wages, transfers and agents’ fees to turnover for clubs in the Premier League and the EFL. UEFA rules will limit this spending to 70 per cent of turnover from 2025 but it is understood a higher percentage would apply to English clubs.

The deal will also tackle calendar issues, with Premier League clubs understood to be almost unanimous in their desire to scrap FA Cup third and fourth-round replays from 2024-25.

BBC pundit Dion Dublin makes the FA Cup draw
Replays could be abolished in the early rounds of the FA Cup (Ian Walton/PA)

That is when UEFA’s men’s club competitions undergo a change in format resulting in more matches needing to be squeezed in for those involved.

The League Cup’s future will also be discussed as part of the negotiations.

Earlier this year, the then Sports Minister Nigel Huddleston had indicated that the Premier League and the EFL could have a financial distribution solution imposed upon them by an independent regulator if they could not reach agreement.

The prospect of a regulator being introduced appears to be receding, with a reference to bringing forward legislation to create one struck out of a written answer from current Sports Minister Stuart Andrew last week to a question from Labour MP Kevin Brennan.

Parry has called for EFL and Premier League broadcast and media rights to be sold jointly, with the EFL receiving 25 per cent of the total revenue.