The Premier League has until the summer to reach a new agreement on payments to the EFL and the football pyramid or risk the threat of a transfer levy and other tougher terms being imposed upon it by a new independent regulator.
The Government has given its support to a regulator backed by statute on Monday, as recommended by the fan-led review last November.
It is open to giving the new body backstop powers to impose a solution on the Premier League if it and the EFL have failed to make sufficient progress on carving up television cash before a white paper setting out further detail is published this summer.
The #PL is committed to working with the U.K. Government during the next phase of consultation regarding a strengthened regulatory system across football
— Premier League (@premierleague) April 25, 2022
Sports Minister Nigel Huddleston said: “The message to the Premier League is quite clear – they need to act sooner rather than later because, otherwise, (a settlement) will be forced on them through the regulator.”
The Government’s written response to the fan-led review, published on Monday afternoon added: “We have been pressing for a solution in this regard and although some progress has been made, it is disappointing that this appears to remain some way off.
“We will make an assessment on the likelihood of agreement for a football-led solution and will confirm whether there will be a role for the regulator in redistributing income when we publish the white paper.
“We welcome any further updates by way of agreed positions or proposals from football around redistributions in advance of that.”
The Government also argued that, given a regulator will ensure clubs in the EFL and elsewhere are better managed financially, there is “no viable argument” for the Premier League to resist a greater flow of funding down the pyramid.
One of the most controversial recommendations of the fan-led review was a transfer levy on Premier League clubs. Huddleston said such a levy was “potentially in the mix depending upon what the Premier League and others come up with”.
He added: “We want to keep the pressure on for the Premier League to come up with their own solution first.”
The Premier League is currently committed to providing £1.6billion in funding outside the top flight over the next three seasons.
Its chief executive Richard Masters has previously said it would be “a disaster” if the EFL’s request for a 25 per cent cut of broadcast revenues was met.
EFL chairman Rick Parry told PA last week he hoped the Government’s response would serve as a “catalyst” in the negotiations over financial distribution.
The Premier League described the dialogue as “productive” last week and said discussions included “the possible reform of parachute payments and reducing the ‘cliff edge’ between the Premier League and the EFL Championship, and to address similar ‘cliff edges’ between the Championship and Leagues One and Two.”
The Premier League said on Monday it disagrees with the Government’s view that football needs a regulator backed by statute, but Huddleston is adamant that one is coming, and said it was “normal” that the industry itself should pay for it.
The white paper later this year will set out more of the detail regarding the remit of the regulator, and whether it will sit within an existing body or entirely separate.
Huddleston appeared to rule out the idea of the Football Association serving as the independent regulator.
“The FA has already got some demons it is dealing with and tackling its own governance structural challenges and is making movement,” he said.
“I think it would be difficult to imagine the circumstances where it would, at least currently, fit the criteria that’s needed to become the independent regulator.”
The Government sees the regulator’s primary role being to ensure football is financially sustainable via a licensing system, but disagreed with the fan-led review recommendations that it should have the power to impose sporting sanctions such as points deduction or relegation.
Two of the other key pillars of the fan-led review were greater fan engagement via the creation of shadow boards and better protection for club heritage via a ‘golden share’ veto for supporters’ trusts.
Been so busy talking about the Fan Led Review into Football Governance that I've not actually had the chance to tweet the link to the Report! Here it is! If you haven't got time to read 162 pages (boooo) skip to Annex A to see the full recs https://t.co/Z5bbW66uwG
— Tracey Crouch (@tracey_crouch) November 25, 2021
The Government is concerned about the practicalities of both of those ideas, but does want the regulator to ensure minimum standards on fan engagement and protection of club heritage.
Huddleston agrees the regulator should set and administer new owners’ and directors’ tests and wants an enhanced integrity test to be part of it.
However, the Government has stopped short of regulating against the possibility of clubs being state-owned, and has not made any specific pledge for human rights to be a consideration either at this stage.
Full detail on the integrity test will be published in the white paper.
While the Government has been praised for endorsing the review recommendations, it has been criticised over the lack of a firm timetable to pass the legislation needed to underpin the regulator.
Prime Minister Boris Johnson says people will have to “contain their impatience” and Huddleston added: “We shouldn’t underestimate the complexity of this.
“Even setting up a regulator itself, exactly what the scope is, exactly what are the compliance measures, exactly what the sanctions would be, exactly what would the appeals process be, where would it be set up?
“All of these kind of things need to be thought out in quite a fine degree of detail and we just need a bit more time to put that in.
“I’m asking fans just to be a little bit patient while we get that but, over the summer, we’ll get more details.”