What does the failure of a new football financial deal mean to PL clubs?



By Tony Attwood

While we’ve naturally been looking at the Champions League, the Premier League and the Football League have been making some attempts to come to a financial deal of their own, and failing.   As a result, there has been renewed talk of the long-awaited football regulator for England stepping in to force clubs that come to a deal.

This in turn would seem to be against Fifa and Uefa regulations which prohibit government involvement in directing football matters, but is probably the backstop reason why the Premier League clubs do not feel pressured.   If the government did step in there is a chance that the England national team would be kicked out of international competitions.

So what now?

It appears that the attempt of the Premier League and Football League to agree on a £900m package from the former to the latter to help support the lower leagues has failed and the Culture Secretary (Rt Hon Lucy Frazer KC MP, Secretary of State for Culture, Media and Sport, under whose remit football in England falls) has said he will push through the role of the independent regulator and tell the regulator to sort this out as a first priority.   

Thus suggesting that the word “independent” in the phrase “independent regulator” actually means independent of the football clubs, but absolutely not of government.  That is what Uefa and Fifa will want to look at since in their rules government involvement in football is strictly prohibited.

And it is not that the two sides are edging closer together.   At the Premier League clubs meeting three days ago, the delegates did not move an inch.  There was no increase in the offer of funding for the Football League at all.   Rather the Premier League view seems to have been, “we’re sorting our house out,” (see for example the cases against Manchester City, Chelsea, Everton and Nottingham Forest), “so you sort your own house, don’t come bleating to us.”

The media were somewhat taken aback by this given that they had been talking about “Top-flight sources” having expressed this view, prior to the meeting which they expected to be decisive.  Instead, the Premier League appears to have responded with a polite equivalent of “bugger off”.

The view in the Premier League is that the current Profit and Sustainability Rules are not working, largely because votes concerning the rules tend to be split along the lines of 12 to 8 votes.  The eight are the clubs that are in trouble with the current system (seeingly led by Manchester City, although I can’t prove that) and they are simply throwing down the gauntlet saying, “if you don’t back off we will disrupt the entire system”.

So it is not so much a case of two offers on the table, but a demand on one side and “no chance” on the other.

What the Football League had been looking for was a deal of around six years which gave the Football League a whacking great 15% (or thereabouts) of the media revenue that the Premier League is earning each year.    That is said to be heading toward £1 billion, and if it is not at 1 billion now it will be next time around.

According to the government statement.  “Premier League clubs [have] reconfirmed their commitment to securing a sustainably-funded financial agreement with the EFL, subject to the new financial system being formally approved by clubs.”

Accordint to the Telegraph, however a person close to the discussions said that actually “the situation is “absolutely shambolic,” pointing out that neither Uefa/Fifa, nor the Premier League are willing to give an inch.

The fact is that Uefa/Fifa cannot afford to lose the Premier League clubs from its competitions as they are among the biggest earners in terms of attracting Europe-wide audiences, and indeed in ever growing importance, US-wide audiences too.

Indeed the Premier League clubs seem to feel that their position is so strong that if they refuse to do a deal with Uefa/Fifa then the governing bodies will simply give in, because they have no fall-back positioin if the English clubs do not participate in existing compeitions but set up their own compeitions with other clubs in Europe.

The Premier League want to implement their own model based on allowing clubs to spend 85% of their income on the squad (for salaries and transfers).

So in fact what we have now are three different proposals.  Uefa/Fifa’s rules, the Premier League’s proposals, and the UK government’s proposals.   There is every likelihood and there will be no agreement, and then… presumably everyone will just muddle through and the UK Football Regulator will have failed to achieve anything in his first test.

But also this could be a major victory for the Premier League over Uefa and Fifa who are seen as being increasingly out of touch with the way modern football is developing..

One Reply to “What does the failure of a new football financial deal mean to PL clubs?”

  1. That’s a bunch of really nice guys. They must be learning from Red Bull’s F1 saga.

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