The Government has recently announced changes regarding the consideration of parachute payments in the independent regulator’s assessment. These payments, made to clubs relegated from the Premier League to the Championship, were initially left out of the original Football Governance Bill. However, the updated Bill will enable the regulator to consider these payments under its backstop powers. These powers allow for mediation in financial disputes between the Premier League and the English Football League (EFL) if independent agreements cannot be reached. The Bill will also introduce requirements for clubs to engage with fans concerning ticket pricing. This move responds to concerns from Premier League supporters’ groups about potential pricing out of loyal season ticket holders. Nonetheless, the inclusion of parachute payments in financial assessments is viewed as a significant change.
Rick Parry, the EFL’s chairman, has criticized parachute payments for distorting the Championship landscape. The Government supports this viewpoint, citing the need for a comprehensive assessment of financial stability within the football pyramid. The Premier League, however, maintains that these payments are essential for the financial stability of newly promoted clubs striving to compete in the top tier. Concerns have been raised by the Premier League regarding the regulator’s potential overreach in redistributing its revenues. Negotiations for a ‘New Deal’ between the Premier League and EFL have stalled since March. In light of recent legislative developments, there is hope for resumed dialogue and eventual financial sustainability for clubs across the football pyramid.
Rick Parry said, “We believe the Bill has been framed in a way that will enable the new regulator to protect and achieve the sustainability of clubs across the entire football pyramid.”
The legislation’s aim includes delivering the State of the Game report within 18 months, ensuring an independent basis for the regulator’s operation. This effort intends to detach future club takeover considerations from government trade and foreign policy objectives, maintaining regulatory independence from government influence.
A key statement revealed, “It is also pleasing that the State of the Game report, which will provide the objective and independent basis for the new regulator’s work, will be delivered within 18 months. It ensures that future club takeover approvals will not need to consider the Government’s trade and foreign policy objectives, thereby maintaining the regulator’s independence from government influence.”
The legislation had been delayed but has been revisited following the July General Election under the Labour administration.
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