How Could Football’s Funding Regulator Change Club Payments?

How could the regulator change football funding?

The plan described by Independent Football Regulator chair David Kogan would change how money flows from the Premier League to the wider English game. It could cut parachute payments to clubs relegated from the Premier League and increase solidarity payments to the English Football League, or EFL, which runs the three divisions below the Premier League. ¹²

The Premier League has reportedly discussed paying more than twice its current annual solidarity amount, alongside a large fund for redevelopment and a separate fund for clubs that need short-term financial help. ² The reports do not give a final payment schedule or say how much each club would receive.

What are parachute and solidarity payments?

Parachute payments are payments to clubs after they are relegated from the Premier League. They are intended to help with the financial transition after leaving the top division. The sources describe them as a major issue because clubs receiving them can have a financial advantage over other teams in the Championship. ¹

Solidarity payments are money distributed to clubs in the lower leagues. Increasing them could send more funding to EFL clubs, including those that have not recently played in the Premier League. The proposed change is intended to narrow the financial gap, but the available reports do not specify exactly how the payments would be divided. ¹²

What are the proposed new funds for?

The proposed redevelopment fund could support projects chosen by lower-league clubs. Kogan said possible uses included stadium work, youth development and other club needs. ²

A separate liquidity fund would be for clubs facing financial trouble and needing money to help them through a difficult period. The reports connect this idea with avoiding a sudden financial crisis like the one that threatened Sheffield Wednesday. They do not provide the fund’s size, access rules or guarantee that it would prevent future club failures. ¹²

Would Championship clubs such as Sheffield United benefit?

Potentially, but the sources do not say what any named club would receive under the proposals. Sheffield United was reported as one of the clubs that could be affected by the funding shake-up. The report also noted that the club had lost its Premier League financial cushion, leaving it operating as a Championship club without those benefits. ¹

If more money reached the EFL, clubs could have access to greater shared support. But the effect on an individual club would depend on the final agreement, including how payments are allocated and what conditions apply. Those details have not been reported.

Has a new funding deal been agreed?

No final agreement is described in the reports. The Premier League and EFL have been in talks, but earlier attempts to reach a new settlement had not succeeded. The previous agreement was a five-year deal made in 2019, according to the Yorkshire Post. ²

The regulator’s role is to protect and promote English football’s sustainability. The Yorkshire Post reports that the regulator could intervene if the leagues do not agree how to distribute the game’s income. That does not mean the reported proposals are already binding or that every detail has been decided. ²⁴