Parachute payments pose problem for Premier League return

One of the key arguments for the return of the Premier League season is being challenged by the Football League, with a row brewing over controversial parachute payments.

As chairman of the English Football League (EFL), Rick Parry, appears before a government select committee to discuss the impact of Covid-19 on Tuesday, claims that the Premier League’s return should be hastened because of the benefits it brings to the game outside the top flight have provoked frustration.

Crystal Palace chairman Steve Parish wrote last weekend that a return to play is “partly about the money” and that “it is the Premier League that largely funds the whole football pyramid”. Culture secretary Oliver Dowden had previously told parliament he wanted to get the Premier League “up and running as soon as possible in order to support the whole football community”.

This interpretation is disputed by the EFL, however. The Premier League transfers £400 million a year to the EFL but £260 million of that goes to just nine clubs, those relegated from the top flight over the preceding three seasons, who receive the money in parachute payments. This mode of redistribution has long been controversial with claims that it distorts competition lower down the leagues and the EFL believes it should be reformed.

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The English Football League is also uncertain what benefit they would receive from the restart of the top flight, if games in the lower leagues were not able to restart at the same time. Last month the Premier League brought forward £125 million of solidarity and parachute payments, which had been due at the end of the 2019-20 season. The Premier League made no comment on the matter.

Parry is expected to raise the topic of parachute payments at the committee on Tuesday, but it will be only one of several pressing issues facing the organisation. In an article for the Guardian to be published on Tuesday, Mark Palios, the executive chairman of League One Tranmere Rovers and former chief executive of the Football Association, calls for a “a root-and-branch rethinking of the game’s structure” if the football pyramid is to survive.

Multimillion pound losses

The abolition of parachute payments is one measure advocated by Palios alongside an overhaul in the approach to ownership and a renegotiation of the standard EFL player contract. He also argues that an independent regulator should be considered to enforce the rules. “The last couple of months have demonstrated that English Football League member clubs are not able to do this themselves because of conflicts of interest, widely varying financial positions and stances on matters of principle, and the ostensible power of the PFA [Professonal Footballers’ Association]”, he writes.

At the FA, chairman Greg Clarke admitted that the pandemic could create a loss of £300 million for the game’s governing body and that matches, when they resume, will be behind closed doors for the foreseeable future.

“It’s hard to foresee crowds of fans, who are the lifeblood of the game, returning to matches any time soon,” said Clarke, who has agreed an annual budget cut of £75 million. “In a worst-case scenario, this would be necessary for the next four years to offset a £300 million deficit,” he said. – Guardian