Premier League advised to agree new financial arrangement affecting Manchester United and Man City.
The Premier League and EFL have received a caution that failing to reach a consensus on a fresh agreement regarding funding and expenditure controls may result in the intervention of an independent regulatory body, directly impacting clubs such as Manchester United and Manchester City.
Anticipating the forthcoming shareholders’ meeting on March 11, the Premier League aims to propose a revised offer to the EFL.
Culture Secretary Lucy Frazer emphasized the government’s preference for football to devise its own resolution.
However, she underscored that the new regulatory body will possess ‘backstop’ authority to intervene if negotiations yield no agreement.
Frazer, speaking at the Financial Times Business of Football Summit, stressed that the leagues have the opportunity to devise a mutually beneficial arrangement. She stated, “They can come to a deal that works for them and that is the right solution – if they don’t, the regulator will. It’s in their interests to do this.”
She also emphasized that the specifics of the deal are not within the purview of the government, expressing confidence in the negotiation capabilities of both leagues.
Frazer disclosed that she has engaged with all clubs and emphasized the importance of reaching an agreement that serves their interests.
Several sources from EFL clubs characterized a meeting with Frazer in early February to PA as highly problematic, feeling pressured to accept the Premier League’s offer.
They expressed skepticism about the regulator reviewing the deal, should it be finalized, to ensure its contribution to the sustainability of English professional football.
Rick Parry, the EFL chairman, informed MPs last month that he believed an independent analysis by the regulator was necessary to find the “right solution.”
Championship clubs are anticipated to adhere to a new regulation limiting player costs to 70% of their income, akin to practices in Europe.
However, negotiations have stalled over the provision allowing relegated Premier League teams to spend 85% of a larger amount, which has become a contentious issue.
The proposed six-year deal could potentially provide EFL clubs with an additional £900 million.
Andy Burnham, the Mayor of Greater Manchester, asserts that Everton’s recent points deduction underscores the immediate need for an independent regulator in football.
Everton faced a 10-point deduction from an independent board for breaching Premier League financial rules. The penalty has since been reduced to six points following an appeal. Frazer clarified that a new regulator would not intervene in cases like Everton’s.
“That wouldn’t fall under the regulator’s jurisdiction,” she clarified. “We aim to leave such matters to football authorities, while the regulator’s focus remains on financial stability. Points deductions would not be within the regulator’s scope.
Our priority is to uphold the Premier League’s status as a fantastic, world-class institution, serving as a significant cultural export. We recognize football’s global influence and strive not to compromise it.”
Premier League advised to agree new financial arrangement affecting Manchester United and Man City.