(WFI) The English Premier League announces a £372 million ($591m) funding package for the Football League in solidarity and parachute payments to its clubs.
It is worth £124m per season for the next three seasons, meaning each Championship club – those in English football’s second tier – will receive £2.2 million per year, with League 1 club’s getting £335,000 annually and League 2 clubs £225,000.
Clubs relegated from the Premier League will receive increased parachute payments of about £48.4 million over four years, a move designed to soften the blow of dropping out of the top flight.
Today’s announcement was contingent upon approval of a raft of regulatory changes being passed at the Football League’s EGM held at Derby County’s Pride Park Stadium. The EPL had asked for certain regulations to be aligned with its own stringent rules, including transparency of ownership.
New and amended rules agreed at the Football League’s EGM today cover changes to financial reporting procedures, ground criteria, the Owners’ and Directors’ Test, the public disclosure of club ownership, third party interests in players and players’ contracts.
Leeds United is among the clubs who will be forced to disclose the identity of its owners. Ken Bates, the outspoken chairman of Championship club Leeds United who lives in Monaco as a tax exile, will have to reveal the club’s offshore owners who have for so long remained a mystery.
On July 24, Leeds United moved to clarify the make-up of their ownership structure but did not name names. A statement on its website said Leeds United was owned by Leeds City Holdings Limited. LCH has five shareholders, four of these hold 27.15% collectively. FSF Limited holds 72.85% of the shares.
Commenting on today’s announcement, Premier League chief executive Richard Scudamore said: “The Premier League clubs felt strongly that a stronger Championship would be greatly beneficial to both competitions.
“It is a fact of life that we welcome three of their number each season and helping make sure those clubs coming up are prepared – both on and off the pitch – for life in the Premier League was something we felt these measures would achieve.”
He said the extra revenue for the 72 Football League sides over the next three seasons “will make an enormous difference to the individual incomes of those clubs, but more importantly will make planning for the future that much easier”.
Football League rule changes
Among the key regulatory changes rubberstamped by Football League clubs at their EGM on Wednesday were: the requirement to publish the identity of any individuals owning 10% or more in any
club; absolute prohibition of ‘third party interests’ in players; and a new standard player contract in line with the one used by the EPL.
Other rule changes concern improvements to the Owner’s and Director’s Tests. Clubs will have to create an annual reporting process for all directors and provide prior disclosure of new directors and prohibit persons taking up such roles until clearance is received from The Football League.
Additional financial reporting requirements for Championship clubs include the provision of ‘future financial information’ relating to the subsequent season. Clubs must also demonstrate they have no overdue transfer fees, compensation fees, key employee wages or PAYE/NIC. Clubs in default or clubs with business plans that cast doubt on their ability to fulfil fixtures or pay football creditors will be required to submit to budget constraints including possibility of transfer embargo.
The change of ownership of more than 30% of club will trigger fresh reporting requirements.
Commenting on the new regulations, Football League chairman Greg Clarke said: “I am pleased that our clubs have today supported new and revised regulations that further strengthen the professionalism and good governance of The Football League.
“The season ahead is an important one for the league and its clubs as we seek to continue our recent growth.
“Centrally, we will be doing everything possible to support our clubs through a difficult economic environment and to encourage more and more fans to enjoy the fantastic product offered on the pitch by all 72 Football League clubs.”
Scudamore said he believed that “a stronger, more closely aligned set of rules for the Premier League and Football League will serve English professional football well”.
“Having common rules in areas such as player contracts, third party ownership of players, and public disclosure of club ownership is something we have worked towards for a number of years and we are pleased that the Football League have voted them in today.
“The Football League solidarity package, combined with our new £6m funding of the Football Conference and our ongoing £15m per season commitment to the Football Foundation shows that we take our responsibilities to every level of the game very seriously.”
By INSIDER editor
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