A Blueprint For Football’s Future
EFL duo deliver lifeline plea
Rick Parry and Trevor Birch have tackled some top jobs in their time, but the one they’re facing now is almost certainly the toughest. Win, lose, or draw, it could change the face of football in this country forever.
Along with what they hope will be a little bit of help from the Government, the chairman and chief executive of the English Football League are hoping to persuade the Premier League to hand over £1billion as part of a reformed financial package for the 72 EFL clubs Messrs Parry and Birch represent, most of whom have, in one form or another, taken life changing hits over the last 14 COVID stricken months and who Birch says are “obviously suffering”.
The EFL has revealed its blueprint for the future following the Premier League’s move to extend its domestic TV rights deal worth around £5.1bn until 2025, but which also includes giving £1.5bn to football’s wider pyramid over the same period.
What the EFL wants them to do is pool the media revenues, add the millions the PL gives in parachute payments to the three teams relegated every season, then give 25 per cent of the overall total to help the 72 clubs below them.
Following widespread rejection of European Super League proposals and the subsequent support shown for the pyramid, the EFL has responded to the Premier League’s TV deal extension and publicly lamented what it believes to be a “missed opportunity for the Government to obtain a commitment from the Premier League to address the financial imbalance that exists between the top division and the rest of football”.
It is an issue Rick Parry believes needs to be addressed urgently. He says: “The Premier League has a media deal worth in the region of £3bn annually. By comparison, and taking into account streaming, the EFL generates approximately £155m per year. The EFL want the lot in one pool from which they would get 25 per cent of the total pot.
“Bury started this debate and sent shockwaves, and that could happen again with the current model when millionaires come in and then get fed up with subsidising,” he claims. “We will find a way of surviving, but now we have a fantastic opportunity to put things right for the longer term which will give us a better and even stronger future for English football.”
It’s a tall order by any standards, but it’s one that MP Tracey Crouch will be considering when she leads her review into football and its governance later this year.
The Government aim of that review is to “explore ways of improving the governance, ownership and financial sustainability of clubs in English football while building on the strengths of the football pyramid”, a move accelerated after the ill-fated attempt by the so called ‘super six’ to join a breakaway European elite league.
But the EFL’s ‘shopping list’ for change is far more far reaching. Apart from that bigger handout from the Premier League, the EFL advocates:
SCRAPPING parachute payments and giving that money to spread over the Championship and Leagues One and Two.
CONTROLLING spending, particularly by Championship clubs, to prevent them getting into financial difficulties.
TIGHTENING rules over ‘fit and proper’ ownership tests to reduce the risk of club owners suddenly changing their minds and leaving clubs in chaos.
Parry, ironically a leading figure in the formation of the breakaway Premier League in 1993, is once again a major advocate for change.
He says: “It’s been a long 14 months, and now there is a need for a financial reset. I have no problem with the Premier League signing a new TV deal. We would have done exactly the same. But it highlights the necessity to start afresh and secure the long term financial health of the 92 clubs. It is that ever changing nature of the pyramid that is important; that’s what we have to preserve.
“We have parachute payments that are an absolute distortion, then we have the chasm between the Championship and the PL. It’s becoming unbridgeable when the bottom club in the PL is making nearly £100m but the top club in the Championship is making £8m.
“That and the parachute payments lead to irrational behaviour in the Championship. Wages 107 per cent of turnover, debts of £1.1bn, annual owner funding of more than £400m. It’s neither profitable nor sustainable.
“It’s not just that we want more for the 72; it’s an unequal illogical balance. We have been saying that for 12 months. Covid became a distraction, but now is the time to reset. Covid has highlighted that, but it hasn’t sent it away. This was an issue that needed to be grasped before Covid.”
Parry’s big point, and one he is particularly passionate about, is that this is a story that isn’t just about two brands – one that is arguably the most successful in the world and the other that is struggling right now, even though they’re playing the same game in the same country.
“It’s not about two different brands, two different competitions,” he continues. “It’s about the Pyramid. You have to have the Pyramid; you have to have the dreams and the hopes,” he says.
“What we have in financial terms is an upside-down pyramid, and they tend to fall over. We need a more solid base. I was there at the start of the PL. The idea of the PL was not to kill the Pyramid, but to make a success at the top, and that has undoubtedly happened. The idea wasn’t to kill off the rest of the game.
“If you look at the first year in 1993, the PL’s turnover was £45m and the EFL’s was £34m, so not a significantly huge difference. Nobody is knocking the PL as the most successful competition in the world. I don’t begrudge them that, but it is about the health of the Pyramid, and if we are to preserve that and preserve competition then some of that money needs to be distributed more fairly.”
According to Birch – a former player-turned-Chief Executive with a CV that spans clubs across the Premier League and EFL – the path forward needs to have controls on spending with an emphasis on making clubs sustainable.
CONTROLS must go hand in hand, he insists. “There’s clearly a requirement for increased revenue, but as we’ve been saying that is no good if that goes out the door as quickly as it comes in. There has to be some form of cost control and this remains high on the agenda for the League and the clubs across all three divisions.”
Messrs Parry and Birch speak as one with a word they believe matters to all 92 clubs, not just those in the EFL. And that word is sustainability.
Parry added: “We had a hard cap in Leagues One and Two, but we had to come away from it because of procedural problems and the Professional Footballers Association challenged it. The principle was accepted in the Championship and there was a lot of discussion about the amounts, but a hard cap poses challenges in the Championship. There are issues whether it would make clubs non-competitive, so we paused and there is a lot of debate now about moving ahead with some sort of percentage cap. There is an absolute commitment to move forward on this as soon as we can. Categorically we can, and we will.”
CURBS on wealthy owners potentially trying to buy success and leaving chaos in their wake as fewer wealthy rivals try to keep up with them is also very much on the agenda.
“It’s challenging,” The EFL Chairman admits. “The problem with the existing test is that some owners might well have the resources, they might very well be right and proper people, but what happens if they change their minds?
“Look at Wigan. They (the owners) had the money, passed the test, and then decided ‘we don’t want to this anymore.’ Making sure that the commitments are real as opposed to promises. If you have redistribution it reduces the risks that come with this threat.
“We don’t want to stifle ambition,” Parry insists. “We want big clubs. We don’t just want small clubs throughout the EFL. But if we have reasonable limits on cost control, they will not have to spend all their wealth. The other point re owner contributions is that there cannot just be promises that are never fulfilled, so there has to be evidence of liquidity.
“We are not trying to bring everybody down to the lowest common denominator. It is all about sustainability and recognising that not everybody has a fortune to spend. This isn’t just about every club rising from the Championship to the Premier League it is about enabling clubs to rise from non-league to the Championship.
“We can’t have a system for success that relies on every club finding billionaires. It just won’t work. Across the leagues as a whole we are reliant on the generosity of owners who put in more than £400m into the EFL in a normal year. Their contributions this year have been phenomenal.
“But if you look at the reverse. Look at Bolton. They were flying in the Premier League when Eddie Davies was there, but then suddenly he was not; everything went wrong, and they went right down to League Two. Now they’re all sorted and coming back up again. Blackburn Rovers with Jack Walker. Phenomenal success: they win the Premier League and then Jack’s money is no longer there, and they were facing liquidation. We need more than billionaires to solve the problems; we need sustainability.”
Parry refuses to put all the blame on Covid for the EFL’s current crisis. “Covid is a short-term crisis,” he believes. “This is about the long-term. We’ll deal with that, and hopefully Tracey Crouch’s Government review is going to deal with this.
“I’ve given you the template. Dead simple. 25 per cent from the media revenue pool, scrapping parachute payments, halving of the gap; all of our clubs become sustainable overnight, and clubs don’t have to stare into the abyss when they’re facing up to relegation.”
While the long-term plan is clear Trevor Birch desperately hopes that new variations of Covid do not kill off their dream of a return of fans and full stadia in the process after a monumental effort by clubs to complete the season.
“The clubs have just come through a year without crowds so they’ve obviously been suffering; we’ve seen the losses that are coming out in the annual accounts and they show that clubs are making losses, understandably given they are playing behind closed doors.
“They have put up with a lot of fixture disruption and they’re all to be applauded for the efforts they have made. Clubs have adhered to the protocols, the number of positive tests dropped off the cliff, and that’s testament to the professionalism they have brought to the season.
“We have been reliant on a number of things; supporters supporting their clubs, and financial assistance from the Premier League,” Parry admits. “Clubs have also made use of certain help from the Government in terms of HMRC not pursuing enforcement provisions. There have been rent holidays, some furloughing, some deferrals and all of these have combined to assist clubs in getting through what has been a traumatic period for them.”
In the short-term, pursuing a return of fans to EFL stadia remains top of the in-tray for the EFL with Birch bullish about the League’s aspirations for a full return of supporters come August.
“The EFL’s aim is to begin the 2021/22 season with full stadia, and we are keen to do all we can with Government and other stakeholders to achieve that aim,” he says. “We’re following the Government road map, and currently 21st June is when life should be back to normal and by the start of next season we hope to be back to full capacity. But we’re not blind to the fact that there may be local outbreaks, and we are working hand in hand with clubs and authorities. We are doing everything we can.
“In a normal season we put on roughly 2,000 games and know how to deal with large crowds and we will use that experience to help fans return safely.
“We recognise that all public health concerns must be considered, but we believe that we can help find solutions that will enable supporters to return to football grounds and other sectors in wider numbers.”
If that doesn’t happen, match streaming services, one of the few successes of the lockdown, will be there to ease the pain. Fans paying to watch matches on their laptops has enabled clubs to recoup some income in the absence of gate receipts and crucially has also helped protect any refunds that have had to be given to season ticket holders.
“The support of fans has also been phenomenal,” Birch added. “Streaming will continue, and depending on where we end up with crowds we may be required to look at a hybrid model if we’re not back to full capacity. But our aspiration and focus is quite clear; we want and need to be back with full crowds from next season.”
So, when do the EFL’s would-be saviours hope to see a large bright light at the end of the tunnel?
“The hope is as soon as possible,” says Parry. “We have been saying this for 12 months. It’s not a response to lockdown; we were saying this before lockdown. We have been distracted by lockdown, but hopefully Tracey will report by the autumn. The sooner we can bring about long term change the better.’’
Then the pair signed off with a message of hope and gratitude to the clubs and fans who have kept the game alive and helped keep their communities going during unprecedented times.
“They deserve a big thank you for all the efforts they’ve made, particularly in their communities. We tend to just think about money, but we’ve also seen phenomenal examples of how these clubs have responded despite all the challenges they have faced; going to extraordinary lengths to provide support in their communities. It really is humbling. Port Vale delivering 300,000 meals, others supporting the NHS, helping with mental health. Building a great bond with supporters.
“They are all to be applauded for their efforts during what is probably the biggest challenge football has ever faced; the first lockdown we have ever faced since the Second World War.
“Even so, we face the future with a mixture of optimism and realism. Life will go on.”
By Colin Mafham
This article appears in the latest issue of fcbusiness magazine. Subscribe today: www.balticpublications.com