Premier League and EFL See Eye-Eye In $330m Bailout Package

The Premier League (EPL) and English Football League (EFL) have finally come to an agreement on a rescue package totaling £250 million ($330 million) to help offset the calamitous financial impacts of Covid-19.

After months of negotiations, the Premier League and EFL have finally settled on the figures. A £200 million ($268 million) interest-free loan will be made available to the 24 Championship clubs (England’s 2nd division) and a £50 million ($67 million) grant will be made available to clubs in Leagues One and Two (England’s 3rd and 4th divisions).

EFL Chairman Rick Parry has welcomed the deal saying that it was a “tangible commitment to the professional game at a time when it has needed it most”. The Premier League will pay up to £15 million ($20 million) to help secure the £200 million ($269 million) loan for the EFL. The loans are capped at £8.33 million ($11.2 million) per Championship club and must be repaid by June 2024.

The £50 million ($67 million) package for Leagues One and Two will be split into two parts – £30 million ($40.3 million) will be paid to the clubs based on lost revenue on gate receipts from the 2019-20 and 2020-21 seasons. The additional £20 million ($26.9 million) will be ‘monitored grants’ which will only be repaid if the recipient club breaches rules on wages and transfer spend.

In October, the Premier League only offered £20 million ($26.9 million) in grants with an additional £30 million ($40.3 million) coming in the form of loans. EFL clubs rejected the offer for Leagues One and Two saying that it “falls some way short” of the required amount. Due to EFL clubs already carrying heavy debts, the EFL asked the Premier League if the £50 million ($67 million) total would be made available to all in the form of grants that has now finally been agreed.

Clubs in League One will receive a minimum payment of £375,000 ($504,000) whilst League Two clubs will receive a minimum payment of £250,000 ($336,000). The remaining £15 million ($20 million) will be distributed based on a lost gate revenue share calculation.

“Our overarching aim throughout this process has been to ensure that all EFL clubs survive the financial impact of the pandemic. I am pleased that we have now reached a resolution on behalf of our clubs and as we have maintained throughout this will provide much needed support and clarity following months of uncertainty,” said Parry.

“I would like to thank [chief executive] Richard Masters and [chairman] Gary Hoffman for their efforts on behalf of the Premier League, and of course their shareholders, for making this welcome, tangible commitment to the professional game at a time when it has needed it most.”

Masters said, “The Premier League is a huge supporter of the football pyramid and is well aware of the important role clubs play in their communities. Our commitment is that no EFL club need go out of business due to COVID-19.

“All football clubs continue to suffer significant financial losses as a result of the pandemic, but Premier League Shareholders today unanimously agreed to provide additional funding and support for EFL clubs in real financial distress.

“We are very pleased to have reached this agreement and we stand together with the EFL in our commitment to protect all clubs in these unprecedented times.”

Soccer fans across the UK have been unable to attend live matches since March due to Covid-19 but a limited number of people were allowed back into stadiums on Wednesday following the end of national lockdown and the implementation of the UK’s coronavirus tiering system.

The impact of Covid-19 and the fact that fans have not been allowed into stadiums has caused a disastrous impact on the financial health of EFL clubs. With matchday revenue being the primary source of income for EFL clubs, they have been hit hardest.

The agreement has come two days after a parliamentary committee heard that 10 EFL clubs were struggling to pay wages. The EFL and Premier League came to the final approval of the agreement after the EFL board voted to take the money on offer in a meeting on Thursday. The clubs in Leagues One and Two who are struggling the most financially will be able to access the money immediately.

EFL culture secretary Oliver Dowden has said, “I warmly welcome this deal between the Premier League and the EFL which provides up to £250m support to help clubs through Covid”.

“Fans are starting to return and we look forward to building on this as soon as it’s safe.

“With a £250m support package for men’s elite football and £300m government funding for women’s football, the National League and other major spectator sports, we have fuel in the tank to get clubs and sports through this.”

Julian Knight MP, chair of the Digital, Culture, Media and Sport Committee, said he welcomed the rescue package but criticized the delay in agreeing the deal, adding: “This fiasco is evidence of a lack of accountability within football’s governance structure.”