Second tier clubs facing ‘impossible’ cash woes
THE English Football League has expressed its concern over the “perilous financial state” of the Championship.
The governing body made the admission after it was confirmed yesterday that the Premier League had extended its broadcast deal from 2022 to 2025, worth £4.7bn.
Within the deal, £100m will be distributed across the game including to League One and Two clubs.
But the EFL want a fairer distribution of domestic broadcast money and the abolition of parachute payments.
An EFL statement read: “The EFL notes the Government has today approved in principle a renewal of the Premier League’s domestic broadcast arrangements and welcomes the increased funding that is to be made available for Leagues One and Two in the EFL.
“However, it is important to acknowledge that the current media rights deal will preserve the status quo of an unbalanced, unsustainable, and unfair financial distribution model across English football which continues to cause serious financial issues throughout the football pyramid, while continuing to distort competition between clubs and threaten the long-term viability of EFL competitions and clubs in the Championship, League One and League Two.
“Championship clubs in particular face impossible economic pressures, seeking to gain promotion to the Premier League, which has in turn led to untenable financial speculation and irrational behaviour.
“With combined losses of £600m over the last two years, it remains in a perilous financial state, and for the first time in its history the EFL recently had to borrow £117.5m from an external financial institution to provide working capital for a majority of Championship clubs to enable them to survive the pandemic.’’
The statement adds: “While we recognise the attempts by the Government to increase the level of solidarity provided to League One and Two Clubs through this process, what is more urgently required is a fundamental reset of the game’s financial model – both in terms of fairer distribution of monies at all levels and sensible, realistic cost control measures.”