Patience ‘wearing thin’ as Premier League’s New Deal stalls

Government patience is said to be “wearing thin” on the Premier League’s long-awaited New Deal as clubs remain at odds over how to foot the bill.

After years of talks, there remains some division over pay for the pyramid rescue package, with some clubs now proposing it is paid entirely via a transfer levy.

A model linked at least in part to merit payments appears to be the most likely as a compromise is reached in the coming weeks. Once that is agreed, the Premier League also needs to get final approval on spending limits for relegated clubs in the Championship before announcing its £130 million a year package.

However, one senior source in Government expressed frustration at the failure to reach agreement after another round of lengthy talks between clubs on Tuesday.

The league is under some pressure to finally get a deal done to ward off a more restrictive alternative model which inched closer when the new independent regulator for English football was outlined in the King’s Speech earlier this month.

Those inside the room at the latest meeting described the meeting as “cordial” and “constructive”, but there remains some disagreement over the model in which clubs hand over the money.

Several smaller clubs complain a sliding scale payment system based on merit alone would leave them paying a much higher proportion of their revenue into the solidarity pot.

Manchester City, for instance, could be paying as little two per cent of its revenue, which could equate to around £15 million. That figure is dwarfed by club revenues soaring to a record £712.8 million this year, almost £100 million more than the season before.

City, Manchester United, Liverpool, Chelsea, Arsenal and Tottenham Hotspur have often been at odds with the other clubs over how the new solidarity system should be paid for.

Last year they were outvoted after initially proposing those playing in Europe should not have to contribute more, and each club’s contribution should strictly mirror their Premier League income.

Although some clubs claim the entire deal could be “zero cost” if it was paid for via a transfer tax, there is concern elsewhere that such a strategy could be too vulnerable to market fluctuations.

A transfer levy of sorts in addition to the traditional formula of relating contributions strictly to prize money is seen by several insiders as the most likely outcome.

Cheques in the region of an extra £90 million this season, an extra £100 million next season and then an extra £170 million the season will eventually be handed over by the clubs. As part of the vision, Championship clubs will get the lion’s share, with League One and Two clubs sharing around 30 per cent. Caveats are aimed at curbing so-called “Wild West” spending, which has been at up to 110 per cent of revenue for the second tier in recent years. 

Existing Championship teams will be restricted to as little as 70 per cent expenditure as part of the deal, although the EFL has negotiated an “equity top up”, which could amount to another 20 per cent of wiggle room. Relegated clubs, who benefit from parachute payments, are likely to have their limits on wages and transfers at the slightly higher immediate threshold of 85 per cent although that stipulation has yet to be finalised.