Premier League to agree £130m-a-season New Deal despite Championship club anger

The Premier League and English Football League are set to shake hands within weeks on football’s £130 million-a-year “New Deal”, despite Championship club anger over new cost controls.

Two second-tier clubs have protested privately over fresh terms which allow relegated Premier League teams to maintain spending powers above new Uefa limits. In addition to receiving parachute payments, sides to go down will be allowed to spend on wages and transfers at 85 per cent of revenue. That level of spending was secured initially to allow smaller clubs in the top tier to compete with the so-called Big Six as Uefa’s new 70 per cent cap began.

Existing Championship teams, however, will be restricted to 70 per cent in return for receiving increased solidarity payments. To counter concerns of unfairness, the EFL has negotiated an “equity top-up” as part of the deal. One source estimates that add-on would amount to another 20 per cent of spending. “Not all clubs know the detail but there are understandably some that have gone off the deep end,” said one insider. “The Championship clubs are trying to be responsible rather than just blindly accepting the cheque. I’m not sure that spending 90 per cent is entirely sensible.”

Despite reservations, there is broad support elsewhere in the game at the new solidarity system to fend off more radical restrictions brought by an independent regulator. Despite concern in the Championship, new limits of 90 per cent would be a significant improvement on averages of 110 per cent in the division in recent years.

With the Football Association also consulted, the biggest financial shake-up in decades has been years in the making. It was just one club vote away from being delayed again last November when the final package was put to shareholders. However, the final details will once again be talked through to the clubs at a west London hotel on Thursday, before final talks take place with the EFL. One insider said the deal is now “on the runway” while another source said it was fully expected that Championship, League One and League Two clubs will finally agree on the package.

“Pragmatically, I think we’ve got to go for it,” said one well-connected EFL source. “The regulator’s coming but it’s going to be two or three years away. It’s better to have something now than nothing.”

EFL clubs are set to be given an update on the proposals at a meeting on Sept 28. No snap decision is expected but an agreement is said to be “weeks rather than months” away. The EFL had initially been seeking 25 per cent of pooled media revenues from the Premier League in the new financial settlement. In addition to that, it sought the abolition of parachute payments and the introduction of merit-based payments in the Championship whereby the club finishing top would earn twice as much as the one at the bottom, with the same ratio applied to the Premier League.

It was argued that all those measures combined would reduce the “cliff edge” between the Premier League and the EFL. However, the Premier League is understood to want to maintain its ratio of the 1.8 to one within the “New Deal”’, which alongside the continued presence of parachute payments make this a settlement which clubs will have to think long and hard about before accepting.

Campaign group Fair Game has criticised the focus on payments based on league position, saying they “increased the incentive to overspend”. Arsenal, Chelsea, Liverpool, Tottenham Hotspur and the two Manchester clubs previously queried the method behind a sliding scale of how much they would contribute to the overall costs.

Premier League clubs will also discuss domestic TV rights as executives begin the tender process this autumn.