Premier League and EFL Rescue Package
The Premier League and EFL have finally agreed the details and fine print of a rescue package to safeguard the futures of teams in the EFL, who have lost vital revenue streams, most notably gate receipts, due to the Covid-19 pandemic.
The football bodies issued a statement (see below) to outline two separate packages – one for League One and Two clubs, and another relief facility for Championship clubs.
The relief package will provide a combined fund of £50million for League One and League Two Clubs, with £30million to be paid to all 48 Clubs as a grant and a further £20million available on application as a ‘monitored grant’.
The Premier League has also agreed to provide a payment commitment of up to £15m to cover interest, arrangement fees and professional fees to allow the EFL to secure a £200m loan facility that it will then on-lend to Championship Clubs interest free.
The Key Take Aways
- A £30million grant to be paid immediately from the Premier League to EFL Clubs for distribution based on lost gate receipts in respect of the 2019/20 and 2020/21 Season.
- Each Club will receive a minimum payment of £375,000 in League One and £250,000 in League Two.
- The remaining £15m to be distributed using a lost gate revenue share calculation, which will be approved by both the EFL and the Premier League.
- In addition, a further £20m ‘Monitored Grant’ is to be provided with Clubs able to apply for it based on ‘need’, with a joint EFL and Premier League panel to determine Club eligibility.
- Clubs subsequently in receipt of a ‘monitored grant’ will be subject to certain restrictions, in respect to transfer spend and player wages.
- Clubs who keep to the restrictions will not have to repay any of the funding required, whereas for Clubs in breach, the ‘monitored grant’ becomes repayable by the Club.
- Any Club in receipt of a grant or monitored grant payment will be required to continue to maintain compliance with the EFL’s financial regulations.
- The loan facility is provided to support Clubs in the Championship to meet PAYE liabilities up to the end of 30 June 2021.
- Loans are capped at £8.33m per Championship Club with monies received to be repaid by June 2024 using Premier League solidarity receipts or other central Premier League or EFL Distributions.
- This fund is not available to any Club in breach or suspected breach of EFL Regulations and Clubs will again need to submit evidence in their applications to Club eligibility.
- Any Club in receipt of a loan payment as detailed will be required to continue to maintain compliance with the EFL’s financial regulations.
EFL AND PREMIER LEAGUE STATEMENT: RESCUE PACKAGE AGREED
The EFL and the Premier League have today concluded negotiations on a rescue package and distress fund to address the immediate financial challenges faced by EFL Clubs arising as a result of the Covid-19 pandemic.
A fund of £50m in the form of a grant and monitored grant payments has been agreed for League One and Two Clubs while the Premier League will provide a further financial commitment to assist the EFL in securing a £200m loan facility that Championship Clubs will be able to utilise interest free.
Premier League Clubs have given their final approval to the agreement at today’s shareholder meeting and this followed earlier approval of the deal by the EFL Board, acting on behalf of its membership.
EFL Chair, Rick Parry, said:
“Our over-arching 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.
“I would like to thank Richard Masters and 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.”
Richard Masters, Premier League Chief Executive, said: “The Premier League is a huge a 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.”