Sunderland AFC news: EFL chairman outlines plans that could impact Kryil Louis-Dreyfus

EFL chairman Rick Parry has backed the English footballing body to make changes to the ‘irrational’ financial problems in the Championship ahead of the Government’s White Paper publishing later this week. The White Paper was previously expected to be published earlier this month in response to the recommendations made by the fan-led review issued in November 2021.

The White Paper has been highly anticipated since the fan-led review became part of the Conservative Party’s manifesto for the 2019 General Election, with Conservative MP and former Sports Minister Tracey Crouch announced as the review panel’s chair. Its publication will be met with relief after months of delays, which its initial schedule set for last summer.

It has been reported that the White Paper is expected to support the creation of an independent regulator to help impose a financial distribution settlement on the Premier League, EFL and the Football Association. They are then likely to operate a licensing system to ensure clubs are run sustainably and look to bridge the gap between the top two tiers in English football.

Speaking ahead of the White Paper’s publication, Parry revealed that the EFL are eager to make changes to the ‘irrational behaviour’ in the Championship as clubs ‘chase the dream’ of reaching one of the best leagues in the world. Parry said: “A severe and big challenge for us is that we have a huge, irrational behaviour in the Championship. Wages are 125 per cent of turnover, with losses in excess of £300 million. Owner funding every year is around £400 million and debt is at £1.7 billion.

“Problems are immense and it’s because owners are having to chase the dream. Owner funding averages £600 million per club in the Championship - it’s the most expensive lottery ticket on the planet and that’s what we say has to change.”

One solution it appears the EFL will look at is eliminating parachute payments and redistributing them, while also splitting the television revenue 75 per cent to 25 per cent in the Premier League’s favour. Top flight clubs dropping down to the Championship rely heavily on the parachute payments to help them make a swift return, with each club receiving around 55 per cent of the amount that they would receive as part of an equal share of broadcast revenue, reduced to 45 per cent in the second year and 20 per cent in the third. This often results in the likes of Norwich City, Fulham and Watford becoming ‘Yo-Yo’ clubs.

“We would hope to have a situation where the gap between the top and bottom would reduce from around £90 million to about £44 million,” Parry added. “By definition, that means you don’t need a £44 million parachute. You have actually solved the problem and it’s a much fairer system. It’s not a catastrophe of promotion or relegation.”

It was reported following Sunderland’s relegation from the Premier League in 2017 that they would receive a total of £91 million in parachute payments - £42m arriving in their first season, £34m in the second and a final payment of around £15m the third season. The Black Cats had already dropped down to League One by the time they had been given the second payment.