The major financial changes potentially looming for Sunderland, Leeds and Championship rivals
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EFL chairman Rick Parry has told an event at the Tory party conference that Championship clubs are faced with deciding whether they 'want to be sustainable or competitive' as talks with the Premier League over a new financial deal continue.
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Hide AdFootball League clubs met last week to discuss the latest proposals from the Premier League, with no final agreement in place at this stage.
The talks over a new Premier League funding agreement are taking place as the move towards the introduction of an independent regular takes place, with the government introducing its white paper earlier this year. The EFL strongly supporters the proposal, believing it will improve governance in the game after numerous ownership issues right across the pyramid in recent years.
The Premier League are understood to have offered an increase in the funding it presents to the football league, understood to be in the region of an additional £900 million.
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Hide AdWhile that proposal is clearly attractive to EFL clubs, there remains an impasse over parachute payments. The EFL are eager to see them eradicated entirely, believing that they distort the competition by forcing clubs to overspend in a bid to maintain competitiveness with the clubs relegated from the Premier League. The EFL have pushed hard for a system whereby additional funding is distributed on a merit basis.
The Premier League are determined to keep them in place, their view being that they are essential to allowing teams to invest after winning promotion and thus keep the division competitive. The Premier League believe this competitiveness is essential to maintaining broadcast interest and therefore the very source of funding being redistributed.
Parachute payments look set to continue as part of the new deal given the Premier League's firm stance, but there is an additional gap between the two parties on cost controls. The EFL are eager to overhaul the Championship's current Financial Fair Play rules, which currently limit club's losses over a three-season period. Their preference is to bring in a system where club's wage spending is limited as a percentage of their revenue, bringing the second tier into line with Leagues One and Two as well as the European game.
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Hide AdAs part of the current proposal on the table from the Premier League, relegated clubs would continue to be able to spend 85% of their revenue on squad costs, which the EFL believes to be too high and will therefore not address the major financial issues across the pyramid, where the vast majority of clubs are solvent only because of owner funding.
As part of the new deal, there could be changes to the footballing calendar, with the abolition of the second leg of the Carabao Cup semi finals and increase in EFL Trophy games heavily touted.
The EFL confirmed in a statement that they will now consult with EFL clubs in smaller groups, before returning to talks with the Premier League in a bid to seal the deal.
A representative of the Department for Culture, Media and Sport also attended last Thursday's meeting to offer an update on the proposed introduction of an independent regulator.
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