Financial fair play rules in the Championship could undergo a 'radical overhaul'.
At present, clubs in the second tier have a £39million threshold for losses over a three-year period. Exceeding this limit comes with punishments, including possible points deductions. Now, a report by the Telegraph claims that this method will be replaced by cost controls similar to Uefa's new plan to keep expenditure within 70 per cent of revenue.
It says talks are ongoing between the Premier League and English Football League (EFL), with both awaiting the Government's verdict on the Tracey Crouch review of regulation before making any changes. Rick Parry, chairman of the EFL, told the publication: "We're totally committed to both - better regulation, but provided it goes hand in hand with a rethink on distribution."
Parry says the Government, in deciding on how to back a fairer model, must keep clubs' community involvement in mind. The past week has seen all 72 clubs in the EFL take part in their "Week of Action" which pushes community causes to the forefront.
Parry added: "We say that it is not just a footballing argument to change the model - it's a levelling up argument for Government. What the Week of Action reinforces is just how important all of our clubs are within their communities."
Hinting that the EFL will fall in line with Uefa, whose rules state that a club’s total expenditure on transfers, wages and agent fees cannot exceed 70 per cent of its revenue, he added: "We will be therefore refining in conjunction with the Premier League our own profit and sustainability rules, which don't work in the Championship because clearly clubs are neither profitable nor sustainable."
Earlier this season Parry called for the scrapping of parachute payments and asked for a fairer share of TV revenue for the 72 clubs. He wants the rights for the EFL to be sold alongside the Premier League, with the former getting 25 per cent of the revenue. Parry argued that this would help remove the “cliff edge” which exists between the top flight and the second tier.
He said: “This is absolutely not about the EFL looking for charity from the Premier League, nor is it the EFL versus the Premier League. It’s absolutely about the sustainability of every club, the purpose is making clubs sustainable and that needs two things – redistribution of revenues and better financial regulation, it’s a very simple recipe.”
This season has seen both Derby County and Reading handed points deductions, with the former entering administration and the latter breaching financial rules. It is claimed that a clutch of other clubs in the second tier, including Middlesbrough, Bristol City and Stoke, are also walking a financial tightrope.
