English Football League (EFL) and Premier League have agreed a £250m rescue package for EFL clubs which aims to address immediate financial impact of the Coronavirus pandemic.
Leagues One and Two clubs will be given a £50million grant plus monitored grant payments with the Premier League providing ‘a further financial commitment’ assisting the EFL in securing a £200m loan facility for Championship teams to access interest free.
This announcement comes after Premier League clubs approved the deal at a shareholder meeting following earlier approval of the deal by the EFL Board, acting on behalf of its members.
EFL Chair, Rick Parry welcomed this decision, saying; “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.
Parry also praised the Premier League and their shareholders for “making this tangible commitment to the professional game at a time when it has needed it most.”
That sentiment was echoed by Richard Masters, Premier League Chief Executive who said; “The Premier League is a huge 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.”
Masters also iterated that the Premier League will “… stand together with the EFL in our commitment to protect all clubs in these unprecedented times.”
How Will Grants For Leagues One and Two Clubs Work?
Teams in the third and fourth tiers of English Football including Lincoln City, Sunderland and Salford City to name a few will receive a £30m grant based on lost gate receipts in respect of 2019-20 and 20-21 seasons, with League One clubs receiving a minimum payment of £375,000 whilst those in League Two will be given £250k at minimum.
The remaining £15m will be distributed via a lost gate revenue share calculation which must be approved by both the EFL and Premier League, whilst a ‘monitored grant’ of £20m available on application on basis of need with a joint panel across EFL and Premier League to determine club eligibility.
Clubs who find themselves receiving a ‘Monitored Grant’ will be subject to specific restrictions relating to transfer spend and player wages, with those abiding by those restrictions not required to pay back any of the funding unlike those who breach the restrictions and will be forced to repay back the loan.
All clubs in receipt of a grant or monitored grant will however be required to continue adhering to EFL financial regulations as normal.
How Will Loans to Championship Teams Work?
Championship clubs will receive a £200m loan facility to help support them in meeting PAYE liabilities up to 30 June 2021 with loans capped at £8.33m per club, although all loans will be need to be repaid by June 2024 using the Premier League’s solidarity receipts or other central distributions by Premier League or EFL.
Clubs in breach or suspected of breaching EFL Regulations won’t be eligible for this funding and will need to submit evidence in their applications to club eligibility.
Like Leagues One and Two teams, clubs in the Championship will be required to continue abiding by the EFL’s financial regulations at all times.