Key facts
- The Independent Football Regulator (IFR) is consulting on its backstop mechanism for revenue distribution.
- A 'New Deal' for football finance between the Premier League and EFL is facing potential stalemate.
- The current revenue-sharing agreement is set to be extended for an eighth year.
- The Football Governance Bill allows the IFR to intervene in revenue distribution as a last resort.
- The backstop can be triggered by a lack of agreement, material revenue changes, or a five-year lapse since the last deal.
- If mediation fails, an expert panel will select the best final proposal from the leagues.
The Independent Football Regulator (IFR) is initiating consultations on its backstop mechanism for revenue distribution, amid growing concerns that the long-awaited 'New Deal' for English football finance may be heading for a stalemate. The current revenue-sharing agreement between the Premier League and the English Football League (EFL), which was last agreed upon in 2019, is reportedly set to be rolled over for an eighth consecutive year.
The Football Governance Bill empowers the IFR with a backstop mechanism, allowing it to intervene in revenue distribution across the top five men's English football leagues as a final resort. This mechanism can be triggered if there is no existing distribution agreement, if revenues have materially decreased, if circumstances affecting revenue have significantly changed, or if five years have passed since the last agreement was made.
Before triggering the backstop, the IFR must have reasonable grounds to believe its objectives, such as ensuring financial sustainability and resilience, would be jeopardized. It must also consider if its other functions could resolve the issues. The IFR's first 'State of the Game Report' must be published before the backstop can be activated.
Once triggered, the leagues involved will have 28 days to appoint a mediator. If they fail to agree on a mediator, the IFR will appoint one. Should an agreement not be reached within the mediation period, which can be extended by another 28 days, the process moves to a final proposal stage. An expert panel will be formed by the IFR to review final proposals from both parties, selecting the one that best aligns with financial sustainability and resilience goals, while also considering investment, competitiveness, and commercial interests. Any proposals must account for the financial sustainability of relegated clubs and cannot reduce 'parachute payments' for at least a year after an order is made.