The Premier League and the English Football League (EFL) have today (Thursday) reached a final agreement on a rescue package and distress fund to address the immediate financial challenges faced by lower league clubs as a result of the COVID-19 pandemic.
A fund of £50m (€55.4m/$67.25m) in the form of a grant and monitored grant payments has been agreed for League One and Two clubs while the Premier League will provide a further financial commitment to assist the EFL in securing a £200m loan facility that Championship clubs will be able to utilise interest free.
Premier League clubs gave their final approval to the agreement at today’s shareholder meeting, following earlier approval of the deal by the EFL Board, acting on behalf of its membership. The League One and League Two relief package will see £30m paid to all 48 clubs as a grant and a further £20m available on application as a ‘monitored grant’.
The £30m grant for will be paid immediately from the Premier League to EFL clubs for distribution based on lost gate receipts in respect of the 2019-20 and 2020-21 seasons. Each club will receive a minimum payment of £375,000 in League One and £250,000 in League Two. The remaining £15m is to be distributed using a lost gate revenue share calculation, which will be approved by both the EFL and the Premier League.
The Monitored Grant will be provided with clubs able to apply for it based on ‘need’, with a joint EFL and Premier League panel to determine eligibility. For those in the Championship, the Premier League has agreed to provide a payment commitment of up to £15m to cover interest, arrangement fees and professional fees to allow the EFL to secure a £200m loan facility that it will then on-lend to clubs interest free.
The loan facility is provided to support clubs in the Championship to meet PAYE liabilities up to the end of June 30, 2021. Loans are capped at £8.33m per Championship club with monies received to be repaid by June 2024 using Premier League solidarity receipts or other central Premier League or EFL distributions.
However, the fund will not be available to any club in breach or suspected breach of EFL regulations and clubs will again need to submit evidence in their applications to club eligibility. EFL chair, Rick Parry, said: “Our over-arching aim throughout this process has been to ensure that all EFL clubs survive the financial impact of the pandemic.
“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.”
Today’s decision comes after a number of EFL clubs welcomed fans back to their stadiums for the first time in nine months last night as new guidelines allowing up to 2,000 spectators at live sporting events were introduced.
A £50m Premier League rescue package for lower-league clubs was initially approved by the EFL last month after progress was made on discussions between the top-tier league and second-tier Championship. The package was rejected by the EFL in October because it did not apply to Championship clubs.
The UK Government subsequently confirmed a £300m cash injection for “major spectator sports” in England, but elite men’s football and cricket was excluded.
Commenting on today’s announcement, Richard Masters, Premier League chief executive, 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.
“All football clubs continue to suffer significant financial losses as a result of the pandemic, but Premier League Shareholders today unanimously agreed to provide additional funding and support for EFL clubs in real financial distress.
“We are very pleased to have reached this agreement and we stand together with the EFL in our commitment to protect all clubs in these unprecedented times.”
Image: Premier League