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Trevor Birch: EFL model needs to be about sustainability, not philanthropy

2 June 2021

By Trevor Birch, EFL Chief Executive

After one of the most challenging seasons in living memory it was fantastic to sign off the 2020/21 EFL season in style with returning fans back in their thousands at Wembley to witness Brentford, Blackpool and Morecambe gain promotion via the Sky Bet Play-Offs to the next division in the English pyramid.

In terms of popularity, the EFL, home to 72 of the 92 League Clubs, is one of the strongest in Europe both in attendance at stadiums and broadcast audiences around the world, yet this strength is not reflected in its financial picture.

In simple terms, the football pyramid’s financial future is under threat. In 1992 when setting up the Premier League, the tripartite agreement between the FA, the Premier League and the then Football League, stated, as a core principle, that Clubs in the EFL should not be financially disadvantaged, no worse off, as a result of the Premier League’s creation. However, nearly 30 years later, it is clear that is currently not the case.

Over the years with every increase in the Premier League’s media rights’ value the gap between the leagues has widened to what is now a chasm. In 1993 the annual turnover of the Premier League was £45m and that of the EFL £34m. By 2019 this had widened to £3.3bn and £153m respectively. The Premier League supports the EFL through solidarity together with youth development and community funding. Most recently grants and loans also have been paid to League One and Two Clubs to give some relief for the financial effects of Covid.  But the huge imbalance remains.  

In season 2019/20 seven Clubs in the EFL received parachute payments totalling circa £240m. The remaining Clubs across all three divisions received roughly the same amount to share between them in solidarity and central distributions. Shouldn’t there be a more equitable system that narrows the chasm between the Premier League and the EFL at the Championship fault line?

Quite rightly, there has been much talk and outrage about the European Super League proposals, but we have our very own super league here on our doorstep. Its sheer financial strength leads to an inequality of financial distribution which threatens the stability and the future of the football pyramid. There is a further threat too. With all the talk about the ESL the recently announced changes by Uefa to the Champions League from 2024 onwards has slipped under the radar. The changes to the match calendar threaten the future of the Carabao Cup and will likely lead to a significant drop in media rights value.

We need a system that can ensure EFL Clubs survive and thrive without incurring collective losses of £243m pre-Covid in 2018-19 and the need for owner funding across the EFL of approximately £400m a year. Our model needs to be about sustainability, rather than philanthropy or speculation.

In our view, the only way to achieve this sensibly is through implementation of a series of sustainability measures which includes EFL clubs receiving 25 per cent of pooled revenues, abolishing parachute payments and implementing effective cost control mechanisms across the league. Quite simply, it is no use spreading money around in a fairer way only for it to be spent as quickly as it comes in.

Narrowing the gap between the haves in our domestic super league and the have-nots throughout the rest of the pyramid will lead to more stable ownership models and ultimately better relationships with fans.

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