Premier League could be forced to slash parachute payments – but new regulator will not abolish them
PARACHUTE payments will NOT be abolished by the new football regulator.
But the Premier League could be forced to slash them if a report into the game finds evidence that the huge sums paid to clubs relegated from the top flight undermine the financial stability of EFL clubs.
The EFL has long campaigned for the payments to be scrapped, while the PL insists they are essential and did not want the regulator to have any powers over them.
The previous Tory administration proposed legislation that excluded parachute payments from a regulator’s influence.
But the new Labour Government has reversed that in the Football Governance Bill that went before the House of Lords on Thursday.
Sports minister Stephanie Peacock said: “In terms of parachute payments, we completely understand the importance of them.
“I’ve met the Premier League on a number of occasions and heard their concerns.
“The whole point of the Bill is around financial sustainability.
“If the State of the Game report identifies that parachute payments are an issue, then it seems to be an odd situation that the regulator can’t look at them.
“It will also be for a panel of experts to assess the situation.
“But we have added some wording that makes it clear that they cannot be abolished.”
Peacock - Independent regulator will address imbalance in English football
By Stephanie Peacock, Sports Minister
Sun readers know exactly what it means to don the team scarf on match day.
It’s a rite of passage for millions of us every week, our club colours tying us proudly to places close to our heart.
For me, it’s the highs and lows that come with being a lifelong Birmingham City supporter.
But for far too long, we have seen the hurt and agony when a cherished community football club goes to the wall as a result of a rogue owner running a club into the ground, or a reckless one spending well beyond their means.
The impact on local people is devastating. Just ask fans from Bury or Macclesfield when their clubs hit the wall.
As Sports Minister, it is my job to help ensure that sport in this country is run well and supported to be fair, competitive and sustainable, so I am delighted that we have been able to deliver on our manifesto commitment to introduce a beefed up Football Governance Bill in Parliament.
The new Bill will deliver an Independent Football Regulator that puts fans at the heart of the game. It will make sure football fans are genuinely consulted on things like ticket prices, or proposed stadium moves.
This is something our Football Governance Bill will address properly. It will give fans a strong voice on the things they hold dear such as home shirt colours, or club badges.
The Regulator will seek to redress the imbalance and strengthen financial sustainability throughout the football pyramid – from the Premier League to the National League.
To make this happen, the Bill will give the Regulator the power to assess the impact of parachute payments paid to clubs relegated from the top flight.
To be effective, the Regulator needs teeth and it will have the power to see the whole picture of a club’s finances and that is why the Labour government has strengthened the Bill.
To ensure the Regulator can truly carry the confidence of the public, clubs and leagues, we have dropped the last government’s requirement for the Regulator to consider government trade and foreign policy when assessing club takeovers.
The Regulator will also operate an improved owners and directors test that will be better equipped to weed out unscrupulous and unwanted directors of fans’ beloved clubs.
The regulator will not be able to take any action on parachute payments for at least two years in any case.
The Government is readvertising the position of chair of the new body in a bid to attract a wider range of candidates.
The person who gets the job will be able to shape the State of the Game report, which will be compiled over an 18-month period.