Premier League clubs agree new financial rules, with EFL sides to be offered increased payments

Premier League clubs reached a set of agreements at a meeting on Tuesday; new Financial Fair Play rules agreed but top flight set to be out of step with UEFA; payments to EFL set to increase but clubs must follow Premier League rules; parachute payments to be reformed

By Rob Dorsett

Image: Premier League clubs still need to agree the new plans with the EFL

Premier League clubs have agreed a brand new set of financial rules that will fundamentally change the way England's top division is run and how the richest clubs will help to fund the rest of the football pyramid.

It is understood the most controversial areas of debate were centred around continued parachute payments to clubs relegated to the Championship and new Financial Fair Play rules, which will have to be respected by Premier League clubs and those in the English Football League (EFL).

No date has yet been set for the rules to come into effect because they first have to be agreed with the EFL but, after 12 months of discussions, the Premier League now has a mandate to begin negotiations.

The new financial rules mean the Premier League will be out of step with UEFA, whose rules state clubs can only spend 70 per cent of their total revenue on players' wages and transfer fees.

Image: Chelsea - and other English sides competing in Europe - will have different financial rules at home and abroad

But Premier League clubs have decided they will allow a higher percentage to be spent in England - although the actual number remains confidential at this stage.

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That means England's top clubs who compete in Europe will face different financial rules in their domestic league compared to those set by UEFA.

For example, if the new rules were in effect this season, Manchester City, Liverpool, Chelsea, Tottenham, Arsenal, Manchester United and West Ham - the clubs currently in European competition - could face UEFA penalties for over-spending, even if they have remained within Premier League financial limits.

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At Tuesday's vote, it is understood Premier League clubs were adamant the percentage limit had to be higher for English clubs to allow for 'aspirational spending' as clubs try to compete with the 'big six'.

The vote took place after more than a year of discussions brought about by the recommendations of the fan-led review in November last year.

EFL offered more money but must follow PL rules

Image: Watford and Burnley are both benefitting from parachute payments after relegation from the Premier League last season

Premier League clubs also agreed to significantly increase the payments made to EFL clubs at Tuesday's meeting.

There will not be an equal amount shared by all EFL clubs but instead those clubs who finish higher up the table will earn more than those lower down - as is the case in the Premier League.

In order to get the increased revenue, Premier League clubs will dictate that EFL clubs must abide by the same financial rules and spending limits as the top-division sides.

It was also agreed that a form of parachute payments for relegated clubs will remain but further discussions will decide exactly how, while the Premier League will create a new 'infrastructure fund' to provide extra cash to clubs in League One and League Two to improve their facilities.

Also under discussion was the work-permit system, with Premier League clubs agreeing there needs to be a review as, post-Brexit, clubs have found it increasingly difficult to buy young talent from overseas.

However, the issue will require further discussion with the UK Government.

Also requiring further talks are the plans around the domestic football calendar from 2024 onwards, which is when UEFA's expanded Champions League format is set to begin.

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