The Premier League has reached a £50m agreement over a bailout for EFL clubs in League One and Two and a £200m loan facility for Championship teams.
The rescue package was unanimously agreed by Premier League clubs during a shareholders' meeting on Thursday, having already been approved by the EFL Board in light of the financial challenges many clubs are grappling with during the Covid-19 pandemic.
On top of the £50m grant for League One and Two clubs, the Premier League will also assist the EFL by making a £200m loan facility available to Championship clubs interest free.
EFL chairman 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.
"I would like to thank Richard Masters and Gary Hoffman for their efforts on behalf of the Premier League, and of course their shareholders, for making this welcome, tangible commitment to the professional game at a time when it has needed it most."
Premier League chief executive Richard Masters added: "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."
League One and League Two relief package explained
A combined £50m will be made available for League One and League Two clubs, with £30m being paid out immediately across all of the 48 third and fourth-tier clubs.
The £30m grant is based on lost gate receipts, with League One clubs receiving a minimum payment of £375,000 and League Two clubs £250,000. Half of that £30m will then be distributed based on a "lost gate revenue share calculation", which must be approved by both the EFL and Premier League.
The remaining £20m, called the 'Monitored Grant', will allow clubs to apply based on "need", the EFL-Premier League statement said, with a panel set to determine each club's eligibility.
The statement added: "Clubs subsequently in receipt of a 'monitored grant' will be subject to certain restrictions, in respect to transfer spend and player wages.
"Clubs who keep to the restrictions will not have to repay any of the funding required, whereas for clubs in breach, the 'monitored grant' becomes repayable by the club.
"Any club in receipt of a grant or monitored grant payment will be required to continue to maintain compliance with the EFL's financial regulations."
Championship loan facility explained
The EFL has also secured a £200m loan facility from the Premier League that they will be able to lend on to Championship clubs.
Per EFL.com, the loan details are as follows:
- The loan facility is provided to support clubs in the Championship to meet PAYE liabilities up to the end of 30 June 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.
- This fund is not 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.
- Any Club in receipt of a loan payment as detailed will be required to continue to maintain compliance with the EFL's financial regulations.
Dowden welcomes relief package
Oliver Dowden, the Secretary of State for Digital, Culture, Media and Sport, has said he is "glad that football has come together", with the bailout following a £300m 'Winter Survival Package' issued by the Government last month to protect the immediate future of spectator sports in England.
"I warmly welcome this deal between the Premier League and the EFL which provides up to £250m support to help clubs through Covid.
"I'm glad that football has come together to agree this substantial package. Fans are starting to return and we look forward to building on this as soon as it's safe.
"With a £250m support package for men's elite football and £300m Government funding for women's football, the National League and other major spectator sports we have fuel in the tank to get clubs and sports through this."
With a £250 million support package for men's elite football & £300 million Government funding for women's football, the National League and other major spectator sports we have fuel in the tank to get clubs and sports through this— Oliver Dowden (@OliverDowden) December 3, 2020
DCMS Committee chair Julian Knight added: "We welcome this news which offers a ray of hope to football fans, along with the limited return to stadiums. Our concern has always been for those lower league clubs at risk of survival.
"However, what is most concerning is that this deal could have been reached several months ago and we share the frustration of fans that it has taken this long. We, as a Committee, have long pressed the Premier League and the EFL to reach an agreement. It cannot be right that in the middle of a pandemic the Government has been drawn into sorting out wrangles at the top of the game because football chiefs were incapable of doing it themselves.
"This fiasco is evidence of a lack of accountability within football's governance structure, demonstrating the urgent need for a review of how the business of football can be better managed in the interests of the clubs, fans and the nation".
Fans returned to English Football League matches for the first time in 266 days on Wednesday as clubs in tiers one and two welcomed back supporters.
Limited crowds were permitted to attend at Luton and Wycombe in the Championship, Charlton and Shrewsbury in League One and Carlisle and Cambridge in League Two, after nationwide lockdown restrictions in England ended on Tuesday.
EFL clubs in tier three areas continued to play their games behind closed doors on Wednesday.