Parachute payments in the spotlight with fresh legislation

Fresh legislation to establish an independent football regulator for the elite men’s game in England is set to be introduced to Parliament by the government, with fresh focus on multi-million pound ‘parachute payments’.

Parachute payments, which are made to Premier League when they are relegated to the EFL Championship, were controversially excluded in the original Football Governance Bill, which was introduced to Parliament earlier this year.

The original legislation did provide the regulator with ‘backstop powers’ to mediate a financial settlement if the Premier League and English Football League (EFL) continue to fail to reach agreement on a new funding deal. This is to ensure that money from the top of the game flows down throughout the football pyramid.

Now, parachute payments, that were excluded from the regulator’s scope in the initial draft bill, will be considered when a decision is made on how much money English football’s top flight should be redistributing.

The new legislation, described as ‘strengthened’, will also ‘explicitly require clubs to provide effective engagement’ with fans on changes to ticket prices, and any proposals to relocate home grounds.

State ownership has been a hotly debated topic in football, but the new states that the regulator ‘will no longer be required to consider government foreign and trade policy when approving club takeovers, with a clear commitment to do more to improve equality, diversity and inclusion (EDI).’

The bill will be introduced on Thursday in the House of Lords in an attempt to speed up the legislation.

Culture Secretary, Lisa Nandy, commented, “For too long, financial instability has meant loyal fans and whole communities have risked losing their cherished clubs as a result of mismanagement and reckless spending.

“This bill seeks to properly redress the balance, putting fans back at the heart of the game, taking on rogue owners and crucially helping to put clubs up and down the country on a sound financial footing.”

A Premier League statement read, ‘We remain concerned about the regulatory framework. Specifically, we believe rigid banking-style regulation, and the regulator’s unprecedented and untested powers to intervene in the distribution of the Premier League’s revenues, could have a negative impact on the league’s continued competitiveness, clubs’ investment in world-class talent and, above all, the aspiration that drives our global appeal and growth.

‘With our clubs, we will continue to work with government and parliamentarians to consider appropriate checks and balances in the legislation to protect the hard-won position of English football, which is globally admired, a vital source of soft power and a driver of economic growth all over the country.’