How Sheffield United could be affected by major Championship funding shake-up as regulator reveals plans
Independent Football Regulator chair David Kogan has outlined proposals to reduce parachute payments, more than double solidarity funding and introduce new financial support for struggling EFL clubs as talks between the Premier League and EFL continue.
Sheffield United could be among the clubs affected by a proposed shake-up of football finances, with the Independent Football Regulator outlining plans to reduce parachute payments and significantly increase funding flowing into the Championship.
Regulator chair David Kogan has revealed details of negotiations between the Premier League and EFL, including proposals to more than double annual solidarity payments, create a fund for redevelopment and provide additional financial support for clubs in difficulty.
The proposals are aimed at narrowing the financial gap between clubs relegated from the Premier League and those already in the Championship, with United among the sides competing in a division where parachute payments have long been a major talking point.
The Blades’ own top-flight cushion was lost in the summer, with chief executive Stephen Bettis admitting this season is the first in a while that they have operated as a “true” Championship club without either playing Premier League football or receiving its benefits in the form of parachute payments.
Kogan said the amount paid to relegated clubs would reduce under the proposed arrangement, while the amount of money going into the Championship would increase significantly.
“The big row between the Premier League and the EFL has been about parachute payments,” he told The Rest is Football, “and the gap between those clubs who get relegated from the Premier League into the Championship and those other Championship clubs that don't have it.
“And the huge difference in finance the two have had. Under this arrangement, the amount of money paid in parachute payments will reduce and the amount of money going into the Championship will vastly increase.”
The proposals would also introduce a merit-based system for distributing funding within the Championship, with clubs higher up the table receiving more money than those lower down.
Kogan believes the changes would make the second tier more competitive by reducing the financial difference between clubs receiving parachute payments and the rest of the division.
“So basically the clubs at the top of the Championship and the clubs coming down from the Premiership, the delta between them, between parachute payment clubs and non-parachute payment clubs, is going to significantly reduce, which makes the Championship a much more competitive league,” he added.
Alongside the changes to payments, the proposed agreement would include a large development fund that Championship and lower-league clubs could use for projects including stadium improvements and youth development.
It would also contain a liquidity fund to help clubs that run into financial difficulty, providing support while they move from one owner to another.
The proposals come amid ongoing debate about the financial sustainability of clubs across the EFL and the advantages available to teams dropping out of the Premier League.
However, the details outlined by Kogan relate to a proposed arrangement between the Premier League and EFL, rather than a confirmed change to the Championship's financial structure.
The IFR is also preparing to introduce a new licensing regime and, Kogan revealed, already maintains a watch list of clubs displaying early warning signs of financial difficulty.