The EFL and Premier League have agreed on a rescue package and distress fund to address the financial challenges that have arisen for EFL clubs as a result of the Covid-19 pandemic.
The Premier League will provide a £200 million facility that Championship clubs will be able to utilise interest free.
A fund of £50 million has been agreed for League One and Two clubs and will be available to them in the form of a grant and monitored grant payments.
Many EFL Clubs have faced severe financial implications from the coronavirus pandemic and have seen their main source of income, the fans, banished since March.
EFL clubs do not share in the same financial royalties as Premier League clubs do with TV fees and many clubs currently find themselves in difficulty.
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”.
With the return of fans to clubs that are currently in Tier One and Two the need for financial support is more important now than ever. Many clubs, despite having fans back, will still be running at a loss.
For those lucky enough to have fans back they will now have to cover the cost of extra staff and security whilst still running at heavily reduced capacities often not covering their expenses.
So how will this affect our local clubs?
Port Vale will not be welcoming the return of fans yet as they are still under Tier 3 restrictions but Carol Shanahan is grateful that a deal has been reached for the rescue package, she said: “There is over a £1.5 million shortfall over this year which Kevin and myself would have to cover.
“Having some relief from that is very welcome, we have felt quite lonely so it is nice to know that there is some other support coming into the club”.
The Rescue Package: Explained
A total of £50 million will be available for all League One and Two clubs. £30 million of it will be made available immediately and is based on the gate receipt that clubs receive.
All League One clubs will receive a minimum of £375,000, that is set slightly less for League Two clubs at £250,000. The remaining money from the initial £30 million will then be shared between the clubs based on a ‘lost gate share calculation’.
The remaining £20 million will be used as a ‘monitored grant’ which will allow clubs to apply for extra support with the joint EFL/Premier League panel determining each club’s eligibility.
There is also £200 million available for Championship clubs which the Premier League is funding. Loans for Championship clubs will be capped at £8.3 million and must be repaid by June 2024.
The fund will not be available for any club that has breached the EFL financial regulations and any side that takes up the loan will have to comply with the EFL regulations.
A rescue package for EFL clubs has been a thing of desire for a long time and it is hoped that the new announcement will help more clubs survive this difficult time.