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Sources: Leeds United stance revealed as £100m at risk in behind-the-scenes row
Leeds United are among the mass of Premier League clubs who have made it clear that they are not willing to compromise on the future of parachute payments, sources have told Football Insider.
The EFL and the Premier League are approaching an agreement that will see more money filter down through the divisions, but the EFL wants parachute payments scrapped as well as a larger chunk of solidarity cash.
The so-called ‘Big Six’ are understood to be relatively diplomatic about the future of parachute payments, but the rest of the Premier League are vehemently opposed to their abolition.
A consultant who has worked on behalf of both the Premier League and the FA has now told this site that there appears to be no path to a resolution in which the payments are scrapped or dramatically reduced.
Under the current system, clubs relegated from the top flight receive £90-100m over three years in order to ease their transition to the far less lucrative EFL.
Critics – including EFL chairman Rick Parry – argue that the system distorts competition in the Championship, giving recently-relegated teams an unjustifiable competitive advantage.
Conversely, the likes of Kieran Maguire, Football Insider‘s resident finance guru, insist that the ability of clubs like Leeds to compete in the transfer market would be dramatically impacted if parachute payments are scrapped.
The EFL currently receives around 14 per cent of annual Premier League revenue in solidarity payments.
A recent breakthrough in talks between the two parties, brokered by the FA and covered extensively by this site, would see that figure increase to around 20 per cent.
That upswing will likely come with caveats, such as the retrenchment of certain aspects of the League Cup and FA Cup.
It is not known, however, whether the EFL will be willing to entertain an offer that does not include at least some curtailment of parachute payments.
Leeds, who as revealed by this site on Tuesday (2 May) are set to appoint Sam Allardyce as their new manager following Javi Gracia’s dismissal, are currently outside the relegation places on goal difference only.
Their opposition to the abolition of parachute payments is rooted in an acceptance that they are among the clubs that are most likely to be in receipt of them year to year.
In other news, Premier League bends the rules for Leeds United as behind-the-scenes plot revealed.