English Football League chairman Rick Parry has called on the government to help the professional game fix a “broken system” by backing his plan for a radical shake-up of how the Premier League’s wealth is redistributed.

Parry, who was the Premier League’s first chief executive in 1992, was speaking ahead of the long-awaited publication of the UK government’s white paper on football, which was postponed earlier this month because of Ukrainian president Volodymyr Zelenskyy’s visit but is now scheduled for release on Thursday.

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White papers are formal plans for legislation and this one will set out how the government intends to create a new independent regulator for the game with responsibility for vetting prospective owners, ensuring clubs are up to date with payments and preventing anyone from joining non-sanctioned competitions, such as the highly contentious European Super League.

Like the Premier League and the FA, the EFL was originally opposed to the idea of an external regulator but soon got on board with the concept when it realised that former sports minister Tracey Crouch’s fan-led review in 2021 had convinced the government that the professional game was no longer capable of regulating itself, as it was riven with self-interest.

Parry, however, strongly believes that stronger rules will not work unless the fundament financial imbalances between the Premier League and the rest of the pyramid are resolved.

“Given the spark for the regulator was not the European Super League, it was Bury, you would have to assume the government gets that making clubs sustainable and the health of the pyramid is really what matters,” said Parry, referring to Bury’s expulsion from the EFL in 2020 because of grave financial problems.

“We don’t want another Bury and we are working day and night to ensure it doesn’t happen. But you could say the next one will be the government’s responsibility.

“We think any rational regulator looking at the current system has to say it is broken. The broad aim of the regulator — the broad aim of what Tracey (Crouch) was proposing — has to be within the white paper and it has to be the solvency of the clubs.

“It cannot be anything else. They don’t want clubs going bust. They don’t want an over-reliance on owner funding. We have all seen the problems of owner-funding. Owner-funding is brilliant until it isn’t. We have seen it with Derby, Bolton, Wigan.”

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Parry’s solution is to halve a revenue gap between the Premier League and Championship that is currently a “cliff edge”.

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In 1993, the Premier League’s first season, its central income from media rights was £45million and the EFL’s was £34million, effectively a 4:3 ratio and a gap of just £11million. But since then, the top flight’s media rights income has grown by a factor of 68, while the EFL’s have gone up only five and a half times. As a result, the gap has ballooned to £3billion.

What this means for clubs can be seen in the example of the 2018-19 season, the last full season before the pandemic complicated financial comparisons. That season, the Premier League’s bottom club, Huddersfield Town, earned £97million in TV money, while Norwich City, the top team in the Championship, got £8.2million, a gap of nearly £89million.

Parry says the Premier League knows this is wrong “but their solution, parachute payments, is also wrong”. Parachute payments are given to relegated teams by the Premier League to cushion the blow of relegation but also to encourage them to invest in talent on the way up. Their value has increased markedly over the last 30 years and they now give relegated teams a huge competitive advantage in the Championship.

Teams that only spend one year in the Premier League get two years’ worth of parachute payments, with teams that spend longer than a single season in the top division getting a third year of additional support, too.

A year-one payment is now £44million, while the rest of the Championship clubs only receive a solidarity payment of £4.8million, 11 per cent of the parachute payment, and that percentage is baked into the funding agreement between the leagues. That year-one payment is also more than the Premier League gives to Leagues One and Two combined in solidarity money.

Parry believes parachute payments have created a class of yo-yo clubs that move between the Premier League and Championship, stifling the flow between the divisions that is the English system’s unique selling point, but they have also created an arms-race effect in the Championship, where clubs are forced to overspend in order to compete with parachute clubs.

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His plan is to scrap parachute payments, reallocating the £200million-plus that would save more equitably, and introduce 2:1 revenue distribution ratios in both the Premier League and Championship. This would actually mean widening the distribution gap in the Premier League between the team that finishes first and the one that comes last, and bringing a merit-based system to the EFL for the first time.

The Premier League currently distributes its domestic TV revenue on a 1.6:1 basis and its international rights revenue on a 1.8:1 basis. This makes the league’s distribution by far the most equitable in Europe.

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But Parry points out that the ratio was 2.4:1 in 1992, as that was before anyone realised how much the international rights would be worth so they shared them evenly until 2022, and even a move to 2:1 would still make the Premier League fairer than its peers, while still providing all of its clubs with more than enough money to compete for talent.

He also wants the EFL and Premier League to pool their media rights and sell them centrally, and firmly accepts that cost controls are required, too, in order to prevent clubs from continuing to overspend.

The EFL believes that if this system was applied in 2018-19, Huddersfield’s revenue would have fallen to £74million and Norwich’s would have climbed to £32million. This would have reduced the gap by £44million, which should negate the need for a £44million parachute payment.

Parry, however, admitted that getting the Premier League to agree to this has been difficult, as it requires two-thirds of its clubs (14 out of 20) to agree on anything before it can make any significant changes. So far, the Premier League has not been able to offer the EFL any counter-proposals because its clubs cannot agree on how to proceed.

“But if the Premier League clubs were able to look a bit further than next season, they would see that our plan would increase the value of all the non-big six sides because it would no longer be catastrophic to be relegated — you would be de-risking them,” he said.

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“But we’re also very aware that getting 14 clubs to agree to this was always going to be a challenge. The gulf between the two leagues is so wide now this isn’t just tinkering. It’s a proper rethink of the redistribution and that’s challenging.”

In response, a Premier League spokesperson said: “The Premier League and EFL have been in dialogue and we have made clear financial proposals to EFL relating to increased funding for the pyramid and accompanying financial regulation. The Premier League has clear parameters for discussions provided by a Club mandate agreed in November.”

The 67-year-old football administrator, who also served as Liverpool’s chief executive between 1998 and 2009, said the EFL was willing to compromise and negotiate on its financial plans. He also said it was open to talks about the future of the Carabao Cup, its most lucrative asset, how it divides its money with Leagues One and Two, and the possibility of extending the “three up, three down” model to the National League.

(Photo: Getty Images)