Preston's Peter Ridsdale is right - the lack of an EFL deal endangers English football's future

On Monday, a meeting took place between the 20 Premier League clubs with the future of the English football pyramid at stake. Under discussion was a proposal to increase financial support for the EFL by up to £900m over five years with a scheme which would replace the divisive parachute payments system currently in place. No agreement was reached, with up to ten clubs reportedly scotching the proposals. The response has been damning, and paints a bleak vision of English football’s future.

Preston North End director Peter Ridsdale told BBC Radio 5 Live that “English football is finished” if the Premier League cannot come to an agreement which ensures that the football league ladder is “competitive and sustainable.”

“It is essential for all communities in this country that all the football clubs are sustainable,” the former Leeds United chairman added. “They can't be on the current split of funds going into English football.”

As it stands, clubs in the EFL receive very little money unless they were recently relegated from the top flight. The existing solidarity payments which the Premier League gives to the EFL sees around £130m split between the 72 member clubs, with each Championship club receiving £5.19m as of this season. Clubs who benefit from parachute payments from the Premier League, meanwhile, receive over £90m each over the first three years that they spend back in the lower rungs of the league ladder.

The divide between the haves and the have-nots has continued to grow as a consequence. This year, three of the four teams realistically chasing automatic promotion to the Premier League – Leicester City, Leeds United and Southampton – are still being funded by the top flight and are, as a result, the three clubs who have the highest wage bills in the Championship. It is eminently plausible that the three clubs going up will be the same as came down last year. That has never previously happened.

Meanwhile, as the Championship is divided further into teams that are benefitting from parachute payments and those that are not, the gulf between established Premier League clubs and newer sides continues to grow. The three promoted teams from last season – Burnley, Sheffield United and Luton Town – could easily be the same three that come back down and they currently occupy the bottom three places in the top tier. They are also the three teams with the lowest wage bills in the Premier League. The financial gaps have become chasms which continue to grow.

We are closing in on a point when the realistic ambitions of teams are crystallised based on how successful they happened to be in this era of Premier League history – and without plausible opportunities for their teams to grow and succeed, it would be little wonder if interest from supporters waned.

There have been recent success stories, of course. Bournemouth, Brentford and Brighton & Hove Albion have all worked their way slowly up the ladder and established themselves in the Premier League from humble beginnings. But even in their cases – three exceptionally well-run clubs who have made practically every crucial decision correctly for many years – there seems to be a clear cap on how far they can go in the short or medium-term. They remain selling clubs who are some distance away from the top four or a chance at the title.

There will always be some degree of stratification, of course, but the current financial system puts an especially hard cap on how far a club can go. The best most teams in the Championship can really hope for is promotion and a short spell at the top table before normality resumes. As the dream of sustained success becomes more distant, clubs down the ladder will likely have a tougher time attracting fans.

14 Premier League teams have to agree to any motion to change the structure or rules of the top flight – in this case, The Daily Mail has reported that ten teams made it clear that they would not vote in favour of the proposals, enough to ensure that a formal ballot was never taken.

Arsenal, Aston Villa, Bournemouth, Chelsea, Crystal Palace, Liverpool, Nottingham Forest, Tottenham Hotspur, West Ham United and Wolverhampton Wanderers are the teams named by the Mail – ten teams who appear to have prioritised their own interests, either because they want to maintain a larger slice of the pie or because they want to benefit from parachute payments should they be relegated.

The Premier League has also voted in favour of other recent measures which will strengthen their financial position relative to the much larger chasing pack. A new system of financial regulations will be introduced which will see the recently-introduced profit and sustainability rules ditched in favour of a model which mirrors UEFA’s laws for European competition. That model allows clubs to spend a maximum percentage of their revenue on transfer, agent fees and wages, which will help clubs with large incomes to spend more relative to their less wealthy peers.

Premier League clubs also rejected a proposal for a ban on players being loaned between clubs in the same ownership groups, which would have damaged the ability of clubs like Chelsea and Manchester City to fully exploit their feeder or sister sides. The clear trend is the teams with all the power and money voting to ensure they keep as much of it as possible.

The government, meanwhile, has threatened to step in. Culture Secretary Lucy Frazer has said that “It is in the Premier League and EFL's interests to come to a deal but it is clear if they don't the regulator will,” referring to their proposal to set up an independent regulatory body which would oversee the governance of the game.

That body still doesn’t exist, however, despite the Conservative government’s pledge to create it. There have been reports that a bill will be put before the House of Commons in the next month, but there is no set time and no guarantee that it will come into existence ahead of the next general election, at which point its future may be uncertain depending on who is in government.

The Daily Mail’s report also suggested that plans to challenge an independent regulator in court have been discussed by Premier League clubs, claiming that “some clubs feel that any legal challenge would cost far less than the extra £836m over five years being proposed.”

The Premier League, for its part, released a statement insisting that “Premier League clubs [at Monday’s meeting] re-confirmed their commitment to securing a sustainably-funded financial agreement with the EFL, subject to the new financial system being formally approved by clubs.”

That agreement is no closer, however, and the disparity caused by the current system remains entrenched. The decision to effectively block the proposals at Monday’s meeting also comes against the backdrop of rising ticket prices at several clubs (including at Spurs, who are also removing ticket discounts for senior citizens) – the Premier League’s current direction of travel is plainly to favour greed over the needs of the footballing community as a whole.

Ridsdale’s comment referring to the need for sustainability in football as being essential to “communities” rings especially true in light of the way clubs continue to gouge fans for profits despite having vast revenue streams already in place. Almost every professional football team makes great play of its community links and of the importance of its supporters, but their actions frequently give the lie to the notion that top-level teams are interested in their fans as anything other than a vehicle through which further profit may be made.

The richest and best-supported football clubs have always had – and will always have – a massive competitive advantage over the competition. They will always earn more money and hog the silverware. That is a natural consequence of a historically meritocratic league system, but that doesn’t mean to say that the gap should be allowed to widen to a point where football teams who are less well-off lose the ability to dream of greater things altogether.

There is also the blunt fact that there is a vastly increased risk of financial problems further down the ladder. Football clubs are expensive and risky business enterprises, and several established league sides have either gone bust or come desperately close in recent years – sides like Bury, Southend and Macclesfield Town, for example, and there are several others. As the fiscal gap grows, the risk of further crises and insolvencies increases.

Football’s current financial model is not sustainable. It doesn’t foster a balanced competitive environment and it gambles with the future of community clubs further down the ladder. This has been the case for years – but even as plans are put forward to try to partially redress the balance and provide sorely-needed funds to clubs who don’t get the benefit of the enormous rights money that the Premier League earns each year are put forward, they are quashed by clubs who just want to make as much cash as they can.

This is why most big clubs are now owned not by local businesspeople with tangible connections to the clubs and communities themselves, but by nation states or venture capitalists. Successful football teams are outstanding vehicles for making enormous amounts of money. And the nature of their current ownership means that they will only take decisions which benefit and enrich themselves, regardless of the knock-on effects.

We can’t undo most of what has been done to get us to this point, but an independent regulator who can blunt the excesses of the venture capitalists who dominate the top end of the league ladder, and who can try to bring some degree of financial balance and offer some security to smaller clubs is a necessity. Let us hope that it exists soon, and that legal challenges against it flounder quickly, because the longer the current state of affairs exists, the greater the damage will be.