The Premier League is confident the so-called 'New Deal For Football' can be agreed with the EFL and the Football Association before the end of the season.
The football authorities have been meeting regularly since November last year to discuss a new financial distribution model, enhanced cost control measures, player development and calendar issues, after a mandate was provided to the league by top-flight clubs.
The UK government will publish a new white paper on Thursday confirming its intention to give "targeted powers" to a newly-created independent regulator, allowing it to intervene if the bodies cannot reach agreement on the flow of funds down the pyramid.
However, the Premier League is understood to be optimistic that the ‘New Deal’ discussions will reach a positive conclusion without the need for the regulator to be involved.
It has been encouraged by EFL chairman Rick Parry’s comments on Monday that his organisation is keen to come to a football-led solution, even though he had called for the regulator to be given backstop powers.
Even though the top flight still believes Parry’s call for a 25% share of pooled broadcast revenues is too much, the concept of net media revenue being the model for distribution is not off the table.
The EFL is seeking the introduction of a new merit-based payment system in the Premier League and the Championship where the team at the top of each league earns twice as much as the team finishing bottom of that same league, and the abolition of parachute payments.
The Premier League’s current merit payment model sees the league’s top club earn 1.65 times more than the bottom club, which it feels is a key factor in helping to keep the league competitive.
Within the ‘New Deal’ discussions, the FA is understood to be pushing for greater funding for grassroots football, and will be keen to see the detail within the white paper regarding financial flow down the pyramid.
On the calendar, the discussions will look at the future format of the Carabao Cup, and also the possibility of scrapping FA Cup replays.
The British government is confident the regulator's powers will be balanced in such a way that it will not diminish the competitiveness and strength of the Premier League, which in financial terms is streets ahead of even the other 'Big Four’ leagues in Europe.
The licensing system will enshrine a power of veto for fans on club heritage matters, preventing owners from changing a club’s name, badge or kit without supporter input.
The regulator will also have to pre-approve any stadium move, and has powers to block clubs from joining breakaway leagues which do not meet predetermined criteria, following on from the European Super League scandal.
Any new competitions would need to be meet predetermined criteria, likely to include that they are meritocratic and do not threaten the sustainability of the existing English domestic league structure.
The proposed formation of a European Super League in April 2021 led to outrage among supporters and prompted the Government to bring forward its plan to commission the fan-led review. It was chaired by former sports minister and current Conservative MP Tracey Crouch, and published its recommendations in November 2021.
The regulator will also run an owners’ and directors’ test, with a focus on the fitness and propriety of new owners and enhanced due diligence.
At this stage it is not clear whether there will be any human rights element to the test, which Amnesty International has called on the Premier League to introduce in the wake of the Saudi-led takeover of Newcastle and has echoed again amid a Qatari bid for Manchester United.
The review also recommended the introduction of a levy of up to 10 per cent on Premier League transfer deals to support the pyramid and grassroots football. This was heavily criticised at the time by top-flight bosses, with Leeds chief executive Angus Kinnear likening it to Maoism.
His Aston Villa counterpart Christian Purslow also warned over-regulation ran the risk of "killing the golden goose" of the Premier League. It is looking unlikely that the levy idea will be taken forward, with the focus on the regulator's backstop powers at this stage.
Kevin Miles, the chief executive of the Football Supporters' Association who was part of the fan-led review panel, said: "The FSA warmly welcomes the historic commitment from the Government to introduce an independent regulator of English football.
"The football governance white paper clearly addresses our key concerns around ownership, rogue competitions and sustainability and of course we support any proposals that offer fans a greater voice in the running of their clubs.
"We look forward to engaging with the Government on the next steps."
