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- Kogan warns IFR will have backstop powers to intervene if a settlement cannot be reached
- Current system in English soccer “bakes in risk” and relegation can spell a “death sentence”
Independent Football Regulator (IFR) chair David Kogan says relegation can spell a “death sentence” for English clubs because of the cliff edges between divisions, and called on the Premier League and the English Football League (EFL) to urgently reach a new financial settlement.
Kogan said the “clock is ticking” on the leagues to strike a new deal, saying the rolling over of the existing 2019 deal was “to no-one’s satisfaction”.
He warned the IFR will have backstop powers to intervene if a settlement cannot be reached, but said he wants soccer to find its own solutions to the issues that exist.
The regulator will produce a first draft of a ‘State of the Game’ review later this year, but Kogan gave some of his early observations on its health at the Financial Times Business of Football Summit in London on 26th January.
“The current system bakes in risk. Multiple clubs throughout the pyramid have told us they would not be able to survive a month if their owner stopped funding,” he said.
“We know that players’ wages have been rocketing in the Premier League, but it’s also happening across the pyramid.
“Relegation, for many, is a near death sentence. Clubs facing relegation can see their revenues cut by up to 80 per cent if they fail to bounce back quickly, and the early analysis we’ve done suggests this is just as much of a problem between League Two and the National League as it is between the Premier League and the Championship.
“The whole pyramid is facing a series of cliff edges that people talk about. They have not been addressed, and without better financial mitigation they are entirely unsustainable.
“The clock is ticking. The opportunity is there. We are there to help football find those solutions. We are there to regulate this, to protect the pyramid that English football has depended on now for over 160 years.”
Talks over a ‘New Deal’ between the leagues have stalled, with the regulator able to step in and impose a solution if one party asks it to.
“We will be looking at things such as the current mechanism for parachute payments, the cliff edges and the other features of the existing deal, because under our mandate, we are there to make the game more sustainable,” he said.
Speaking to reporters after his on-stage appearance, Kogan was asked whether he envisaged parachute payments being refined or scrapped altogether.
“Parachute paymeFnts are not going to vanish overnight,” he said.
“Clearly there’s going to be a discussion about that. What those discussions lead to, I’ll tell you when they happen.”
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