Premier League and EFL: a £1.5bn offer and a regulator

In 2024/25 Premier League clubs turned over £6.8bn. Championship clubs managed £942m. Seven times less, according to Deloitte's Annual Review of Football Finance, in a division that sits one promotion away. That gap is what explains the two stories dominating English football this summer: an offer of money on the table and a state regulator that has only just started work.

What the Premier League voted for, and what still is not signed

On 30 July 2026 Premier League clubs unanimously approved a funded proposal for a new strategic partnership with the EFL. The league's official statement is deliberately spare and rewards a slow read: it says the proposal will be formally offered to the EFL for discussion with its clubs. It does not say a deal exists. In fact, the Premier League statement confirms no specific figure at all: the numbers in circulation come from press reports, not from the league.

The offer was formally put to the EFL in the first days of August. The institutional response was just as measured: the EFL notes the Premier League's position and awaits the formal proposal for its consideration. Its board will review the full detail (the benefits, the implications and how it fits the long-term interests of its 72 clubs) before discussing it with the membership and deciding on next steps.

So, as of 12 August 2026, the real state of play is this: a unanimous offer on one side and an open evaluation process on the other. There is no deal done, no signature and no rejection either. It has also been reported that within the EFL the proposal is seen as close to an earlier 2023 offer that was never concluded, which gives some idea of why the response has been cautious. Any headline calling this a historic agreement is running ahead of the facts.

The money: how much, when and where it comes from

According to published reports, the package would be worth around £1.5bn over a decade, an average of roughly £150m a year, and would be applied on a rising scale from the 2026/27 season itself.

• 2026/27: under £100m.
• 2027/28: more than £130m.
• From the third year: around £160m a year.
• All of that would sit on top of the £1.6bn every three years that, according to its own statement, the Premier League already invests in the rest of English football and in communities.

Where the money comes from matters too. Reports point to an increase in the Premier League's transfer levy, from 4% to 6%, and to contributions being proportional to each club's revenue. The package would also include a rescue fund for EFL clubs in serious difficulty and a pot ring-fenced for infrastructure, that is, money that cannot end up in wages or transfer fees. And, crucially for the Championship, a gradual reduction in parachute payments.

Parachute payments: the knot in all of this

Parachute payments are the compensation the Premier League hands to relegated clubs, to cushion the blow of losing most of their television income from one year to the next. They are paid on a sliding scale over three seasons: around 55% of the equal share of the TV distribution in year one, 45% in year two and 20% in year three. In practical terms, in 2025/26 each club in its first year of payments receives around £49m.

The effect on the Championship is enormous. Deloitte puts the parachute payments received by clubs in the division at around £185m in 2024/25. A handful of teams collect those sums while the rest compete on budgets nowhere near them. For the EFL, that is not a cushion: it is a permanent distortion of the competition. For the Premier League, by contrast, they are essential, because they give a newly promoted club the confidence to invest knowing that going straight back down will not sink it.

The collective outcome is well known. In 2024/25 Championship clubs racked up £436m in operating losses and £355m in pre-tax losses, with only two clubs in profit. And those numbers came out of a season in which the division's revenues fell for the first time since the pandemic.

Why clubs spend beyond their means

The short answer is that the prize is too big to resist. Deloitte calculated that the winner of the 2026 Championship play-off final would gain a revenue increase of at least £205m spread over three seasons, a figure that can approach £365m if the club also stays up in its first year. It is the most valuable match in the world, and it lasts ninety minutes.

Faced with a prize like that, an owner's arithmetic changes. Losing ten or fifteen million a year for three seasons is, viewed coldly, a reasonable bet if the chance of going up is meaningful. The problem is that twenty-four clubs make the same calculation at the same time and only three go up. The consequence is an entire division competing structurally at a loss, with financial sustainability resting on whichever owner keeps injecting money. When that owner tires, the club goes into crisis. That is the pattern the new regulatory framework wants to break.

What the regulator can and cannot do

The Independent Football Regulator was created by the Football Governance Act 2025 and oversees the top five divisions of the English men's game: Premier League, Championship, League One, League Two and the National League. Its chair is David Kogan, an executive with decades of experience negotiating broadcast rights for, as it happens, the Premier League and the EFL. It marks English football's shift from self-regulation to statutory oversight.

These, specifically, are its levers:

• Mandatory licensing: from the 2027/28 season no club in those five divisions will be able to compete without an operating licence, with the requirements published across 2026.
• Financial sustainability: to obtain a licence a club must show realistic financial plans, stress-tested and backed by credible funding.
• Owners' and directors' tests, corporate governance and an obligation to consult supporters.
• Heritage protection: since 5 May 2026 a club cannot sell or dispose of its stadium or appoint an administrator without the regulator's approval.
• A backstop power over revenue distribution: if the Premier League and the EFL cannot agree, either side can trigger a process that starts with mediation and, if that fails, ends with a binding resolution in which the regulator picks between the proposals submitted by each league.

And here is what the regulator is not. It does not set a salary cap and does not replace either league's own cost-control rules. It does not carve up the money as it pleases: under the backstop it chooses between the parties' proposals, it does not write its own. It does not rule on sporting matters or on fixture lists. It does not cover the women's game or the divisions below the National League. And, above all, it cannot force anyone to sign: its role is to force a resolution when negotiation stalls, not to negotiate on anyone's behalf. That is why both sides have so far preferred to keep talking to each other: the EFL statement expressly mentions that there have been conversations with the Premier League and with the regulator itself in recent months.

There is also a missing piece that could reorder the whole debate. The regulator is preparing its State of the Game report, which will look explicitly at parachute payments and revenue distribution across the pyramid. A draft is expected during 2026 and the final version in spring 2027, which means the financial picture of English football could still change after this package is either concluded or falls through.

"The report will shine a light on the financial pressures, governance gaps and structural risks in the English football pyramid, according to David Kogan, the regulator's chair."

For a Championship supporter, the summary is simple. There is more money on offer than ever before, but it has not been accepted yet. There is a promise to trim parachute payments bit by bit, which is the reform that would genuinely change the competitive balance of the division. And there is, for the first time, an outside referee with the power to impose a solution if the two leagues cannot agree. What happens over the next few weeks will tell us whether English football's revenue split is negotiated or decided from outside.

In the meantime, the money will be settled in boardrooms, but the table is still settled on the pitch. At Fut Simulator you can jump ahead and see how it all ends up:

• Simulate a full Championship, League One or League Two season and check the resulting table.
• Play the Championship play-offs with the six qualified teams and decide who goes up.
• Run the supercomputer: 10,000 simulated seasons to work out every club's promotion, title and relegation probabilities.
• Edit any result you like and watch the table recalculate instantly.