EFL Clubs have started a discussion on a potential new approach to how revenue is distributed across the collective that, if adopted, could come into force from season 2019/20 onwards.
The proposals were presented to all 72 Clubs at the Summer Conference 2018, and follows an agreement by the EFL Board that the matter of how the EFL shares the revenue it generates could be amended to increase the certainty of additional income for League One and League Two Clubs if an agreed direction of travel can be reached.
The discussions considered the current distribution formula as outlined in the EFL’s Articles of Association and factored in the costs borne directly by teams in the Championship for Goal Line Technology and Select Group 2 Match Officials.
The opportunity to reassess the current model has arisen, in part, due to the need to determine how Domestic Streaming Revenue will be distributed in the long-term once the full value of the proposition is understood following its launch in 2018/19 and ahead of the new EFL broadcast deal coming into force in 2019/20.
Current projections for the distribution formula in 2019/20 based on the existing Articles, which are adjusted for RPI, have been calculated at 71.15% in the Championship, 17.16% in League One and 11.69% in League Two.
The EFL introduced two initial proposals that take into account the various income potential and expenditure factors and would look to fix the distribution formula at either the 2016/17 levels of 68.51% in the Championship, 18.70% League One and 12.79% in League Two OR move to a new split of 66.66% in the Championship, 20% in League One and 13.34% in League Two.
These first draft proposals have been developed on the basis that each Club retains the majority of its own income from Domestic Streaming (80%) whilst the costs of Goal Line technology and Select Group 2 officials would be met centrally by the League and not by the Clubs in the Championship.
The EFL Board remain neutral on the matter and recognise that Clubs will need time to consider any changes to the current approach and that further information may well be required. A positioning paper will be provided to Clubs to consider by the end of June 2018 before the Board consider feedback at their next meeting.
Once this process has been completed, a specific proposal will be forwarded to Clubs for their consideration ahead of further discussion in September with a potential vote on a formula change towards the end of 2018.
EFL Chief Executive, Shaun Harvey, said: “Today was about setting the scene and providing Clubs with the relevant information so that the discussion can develop over the course of the coming weeks and months.
“I would hope there is enough initial detail within the draft proposals for Clubs to be able to start having the necessary conversations with their Boards and colleagues so we can start to understand if making a change is going to be possible.”
In order for any new model to take effect, it would require a change in the EFL’s Articles of Association, which need the support of at least 75% of the membership.