Parachute payments need to be scrapped and a number of sustainability measures must be introduced if the English Football League is to thrive.
That's the view of EFL chief executive Trevor Birch who has called on a big reshape in how football is financed.
It comes after it was revealed that the 72 clubs across all three divisions posted losses of £243million - BEFORE the pandemic in 2018-19.
Parachute payments were first introduced during the 2006-07 campaign, and are seen as a way of softening the blow of relegation for teams that fall out of the Premier League.
But critics argue that they create an uneven playing field. This past season saw Norwich and Watford seal immediate promotions back to the top flight.
In a lengthy statement released today, Birch said: "In simple terms, the football pyramid’s financial future is under threat. In 1992 when setting up the Premier League, the tripartite agreement between the FA, the Premier League and the then Football League, stated, as a core principle, that Clubs in the EFL should not be financially disadvantaged, no worse off, as a result of the Premier League’s creation.
"However, nearly 30 years later, it is clear that is currently not the case.
"We need a system that can ensure EFL Clubs survive and thrive without incurring collective losses of £243m pre-Covid in 2018-19 and the need for owner funding across the EFL of approximately £400m a year. Our model needs to be about sustainability, rather than philanthropy or speculation.
"In our view, the only way to achieve this sensibly is through implementation of a series of sustainability measures which includes EFL clubs receiving 25 per cent of pooled revenues, abolishing parachute payments and implementing effective cost control mechanisms across the league.
"Quite simply, it is no use spreading money around in a fairer way only for it to be spent as quickly as it comes in."
QPR boss Mark Warburton is among many managers who laments the parachute payment system - especially during a time when club's coffers are running especially low due to the knock-on effects of the pandemic.
Speaking to the Mirror , he said: "There's some big, big clubs in the Championship and still people don't realise.
"It's a really big league but the parachute payments are the big problem. That's the issue. It's placing a gap between teams now, which has always been part and parcel of the game.
"But it's getting harder to surmount that now.
"At a time when budgets are really being impacted by Covid and teams are in a really bad place, you've got three teams coming down with these parachute payments that will dwarf anything they spend on their yearly budget.
"It's a tough ask now.
"Watford going back up, Norwich going back up. It does tell you that the gap is going to prove ever harder to close."
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