Premier League clubs claim Leeds United and EFL financial future at risk due to Manchester City legal dispute
Top flight clubs are reportedly reluctant to commit to a 'New Deal' financially propping up the EFL and its members due to uncertainty over the outcome of Manchester City's legal challenge against the Premier League.
English champions Man City have launched an attack on the Premier League and its Associated Party Transactions (APT) rule, describing it as anti-competitive and discriminatory against Middle East-owned clubs.
A key issue in the UAE-backed club's dispute with the Premier League is the 115 charges levelled against City, alleging of financial rule-breaking such as the artificial inflation of commercial sponsorships above fair market value. City are sponsored by Etihad Airways and have several other commercial links to the Emirati state, which are alleged to have been used to strategically, and unlawfully, increase City's revenue therefore permitting greater expenditure on transfers, player wages and agent fees over a prolonged period, in which they have won eight Premier League titles.
Following City's unprecedented legal action to amend rules limiting spending in the Premier League, fellow top flight clubs are said to be more reluctant to commit further resources to the EFL. This is due to the possibility of needing greater funds to compete with the likes of City, if their suit against the Premier League is successful.
According to a report in The Times, one prominent Premier League source has said: “If we have to spend more to even try to keep pace with clubs like City, we might need to hold on to that money.”
EFL clubs are hopeful of an additional £150 million per season from the Premier League, spread across six years, as part of the 'New Deal For Football', on top of the existing '£110 million in solidarity payments and £40 million in youth development funding'.
Talks over the New Deal collapsed earlier this year, shortly after City's claim against the Premier League was filed, highlighting the apprehension towards the pyramid-funding deal worth £900 million.
Many EFL clubs rely on Premier League funding for their survival and reluctance to commit to a New Deal has already triggered clubs in the Football League to explore alternative options with Championship sides, including Leeds, set to propose a loosening of financial controls at this week's Annual General Meeting in order to avoid several clubs breaching PSR regulations en masse over the coming seasons.