Premier League warned that EFL loan offer would INCREASE chances of clubs going bust amid fallout from coronavirus pandemic… as talks over specific terms of £50m Leagues One and Two Government bailout continue
- A £50m bailout offer from the Premier League was accepted in principle
- The terms of the offer to help clubs in Leagues One and Two are not yet agreed
- Premier League’s current offer consists of a £20m grant and a £30m loan
- Lower-league clubs fear that taking on a loan would effectively bankrupt them
The Premier League have been warned that their loan offer to the EFL would increase the risk of clubs going bust.
A week after the top flight’s £50million bailout of League One and League Two was accepted in principle, the two organisations have still not agreed on the terms of the package – much to the Government’s dismay.
The Premier League’s current offer is of a £20m grant and £30m loan, but as revealed by Sportsmail, the EFL wants the whole £50m to be a non-refundable grant.
The make-up of the £50m loan to EFL (led by chairman Rick Parry, pictured) clubs in Leagues One and Two is yet to be agreed
Premier League, led by Richard Masters, have been warned the offer could mean clubs go bust
Lower-league clubs fear that taking on a loan would effectively bankrupt them in the eyes of auditors because they would not be in a position to pay their debts back.
Jake Berry MP, the leader of the Northern Research Group who has been pushing for the EFL bailout, told Sportsmail: ‘Whilst the offer of £50m on the face of it appears generous, it’s not sustainable to make a significant proportion of that offer a loan.
‘Many EFL clubs simply don’t have the balance sheet to take on significant new debt and supporting clubs in this way is unsustainable.
Leader of the Northern Research Group Jake Berry says the EFL loan is ‘not sustainable’
‘We need the Premier League to pay up to support EFL clubs if they are to survive this season.’
The Government are now being urged to take a ‘robust’ stance with the Premier League to try and break the deadlock – with one source close to the negotiations suggesting they should be threatened with a levy on TV rights.
But Downing Street is refusing to intervene by using public money to save the EFL, despite on Thursday announcing a £300m package for other sports, including £59m for Premiership Rugby clubs.
Culture Secretary Oliver Dowden has insisted that the Premier League should help the EFL
Culture Secretary Oliver Dowden said: ‘Premier League clubs spent £1.2billion in the last transfer window. When the Premier League has got those resources, they should be supporting the EFL.’
Sports Minister Nigel Huddleston added: ‘We are doing everything we can to encourage Rick Parry and Richard Masters to come to a reasonable arrangement.
‘The fact that the initial deal has been rejected is a statement of fact and I appeal to Richard and Rick to both compromise and come to reasonable terms.’