At an emergency meeting at Walsall's Bank's stadium yesterday, football league club chairman voted to accept a new solidarity deal from the Premier League.
There had been concerns by league 1 and 2 clubs that the move to increase parachute payments to clubs relegated from the Premiership along with proposals to increase payments to Championship clubs would be the first steps in creating a premiership league two instead of the existing Football League Championship.
In essence, the deal was at the instigation of current and former Premiership club chairmen who feared relegation would lead to financial disaster for their clubs and so they sought protection from the Premier League in the form of parachute payments.
Both the old and the new deals are designed to help these clubs rather than to aid lower league clubs financially. It was this fundamental unfairness that led to the clubs in the lower leagues to initially reject the deal and to try to renegotiate for a better offer, but The Premier League are not legally bound by what is a goodwill gesture on their part to donate any money to any club outside the Premier League.
Championship chairman, including Coventry's Ray Ranson had been generally in favour of accepting the original deal which was rejected last month by the league 1 and 2 clubs.
Yesterday's meeting was boycotted by the Championship chairmen in a move to put pressure on the others to accept the take it or leave terms.
The deal has been controversial and acrimonious from the start with accusations of trying to create a Premier League two by the back door and by the fear that the premier League would withdraw any offer now and in the future. Both sides had been playing hard ball with the premier League say "Take what's on offer or leave it" and the Football League division 1 and 2 clubs wanting to hold out for a better deal.
In the end the smaller clubs had to accept the deal or risk losing everything, but the Football League admit there are worries that the financial gulf between the Premiership and the rest will widen still further, but more importantly, the gap between Championship clubs and leagues 1 and 2 will become so big that it will become very difficult for clubs promoted into the Championship to compete, especially with the teams recently relegated from the Premiership.
The new payments will start from next season and will mean parachute payments to relegated clubs will increase from the current £16m a year for two years to £48m over four years and will consist of £16m a year for two years followed by £8m for the next two years.
Championship clubs which do not get the parachute payments will get £2.3 million a season, League One sides £325,000 and League Two sides £250,000. Under the current scheme Championship clubs received between £1.4m and £0.75m a season.
A Football League spokesman said of the new deal, “Following a frank but constructive meeting at Walsall’s Banks’s Stadium earlier today, Football League clubs have voted to accept the Premier League’s revised solidarity and parachute payments proposals."
“Whilst many clubs expressed concerns about the proposals, their acceptance was considered the only viable way forward. The Football League will now work in good faith, with the Premier League, to ensure that the resulting contract and regulatory changes are good for both competitions and football as a whole.”
Coventry City's chairman Ray Ranson has already announced that the £2.3m the Sky Blues will receive will go toward running costs and not into a transfer funds. Mr Ranson has already fixed the budget for his new manager for the coming season.