EFL chair warns of £200M cash hole, legal action if relegation scrapped

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Football League (EFL) chairman Rick Parry told a parliamentary committee on Tuesday that clubs are facing a £200-million "cash hole" by September due to the coronavirus pandemic, according to Simon Evans of Reuters.

The EFL, which governs England's second, third, and fourth tiers, has been out of action since March. Clubs below the Premier League are even more dependent on matchday revenues.

"We are heading for a financial hole of about 200 million, a cash hole we need to fill, clubs will need to fill ... the cash hole toward autumn looks pretty grim," Parry told the Digital, Culture, Media and Sport Committee.

"Our objective, obviously, is to lose none," Parry said when asked about clubs going under. "We would like to emerge stronger, leaner, and more efficient, with a proper reset post-COVID."

On average, Championships clubs spend a greater percentage of revenues on player wages, and EFL clubs rely more heavily on matchday proceeds and ticket incomes than Premier League sides do.

"We need a rescue package. We also need to address the longer term or we will back into problems in two or three years, they need to go hand in hand," Parry added.

Parry, who was also the Premier League's first chief executive, said the leagues below the top flight require widespread changes to ensure their respective financial viability going forward. Those changes include the elimination of parachute payments for clubs relegated from the top flight which skew the competitive balance.

He also warned the Premier League that a proposal to scrap relegation to placate clubs resistant to completing the season at neutral venues could be met with legal action, saying "lawyers are going to get wealthy" if the top flight amends the format, according to BBC Sport.

"There would be a degree of outrage from a number of clubs in the Championship and it would be a breach of the tripartite agreement," he said.