Football watchdog consults on backstop costs amid fears of New Deal stalemate

English football’s regulator is consulting on rules that will further intensify the cost pressure on clubs if the Premier League and English Football League (EFL) fail to reach agreement on a landmark financial redistribution deal.

Sky News has learnt that the Independent Football Regulator (IFR) has notified the 116 clubs it regulates that it is launching a quickfire consultation on proposals that would allocate the costs associated with it using its 'backstop' powers to impose a settlement on the sport.

Circulated last week, the IFR's memo is understood to indicate that all of the costs of the backstop process, including those incurred by the watchdog itself, would be levied on the Premier League and EFL, with the respective proportions of the bill determined by the IFR based on the conduct of the parties.

The four-week consultation has raised concerns among some clubs that another multimillion pound bill will ultimately be heading their way, even if their respective competition organisers are technically liable to pay it.

"It's meaningless whether a bill is sent to the Premier League and the EFL - it's the clubs who end up paying it," said one executive.

The initiation of the consultation process also comes as fears grow that talks between the top flight and the lower leagues are once again heading for stalemate - an outcome that would leave the IFR with no choice but to use its statutory powers to impose a settlement.

After the EFL board met on Thursday to discuss a £1.5bn, ten-year agreement proposed by the Premier League, board members of both then met with each other on Friday morning, according to football insiders.

Further talks were then held between the parties on Friday which also included officials from the regulator.

Although people close to the various parties insist that the EFL has not formally rejected the proposal tabled earlier this month, a counter-offer floated by the EFL board is understood to seek materially more funding from the Premier League than the £1.5bn currently on the table.

The existing proposal includes an average £150m in annual payments to the EFL, beginning in the forthcoming 2026-27 campaign, as well as a new 'lifeboat fund' for lower league clubs which find themselves in financial distress.

It also features a reduction in the parachute payments made to clubs relegated from the Premier League, as well as a pot of money ring-fenced for infrastructure investment at the EFL's 72 members.

The new funding would be in addition to the £1.6bn invested by the Premier League in the wider English game.

The Football Governance Act, which gave the IFR its far-reaching powers to block club takeovers and bar directors, allows the watchdog to make rules relating to the backstop costs.

Sources pointed out that the timing of the consultation was particularly significant given the ongoing talks between the parties.

One insider insisted that the opening of the process did not alter the IFR's position that it wanted the Premier League and EFL to reach a "football-led" solution to the issue of financing the English football pyramid.

David Kogan, the IFR chair, has said that the use of its backstop powers would reflect "an utter failure" by English football's power-brokers.

"Going forward, it's to everyone's benefit for football to try to reach this understanding," he told an industry conference earlier this year.

"But if the leagues can't find a new deal, those powers will be enacted, and we will be looking at things such as the current mechanism for parachute payments."

The Premier League's objective has been to reach a deal by the end of August, ahead of the publication of the first version of the IFR's State of the Game report, which will be released in the autumn.

The review will examine how financial flows within the game have shifted, including in relation to "cliff-edges" between or within leagues.

This week's confirmation that a large minority stake in Liverpool FC is - subject to regulatory approval - being sold to a consortium including the Amazon founder Jeff Bezos at a valuation of over $7bn will do little to dispel the sense of a widening chasm between English football's elite clubs and the rest of the pyramid.

The IFR backstop costs consultation process will end in early September.

The Premier League, EFL and IFR all declined to comment on Saturday.

(c) Sky News 2026: Football watchdog consults on backstop costs amid fears of New Deal stalemate