Premier League clubs to receive millions of pounds to ease cash flow issues

Football clubs in the English Premier League are reportedly set to receive advance payments worth millions of pounds from television and league positioning fees. Such an effort will be made to ease their problems related to cash flow.

The 20 clubs participating in the league agreed with the funding proposal in order to cope with their lack of income because of the ongoing coronavirus crisis. It is expected that payments worth up to £20m might be made.

The payments would include the partial release of the clubs' "merit payments," which is the prize money that they would have received at the end of the season. Also, "facility fees" would be released depending on the number of matches that each club had shown live on TV.

BBC reports that the Premier League clubs would also receive some part of their funding for the next season during the summer months. The worldwide situation is deteriorating because of the novel coronavirus pandemic and the sporting industry is among the worst-hit.

Football seasons across the globe, along with other major sports events have been halted to contain the further spread of the virus. The Premier League has been postponed for an indefinite period. It remains unclear when and whether the current season could be restarted at all.

Amidst such an emergency, clubs are struggling to keep their financial accounts in a profitable trajectory. To overcome or mitigate the current financial risks facing the football clubs in England, the Premier League's decision should offer some relief to the stakeholders of the sport.

The arrangement of advanced payments for this season was a unified decision taken by the clubs during the shareholders' meeting last week.

There would be some adjustments made to these payments based on the final standings on the points table at the end of the season.

The total amount of money that would initially be released would be carefully decided, and the individual allocation would be based on the cash-flow problems each club is experiencing. The decision would also consider the worst scenarios; if the current season is cancelled and if the broadcasters demand their money back.

It has been understood that the Premier League would face a potential loss of £762 million in the form of broadcast revenue in case the season cannot be resumed.