A group of Championship clubs are urging the EFL to sell a stake in their three divisions to private equity in an attempt to safeguard their future.

Sportsmail has learned that an alliance of six clubs are working with American investment bank JP Morgan to drive interest in a sale, with the clubs’ valuation of the EFL at around £2billion.

That figure is £500million higher than the only concrete offer the EFL have received to date from TPG Capital, full details of which can be revealed today.

EFL chairman Rick Parry rejected TPG’s initial approach last month but their £300m bid for a 20 per cent stake, rather than the £400m the clubs want, remains on the table and they want a deal by the end of the year.

Other clubs are opposed to an equity sale, particularly if it involves diluting their voting rights, and want the EFL to intensify their talks with the Premier League over a rescue package.

TPG’s proposal is being taken seriously enough to have been presented to the EFL Board, however, while a number of clubs are also understood to have held individual talks with the American company.

Their offer is based on a £300m investment in the EFL in return for a fifth of its commercial income and 51 per cent voting rights, effectively giving them control of all future commercial and structural decisions.

Talks with the EFL have been conducted by Malte Janzarik, TPG’s head of European investments, and Dominic Coles, a former BBC executive and chair of rights company GB Sport Media.

Sportsmail has learned the full details of TPG’s proposition, which is to give £270m to the clubs to help cope with financial challenges caused by Covid-19, plus a further £30m set aside to create a new centralised commercial operation to manage all future broadcast, sponsorship and streaming negotiations.

Of the £270m payout, £135m would be paid to the EFL up front, with a further £33.75m due after each of the next four years.

In addition, TPG are willing to donate £3m to the EFL Trust, the organisation’s charitable arm which runs educational and fitness projects in the communities served by its 72 clubs.

TPG’s offer document does not specify how their investment should be distributed among the clubs or even between the divisions, which would be a source of considerable tension if it was accepted, but makes clear that their business model is based on increasing the value of the EFL’s broadcast and commercial deals.

The proposal states that the current £119m-a-year domestic television contract with Sky Sports in particular is significantly undervalued, with TPG claiming that they could bring in a contract worth £200m a year for the next rights cycle beginning in 2024.

It is made clear that these figures are partially based on the League Cup continuing. However, this is in doubt beyond 2024 due to the planned expansion of the Champions League which would restrict the involvement of top clubs and therefore reduce its value.

Despite this, TPG’s projection of the EFL’s overall revenues based on domestic and international broadcast rights and sponsorship deals shows a rise from the current figure of £190m to £325m by 2025.

TPG also plan to significantly expand the EFL’s streaming service, initially in overseas markets, with over 500 matches to be available from the 2022-23 season.

Source: Daily Mail

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