The Premier League has been given a mandate by its clubs to negotiate a new agreement with the EFL and the Football Association covering issues such as financial distribution and the future of domestic cup competitions.

The PA news agency understands the ‘New Deal For Football’, which would result in the Premier League distributing a higher percentage of the revenue it generates to the EFL and the Pyramid than it currently does, received the backing of clubs in an informal vote at a top-flight shareholder meeting on Tuesday.

The league will now discuss the proposals with the EFL and FA in a bid to seek a match-wide deal.

Watford and Norwich benefited from parachute payments after last season’s relegations (Steven Paston/PA)

It is understood that the ‘New Deal’ would see the introduction of merit-based payments determined by the finishing positions of the EFL’s 72 clubs, primarily to try and reduce the ‘cliff edge’ of revenue between the Championship and the Premier League.

Reform of financial support for relegated clubs is also under consideration, amid repeated calls from EFL chairman Rick Parry to abolish parachute payments.

The Premier League still believe in the principle of offering such support to relegated clubs, arguing that it is essential to give rising clubs the confidence to invest in competitiveness in the top flight with less fear of the consequences of relegation.

The new deal also proposes the creation of an infrastructure fund to support lower league clubs with capital investments such as upgrading stadiums and academies.

Alongside the new distribution model, cost controls will govern the ratio of spending on salaries, transfers and agent fees to Premier League and EFL club turnover. UEFA rules will limit such spending to 70% of turnover from 2025, but it is understood that a higher percentage would apply to English clubs.

The deal will also address scheduling issues, with Premier League clubs believed to be almost unanimous in their desire to scrap FA Cup third and fourth round replays from 2024-25.

BBC pundit Dion Dublin makes FA Cup draw
Replays could be scrapped in the early rounds of the FA Cup (Ian Walton/PA)

This is when UEFA’s men’s club competitions undergo a change in format, requiring more matches to be staged for those involved.

The future of the League Cup will also be discussed as part of the negotiations.

Earlier this year, then-sports minister Nigel Huddleston indicated that the Premier League and EFL could face a financial split solution imposed by an independent regulator if they failed to agree .

The prospect of a regulator being introduced appears to be receding, with a reference to presenting legislation to create one scratched from a written response from current Sports Minister Stuart Andrew last week to a question of Labor MP Kevin Brennan.

Parry requested that the broadcast and broadcasting rights for the EFL and the Premier League be sold jointly, with the EFL receiving 25% of the total revenue.