Premier League clubs have unanimously voted to approve a new funding proposal for EFL clubs, a deal Watford chairman Scott Duxbury described as "massive" for the club's finances.
The new Independent Football Regulator insisted in February that "the clock was ticking" for new financial redistribution to be agreed, otherwise a deal would be imposed.
An agreement between Premier League clubs has now been ratified and has been passed onto the EFL for approval.
According to Sky News, the deal would see approximately £1.5 billion more sent to lower league clubs across 10 years, with the hike funded by increasing a transfer levy from 4% to 6%.
For example, Morgan Rogers' recent £117m transfer from Chelsea to Aston Villa would incur a payment of £7.02m under the new proposal, as opposed to £4.68m under the current one.
Funding would begin immediately - with the same report stating that an annual payment of less than £100m would be possible for 2026/27, followed by £130m next year and a consistent value of £160m per year from there.
Exclusive shots as Morgan Rogers arrives for his medical with Chelsea ahead of completing a British-record £117m move from Aston Villa 🔵
Rogers is then expected to sign a six-year contract at Chelsea with the option of another year until 2033 📝 pic.twitter.com/LHC9CmeYYa— Sky Sports News (@SkySportsNews) July 20, 2026
How the funds would be distributed between clubs is not yet clear - but speaking earlier this week, Duxbury was adamant it could make a big difference to the Hornets' fortunes.
He said: "Everything with the EFL is money and that's why Thursday's vote is so crucial for us.
"The redistribution of the centralised revenue will have a massive impact on this club. With the numbers that are being talked about, if they are delivered, then we'd move quickly to a break-even position, which would be fantastic.
"So you'd get to a point where you're selling players, then all of the proceeds go back into the squad, rather than to fund losses.
"It's not just about a new deal to fund losses, it's about sustainability. The league is not sustainable in its current format, you can't keep asking owners to put in £20-30m to exist. It just makes no sense.
"This deal is vital and the Premier League do have a responsibility because we make the Premier League part of what it is. The promotion, relegation, the play-offs, it's integral to the success of the Premier League.
"If it's implemented this year, that makes a massive impact on our resources and our ability to further strengthen the squad. Let's see."
Watford posted a £16.1m pre-tax loss in 2025/26 with loans from owner Gino Pozzo sitting at £53.5m.
The £18m sale of Yaser Asprilla was included in that financial year, but no such sale was made in 2025/26.
Giorgi Chakvetadze's move to Udinese is said to have banked the Hornets millions of pounds but Duxbury accepted that, while he would like to keep the current squad together, the nature of the market could see somebody like Nestory Irankunda sold before September.
