David Conn: Distribution of TV revenue is key to future of League

Post of chief executive is likely to remain open until internal disagreements over possible reorganisation are resolved

The Football League this week announced a diplomatic ceasefire in the internal conflict which has raged since last April's collapse of ITV Digital, but the First Division clubs' continuing demands for more money and dominance suggest that without help from the Football Association – and, if it has the will, the Government – a nasty little war has only been postponed.

The respite agreed following an all-day board meeting at the League's Preston office on Thursday, attended by Theo Paphitis, Millwall's chairman and spearhead of the First Division's self-appointed "review panel", was that Second and Third Division clubs will now for the first time be informed of the First Division's demands and be invited to comment. A representative from each of the Second and Third Divisions will be invited to join – and presumably be outvoted by – three First Division representatives, to consider the League's future.

Tony Scholes, the chief executive of Preston North End, who is on both the League's board and the review panel, is, as a member of a small sensible tendency, emerging as a key figure. He said: "We had a very positive meeting, and have agreed to conduct a review of the organisation and structure of the Football League." But he stressed that the League's problems cannot be resolved in isolation: "We will consult with all of football, and if results are to be achieved, all different bodies have to be involved."

The start of the season has relegated ITV Digital's collapse into last season's story, but this is a bad misreading. Carlton and Granada may have ruthlessly scrapped their joint venture in the summer, then successfully argued in court they were not responsible for its contractual obligations, but the League clubs are yet to be devastated by the consequences. They still have cash for a few months, from season tickets and the replacement, £96m, four-year TV deal with BSkyB. The idea, spread even by Tessa Jowell, the Secretary of State for Culture, Media and Sport, in her disappointing response to the crisis, that League clubs had already been overspending, failed to address the £4m hole blown into all First Division clubs by Carlton and Granada's non-payment. The clubs are, as Scholes nicely understated it, "in significant difficulties".

But, with nerve and vision required, the response of the vocal First Division clubs has mostly been aggressively insular and petty. In July, the nation saw a united front of League chairmen marching with placards to Carlton's London offices, but, beforehand, several had indulged in a mauling of the League's chief executive David Burns which some present described as "blood on the carpet" and a "kangaroo court". The chief complaint was the BSkyB deal; not only its value – which, League sources say, was the best around, negotiated up by Burns from an initial £11m per year to around £25m – but the four-year term.

The context for the fury, reportedly expressed most forcibly by Simon Jordan of Crystal Palace, Haig Oundjian, Watford's chairman and Paphitis, with his withering remark that the League's executive "couldn't run a kebab shop", is that the clubs do not want to be in the Football League for that long, or at all. The fundamental problem, which ITV Digital's collapse has only highlighted, is the unsustainable gap between the League and its breakaway offshoot, the Premiership, now up to around £25m per year for an average club.

The current unrest follows the proposals last year for the "Phoenix League" or a breakaway Premier League II, which came to nothing, but to which most League clubs still aspire. After that setback, and a meal in a Chinese restaurant called by Charles Koppel, chairman of Wimbledon, some First Division clubs began to kick around "restructuring" proposals. They appointed a "consultation panel" consisting of Paphitis, Oundjian and Andrew Watson, Burnley's chief executive, which led to the standard English business response to any problem – appoint consultants.

A report, by KPMG, was produced by 12 July, and has since been seen only by First Division clubs; Thursday's meeting concluded it should finally be sent to Second and Third Division clubs for comments. But the phrase "thudding on to doormats" will not apply. The report, which I have, is so thin in content and scope that postmen should have little difficulty slipping it underneath football's lower division doors.

"The scope of this report has been limited," KPMG says, "to conducting... interviews with parties agreed by the First Division... We have not consulted with fans of the relevant football clubs." The results of this sealed discussion are most interesting for the absence of magical solutions discovered. Disappointingly for those who imagined solidarity survived in the League, "more than 70 per cent" of clubs consulted wanted to break away to form a "Premier League II". Yet they recognised this was unlikely to happen. They did not believe they should independently break away, or make separate commercial deals. They also believed the League's competitive structure is right, and that promotion and relegation should be maintained. In other words, the clubs are stuck with the League, whose structure has stood the test of time. The talk of "restructuring" is really about rearranging the chairs in the League's boardroom to give them more money from the too-little which is left.

One proposal, generally regarded as sensible, is for the League to have independent non-executive directors who can plan long term, rather than representatives who disappear when their clubs are promoted or relegated. The other looks like a design for chaos: that each division should have its own chief executive, along with one from the League. On Thursday, the League resolved to invite applications for a chairman, but there is no prospect of a chief executive being appointed until some of the turmoil settles down. The proposals most likely to enrage lower division clubs are that First Division should be given complete control, 75 per cent, of League votes, and more money – they are looking for 80 per cent of the TV deal.

John Bowler, the chairman of Crewe, arguably a shining example of a club well run for long-term stability, said they are facing shortfalls of £800,000 this year, which they can meet from reserves, and £1m next, which could be more difficult. But he was vitriolic about the activities of the First Division clubs: "It's typical of football; turning in and fighting each other instead of uniting to meet the common challenges. These proposals, which seem threatening because they have been worked out in secrecy, appear desperately short-sighted. We need our elected board to work creatively on building up the League, and involve the FA."

The report acknowledges that fundamental change cannot come from tinkering with the League's internal organs. Players' wages are too high, it says, and the gap with the Premier League is too huge. The clubs should: "lobby for further distribution of revenue from the Premier League".

Scholes' statement about the need to involve all football bodies is the heart of the matter. In 1992 the Football League's First Division clubs, frustrated about sharing money and voting rights with the smaller clubs, plotted to break away to form their own league. The Football Association, the game's overall governing body, rejected a plea for unity by the League, produced its own consultants' report, the Blueprint for the Future of Football, and, scandalously, backed the breakaway, producing the FA Carling Premier League. This ended over a century of distributing money relatively evenly, on the threshold of the game's greatest ever boom, fuelled by satellite television.

Ten years of feasting on all the money later, the Premiership this summer dropped "FA" from its title. A consensus is now recognising that football's problems cannot be solved unless the Premier League is brought back into a unified whole. Richard Scudamore, the Premier League chief executive, was previously at the League, but his job is to please the Premier League chairmen who gave him his £650,000 pay packet last year, and they have little interest in the Football League, except terror of becoming one of the three clubs relegated into it.

Since the Football Task Force's ignominious conclusion in 2000, Tessa Jowell's Government has not addressed the game's structural faults – although this week she pledged increased backing for Supporters Direct, the initiative to encourage fans to become involved in running their clubs. Adam Crozier, the FA's chief executive, who, invited by Paphitis, attended a First Division "review panel" meeting last month, has a crucial role. He has continually expressed determination to constructively steer the national game, which is again in crisis and again threatening to tear itself apart. Crozier's, and the FA's, challenge is to rise above the Achilles' heel of squalid politics, and provide the vision, guile and – here's a football word – bottle, to re-unify the game which should never have been allowed to fracture, fatefully, a decade ago.

davidconn@freeuk.com