English Championship "Parachute Payments"

eirebhoy

It looks like the 3 teams that got relegated from the premiership last season will go straight back up again this season. Sunderland, West Brom and Birmingham were given £6.5m when they got relegated. That money will increase again by a couple of million next season. What is the reason for this? All it does is give the clubs a big chunk of their wage budget to keep their best players.

PHB

It's to stop them from going into administration due to wage bills.

A Dub in Glasgo

Shouldn't they be cutting their cloth to suit insead of being given handouts?

astrofool

Sunderland only got sorted out by being bought over, otherwise I doubt they'd be where they are now, otherwise it would have been brum 1st Derby second with WBA still a play off team.

Kingp35

Clubs have a financial structure set up based on Premiership TV money and premiership level sponsorship deals, also they will lose out through less people going to games and less merchandise being sold. Add to that the Premiership wage bill and a club could easily go under without this payment.

Saying that though I think its too much at the moment never mind the extra for next season. I think we will see a few yo yo teams emerge over the next few seasons.

redspider

I think the parachute payments do give the relegated clubs a financial advantage and an unfair one, which allows them more easily to yo-yo back up. However, the alternative is a Leeds Utd situation or going bust which is not good for the sport either.

The underlying problem though is the differential in the money between the top flight and the lower tiers. It is ludicrous that the biggest game in English football financially was between Sheffield Utd and Wigan. That makes no sense, where there is more to fight for and gain by avoiding relegation than winning the title. Little wonder that many of the teams are so negative in the top flight as their main aim, and we hear it often, is to reach 40 points and stay up.

The cause is due to separate TV money deals and the disparity between them. The only way to combat this for tier-2 and below is if they run a separate league and do not have promotion into the top flight and create a competing product. With the large differential in place currently, there may be a growing body to do so. Then, when push would come to shove, it would be up to the 20-premier clubs to decide whether they want to share 'their' money down to the lower leagues more or whether there will be a split.

It could also go the way of Italy (Spain too?) where the big names negotiate their own pieces of the TV pie. That would get rid of the humongous differential but it would also concentate the funds to the big-4 and the chasing pack. It may help the likes of Newcastle and other clubs (even West Ham, Man City) that have large fan bases (Sunderland?) and could sell their TV product for more.

Redspider