Parachute Payments - a fair system or not?

[Surf's Up]

Been thinking about this a bit recently - looking at the Championship table the top half is pretty much packed with recent ex Prem teams which makes it incredibly difficult for teams coming up from Div 1 to compete. Last year was a significant exception but if you haven't got an exceptional manager or Parachute payments your f**ked (did I just say Neil Warnock and Nigel Adkins are exceptional managers?!!). Are they fair?

 

[Boroseagull]

Likewise teams that drop out of the football league and into the Conference receive parachute payments for three years, doesn't seem to help them!

 

[Rugrat]

Touchy subject for me. I think the whole system is totally f***ed and clubs outside the Prem have little chance of ever developing or aspiring to compete at the top level without the support of a benefactor and it feels wrong.

The wages paid to Prem players is obscene and parachute payment have to be in place otherwise pretty well every relegated club would go bust straight away, that's why they get it (I believe). It's not intended to give them an extra advantage just recognises they have financial obligations that aren't always easy to unravel. So, given the financial structure of football, I have to say it's fair

 

[Lord Bracknell]

It might not be completely fair, but it is the only way clubs could get promoted from the Championship and compete in the Premier League without risking the club's future

No it's not. Promotion to the old First Division (and relegation from it) worked perfectly fine before the conspiracy that is the Premier League happened.

 

[Rugrat]

No it's not. Promotion to the old First Division (and relegation from it) worked perfectly fine before the conspiracy that is the Premier League happened.

Just clarifying my point above your post ... it's only fair because of the obscene nature of Prem wages. The whole system caves in without them when a club gets relegated and can't offload half their squad because they're not good enough for the Prem league and clubs outside the Prem can't afford their wages .... Winston Bogarde may be an extreme example but you get the jist

 

[sparkie]

Not fair at all.

Clubs that go up ( and not just clubs going up ) just need to be a bit more clever with their contracts. They need to specify wage reductions if relegation occurs, and any team that does not do this ( QPR this year I beleive ) is being extremely foolish.

It is totally unfair that they can afford higher wages for players just because they were in the Premier League 1 - 4 seasons previously.

 

[mikes smalls]

If different teams get promoted then relegated every season it can only made it harder to get promoted. The parachute payments are a badly disguised attempt at creating a 2nd premier league. Looking at the current top six only Cardiff have never benefitted from the payments.
The play offs are the one thing which keeps the Championship going as at least half the teams have a chance of reaching the "promised land".

 

[Hotchilidog]

No it's not fair at all, in fact it totally distorts fair competition in the Championship and gives former prem teams a competitive advantage not available to their opponents. Premiership clubs should simply structure their contracts to have a relegation clause in them so that if they do go down their finances are structured properly. After all if the players were not good enough to stay in the premiership why should they retain premiership wages? It is a joke and it encourages lazy financial management by football clubs and rewards failure. The payments should be stopped.

 

[Lord Bracknell]

The ONLY reason that teams that have been relegated from the Premier League struggle financially is that they (like every other team in the Football League) are denied direct access to a fair share of the TV money that English (and European) football generates. Parachute payments are intended to compensate (some) clubs for that.

But even the Clubs at the lower end of the Premier League have restricted access to this huge pot of money, because of the formula that is used to distribute it. The outcome is an increasing distortion of the finances of professional football that can only lead to more clubs going bust. The football authorities are powerless to change things - because the rules have been drawn up to GUARANTEE that a small number of major clubs (Arsenal, Manchester United, and a few others that break into this small group by being bankrolled by billionaires) never run the risks that every other club now does.

The formula CAN be changed, but the big boys refuse to countenance this. Football and football fans are the losers.

 

[withdeanwombat]

Didn't the Albion have a 999 year lease on Steve Foster at 6 billion quid a week when,through the cheating barstewards of the old first division - they all being better than us - we got relegated without parachute payments and in a brief geological moment found ourselves in Gillingham ?

 

[Rugrat]

Not fair at all.

Clubs that go up ( and not just clubs going up ) just need to be a bit more clever with their contracts. They need to specify wage reductions if relegation occurs, and any team that does not do this ( QPR this year I beleive ) is being extremely foolish.

It is totally unfair that they can afford higher wages for players just because they were in the Premier League 1 - 4 seasons previously.

As a concept yes but (and it's a generalism) if a club really wants to stay in the Prem it has to buy players capable of keeping them in and those players (generally) want the security or are just plain greedy and won't agree to such contracts. It's all about supply and demand. I accept that this season Norwich and Swansea may prove to be exceptions but that's what they are.

QPR are a good example but Barton, for example, would've likely told them to FO if they presented a contract like that, even Zamora .. why would they agree to that when they know they can get a less constraining contract elsewhere?

Blackpool is another good example. They didn't expect to stay up and didn't spend, they took the money and the Chairman robbed it. They're using the parachute to keep them in contention but not to any great extent.

As I'm trying to say the whole system is f***ed and unfair generally. But Parachutes are a necessary evil given it's got so out of control

 

[Triggaaar]

The wages paid to Prem players is obscene and parachute payment have to be in place otherwise pretty well every relegated club would go bust straight away

Just clarifying my point above your post ... it's only fair because of the obscene nature of Prem wages. The whole system caves in without them when a club gets relegated and can't offload half their squad because they're not good enough for the Prem league and clubs outside the Prem can't afford their wages

Or... contracts could include relegation pay cuts. That's how it should be.

 

[Dirk Gently]

How long have you got? I could give you several thousand words on this......and have on blogs/articles before now.

But briefly, no, of course they're not fair - but then again they're not designed to be. They're the Premier League using its money to lessen the blow to its clubs which are relegated from it. Without parachute payments, PL clubs outside the big 5 would spend less because the risk of administration in the event of relegation would be so much greater. With it they spend more and make the PL more attractive to sponsors and broadcast partners - because it's less uncompetitive than it would be otherwise.

The PL clubs also want to get back to the land of of money as quickly as possible so this sweetens the pill of relegation and gives them every chance of coming straight back.

But the PL is a organisation which exists to represent the interests of its 20 member clubs - why would they care about being "fair" or giving other clubs a chance to join the party?

(PS - on a similar vein, why do you think the PL has never carried out a key part of its original commitment to reduce to 18 clubs? Self-interest is everything there.)

 

[Triggaaar]

if a club really wants to stay in the Prem it has to buy players capable of keeping them in and those players (generally) want the security or are just plain greedy and won't agree to such contracts. It's all about supply and demand.

Yes it is about supply and demand, but you're saying that on one hand these players are good enough to demand the security of high wages every year, but on the other hand they're not good enough for the club to sell if they do get relegated. You can't have it both ways.

QPR are a good example but Barton, for example, would've likely told them to FO if they presented a contract like that, even Zamora .. why would they agree to that when they know they can get a less constraining contract elsewhere?

Their contracts should include relegation release clauses, so if other clubs would give them contracts when initially sold, they would after relegation too. Also, would Barton and Zamora really be happy in the Championship anyway?

 

[Rugrat]

Or... contracts could include relegation pay cuts. That's how it should be.

But no (well you might find 1!) player that's capable of keeping a club in the Prem will agree that. Lots of players would but they're not the ones these clubs need

 

[Rugrat]

But briefly, no, of course they're not fair - but then again they're not designed to be. They're the Premier League using its money to lessen the blow to its clubs which are relegated from it. Without parachute payments, PL clubs outside the big 5 would spend less because the risk of administration in the event of relegation

100% agree ... but it's not the parachute that's unfair it's the entire structure that's unfair. Without parachutes I'd argue that many clubs wouldn't even want promotion and that could f*** up the entire competitive structure of the Football League

 

[Triggaaar]

Without parachute payments, PL clubs outside the big 5 would spend less because the risk of administration in the event of relegation would be so much greater. With it they spend more and make the PL more attractive to sponsors and broadcast partners - because it's less uncompetitive than it would be otherwise.

Fair point, although I imagine it would take a fair amount of statistical analysis to see if it was really working as you imagine.

The PL clubs also want to get back to the land of of money as quickly as possible

I don't see why that's the case.

But the PL is a organisation which exists to represent the interests of its 20 member clubs - why would they care about being "fair" or giving other clubs a chance to join the party?

Sure, but the PL have to operate within the rules set by the FA, so they might not want to be fair, but the FA should be.

 

[Lord Bracknell]

How long have you got? I could give you several thousand words on this......and have on blogs/articles before now.

But briefly, no, of course they're not fair - but then again they're not designed to be. They're the Premier League using its money to lessen the blow to its clubs which are relegated from it. Without parachute payments, PL clubs outside the big 5 would spend less because the risk of administration in the event of relegation would be so much greater. With it they spend more and make the PL more attractive to sponsors and broadcast partners - because it's less uncompetitive than it would be otherwise.

The PL clubs also want to get back to the land of of money as quickly as possible so this sweetens the pill of relegation and gives them every chance of coming straight back.

But the PL is a organisation which exists to represent the interests of its 20 member clubs - why would they care about being "fair" or giving other clubs a chance to join the party?

(PS - on a similar vein, why do you think the PL has never carried out a key part of its original commitment to reduce to 18 clubs? Self-interest is everything there.)

As you say ... it needs a few more thousand words to tell the whole story.

The bit I would question is your assertion that the Premier League "exists to represent the interests of its 20 member clubs". I think the evidence is fairly clear that the Premier League exists to represent the interests of about 5 clubs. The rest are bought off and keep quiet.

If, of course, this were ever to be seriously threatened, the Big Five would simply exercise their threat to pull out and take their self-interest off into some form of European Super League.

 

[Dirk Gently]

100% agree ... but it's not the parachute that's unfair it's the entire structure that's unfair. Without parachutes I'd argue that many clubs wouldn't even want promotion and that could f*** up the entire competitive structure of the Football League

No argument with that. But the problem most people have is thinking that there is still an "entire structure". The PL regard themselves as being English football in its entirety thee days, and they don't care a tinker's cuss for the pyramid lower down. There are two structures - the PL and the FL and downwards, with a gaping great chasm between them (a few years ago, the average PL wage was 4.54 times greater than the average Tier One wage.)

Yes, the PL does pay £2.2M a season to each Tier One club and they laughingly call it "solidarity payments" - but really that's just to keep Championship clubs dependant on this money, so they can win votes on things like EPPP by threatening to withdraw it.

 

[Lord Bracknell]

Sure, but the PL have to operate within the rules set by the FA, so they might not want to be fair, but the FA should be.

No. The FA has been emasculated by the big boys in the Premier League.