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Can anyone explain parachute payments. please?



Danny-Boy

Banned
Apr 21, 2009
5,579
The Coast
Was reading about this a couple of weks ago, how the payments to clubs relegated from the Premiership are set to rise next season.

This didn't sem that important until the late run of Bolton into a position whhere they could get into the play-ofs. So what I want to know is:

Presumably Bolton, Wolves and Blackburn get payments this season. But if Bolton actualy got promoted via the play-offs (God forbid) would they STILL get the 2nd and 3rd year payments even though they are back in the Loadsamoney league? And if they don't what happens to that money?

It sems to me that any money which initially is allocated to a club which is relegated and then (benefiting no doubt from the first or second slugs) gets back up again, should instead be distributed across al the other clubs in the Chamionship afterwards. In other words Bolton's money would be allocated for the next two seasons across the opther teams which didn't make it.

Is this how it works? If not, how?
 


crodonilson

He/Him
Jan 17, 2005
13,488
Lyme Regis
If a club gets promoted then they do not get the parachute payments they would have been due. This is then redistributed throughout the rest of the league through a solidarity payment from the PL.
 


Gullflyinghigh

Registered User
Apr 23, 2012
4,279
Fairly certain you've actually got that right. It's my understanding that if a club is promoted straight back up then all future payments end up being split between all the teams in football league (not sure how it's divided out though), not just the Championship.

Hate the whole concept really, if a club overspends in the PL and finds themselves in the brown stuff after relegation then that really is their own fault, why are they given a helping hand?
 


Danny-Boy

Banned
Apr 21, 2009
5,579
The Coast
If a club gets promoted then they do not get the parachute payments they would have been due. This is then redistributed throughout the rest of the league through a solidarity payment from the PL.

Thanks for this, just hope that Bolton keep taking the moola then next season!
 


pasty

A different kind of pasty
Jul 5, 2003
30,178
West, West, West Sussex
Parachute payments = Rewarding failure.

Read somewhere this week that the team that finishes BOTTOM in The Premiership next season will receive a mind-boggling £60M. That's the same amount as City got for WINNING the bloody thing last season. I have a very real fear that if we don't get up this season it will be a number of years before we do, as we simply won't be able to compete financially with those coming down into The Championship.
 






pasty

A different kind of pasty
Jul 5, 2003
30,178
West, West, West Sussex
The reason they're there is to give Championship clubs a better chance of staying up in the first place - and it's been bloody successful at doing that, see: Stoke, Norwich, Swansea, Southampton, West Brom...

Sorry if I'm being dense, but I don't understand that statement. If you are saying the reason parachute payments are there is to give Championship clubs a better chance of staying up, then it makes no sense whatsoever as clubs that stay up don't get parachute payments.

Have I missed your point :shrug:
 






pasty

A different kind of pasty
Jul 5, 2003
30,178
West, West, West Sussex
They're there so promoted clubs don't need to take financial risks to be competitive, that's the whole point. Equally to support the established Premier League clubs who come down with massive wages.

Sorry mate, still don't get it. Promoted clubs don't get parachute payments.

If you are saying the payments are there so clubs can spend loadsa money to try and stay up, but don't worry, if they fail the financial blow of relegation will be softened by the parachute payments, then I go back to my original point, it is rewarding failure.
 


yxee

Well-known member
Oct 24, 2011
2,521
Manchester
Parachute payments = Rewarding failure.

Read somewhere this week that the team that finishes BOTTOM in The Premiership next season will receive a mind-boggling £60M.

Everyone in the league will get that £60m base rate due to TV money. There is a separate tariff to reward clubs based on their league position.

It's not rewarding failure, it's rewarding clubs for the success of competing in the top flight. Clubs are rewarded in the same way in the football league. The only difference happens to be that more people are interested in the premier league, so market forces mean their TV revenue is higher.

TV revenues are fair play-more people watch it, more money should go their way. Parachute payments on the other hand are a blatant market distortion that ruins the FFP regulations of the lower leagues.
 


Stat Brother

Well-known member
NSC Patreon
Jul 11, 2003
73,371
West west west Sussex
Hate the whole concept really, if a club overspends in the PL and finds themselves in the brown stuff after relegation then that really is their own fault, why are they given a helping hand?

Read somewhere this week that the team that finishes BOTTOM in The Premiership next season will receive a mind-boggling £60M. That's the same amount as City got for WINNING the bloody thing last season.

At which point you have to stop asking why do the Venky's own Blackburn.

Premier League football = Cash cow.

Premier League football ownership rules = lax at best.
 




halbpro

Well-known member
Jan 25, 2012
2,855
Brighton
In some ways you can regard it as rewarding failure, but what it really speaks to is the disparity between the Championship and Premier League in terms of income. Teams don't necessarily have to over spend in the Premier League to be in trouble financially if they were to get relegated to the Championship, in fact they could likely spend well within their means as a Premier League side and find it very hard to keep that up in the Championship. I mean in principle you could sign players to a season long contract every season, but with football the way it is you'd find it hard to keep hold of players and the transfer windows would go absolutely insane.

The other option is to write in automatic wage reductions if a team gets relegated, but that may make it hard to attract players. Personally I believe that should be a standard, and wages in football should be written as a percentage of the club's income up to a certain cap. That would mean that if a team is relegated then wages would automatically adjust. If this were standard then it would make no difference when attracting players, but at present I'm pretty sure only a few clubs write contracts this way.

However, at present, with the way contracts are structured parachute payments simply stop clubs going out of business. There are better solutions, but they'd require an overhaul of football as a whole. Parachute payments are simply easier and don't have to be forced upon clubs and players. Even the parachute payment system needs an overhaul really, it should be more closely tied to players wages than a simple cash injection into a club.
 


Gullflyinghigh

Registered User
Apr 23, 2012
4,279
Even the parachute payment system needs an overhaul really, it should be more closely tied to players wages than a simple cash injection into a club.

If the system had to remain then that would be a really good way of doing it. It'd mean that clubs going up with no real expectation of staying there (Blackpool) wouldn't be able to maintain roughly the same wage bill with the knowledge that regardless of the outcome, they'd cash in on for a few seasons.
 



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