Parachute payments and FFP

scousefan · Sep 29, 2013

This is currently creating serious inequality between teams that come down and good championship teams that are trying to obey the FFP rules. It's clear that teams coming down are at financial risk and it therefore seems fair that they have some form of support. However the current substantial sums over more than one season seem to be too much for too long.

Is this system fair? - (I don't think so, but I'm not sure i fully understand the details)

If not what system should replace it?

I wonder if some of this money should be more dependent on the club quickly getting its costs down. It might be enough for the FFP rules to be relaxed fir them for 3 years and for them to get one years payment. Where they don't obey the rules, 'parachute' money could then be shared amongst the other championship teams.

sparkie · Sep 29, 2013

An unfair system.

Fair enough clubs may need it to stop going bust, but it should be a contingency fund, and if clubs draw on it they should have a transfer embago to stop them shelling out for the likes of Wayne Bridge on a new expensive contract.

Chicken Runner61 · Sep 29, 2013

So which clubs do you think benefited from parachute payments in the past few seasons or are you just suggesting its this season?

BensGrandad · Sep 29, 2013

I may be classed as cynical but I cannot see why the parachute payments are made or rather justified. All clubs are a business and as such decisions to pay players a huge wage should be taken with the full outcome of the business future considered. If a club is relegated whose fault is it that a club has stretched their finance to the limit to try to avoid it. Taking Palace just a an example they have gone out and signed 15 or so players at presumably high wages to face the Premiership and if they fail to stay up it is their own fault based on the decisions made by their board. So why should they receive money to help pay for those decisions. I do not see it for any club not because it is possibly Palace.

sparkie · Sep 29, 2013

Chicken Runner61 said:
So which clubs do you think benefited from parachute payments in the past few seasons or are you just suggesting its this season?

Every single club who has received the payments are in a better situation financially then they would otherwise be.

Reward for failure, skewed competition.

Chicken Runner61 · Sep 29, 2013

BensGrandad said:
I may be classed as cynical but I cannot see why the parachute payments are made or rather justified. All clubs are a business and as such decisions to pay players a huge wage should be taken with the full outcome of the business future considered. If a club is relegated whose fault is it that a club has stretched their finance to the limit to try to avoid it. Taking Palace just a an example they have gone out and signed 15 or so players at presumably high wages to face the Premiership and if they fail to stay up it is their own fault based on the decisions made by their board. So why should they receive money to help pay for those decisions. I do not see it for any club not because it is possibly Palace.

I think that the amount that you have to spend to even have a chance of staying in the prem on gaining promotion means that parachute payments are a necessity - whilst I would love to see Palace fall several divisions when they get relegated I want that to be because they failed on the pitch rather than from wages to players or having to sell. If we get promotion we would need to spend loads and getting relegated after that could threaten our whole existence as the repercussions of relegation after having built a new ground training facilities etc could be fatal.

FFP is going to make prem relegation worse and the knock on effects of relegation effect whole divisions so we need some form of adjustment to stop this. I think its a case of when the boot is on the other foot.....

Chicken Runner61 · Sep 29, 2013

sparkie said:
Every single club who has received the payments are in a better situation financially then they would otherwise be.

Reward for failure, skewed competition.

I don't think when you take the cost of wages to players out they are. When FFP kicks in without those parachute payments clubs relegated would fail making the whole division unstable.

Are you going to ban rich owners next?

BensGrandad · Sep 29, 2013

We shall have to agree to disagree as I think that spending of the money on promotion is a self induced debt that could be avoided by careful planning on the run in to promotion by re enforcing the squad then with promotion in view. I would hope that we would prepare for promotion long before that day arrives.

Lord Bracknell · Sep 29, 2013

The point of parachute payments is to ensure that the elite level of English football is restricted to teams who have been there before. Newcomers aren't welcome.

Chicken Runner61 · Sep 29, 2013

BensGrandad said:
We shall have to agree to disagree as I think that spending of the money on promotion is a self induced debt that could be avoided by careful planning on the run in to promotion by re enforcing the squad then with promotion in view. I would hope that we would prepare for promotion long before that day arrives.

I'd rather see ways of reducing players (starting with the Prem) wages so that costs can be brought down across every division and we can get back to teams competing on a level pitch. QPR are going to get promotion because they can buy players because of their owners not because of parachute payments.

And even FFP won't stop clubs using their owners to plough in money in massive sponsorship deals that would have not gone to those clubs. Don't forget FFP is going to be based on income - thats going to work against clubs that can't get massive deals like emirates AIG etc etc. This is going to make corporate deals and plastic fans from around the globe more important.

Chicken Runner61 · Sep 29, 2013

Lord Bracknell said:
The point of parachute payments is to ensure that the elite level of English football is restricted to teams who have been there before. Newcomers aren't welcome.

You could say the same about FFP LB. How will parachute payments help Man U, Man C, Arsenal, Spurs, Liverpool & Chelsea to stay in the top six?

If the same Prem clubs get relegated and promoted surely eventually they would get enough money to break in? At least with P payments some of that money works its way to lower English clubs, the elite just use prem money on mainly foreign imports.

dougdeep · Sep 29, 2013

Lord Bracknell said:
The point of parachute payments is to ensure that the elite level of English football is restricted to teams who have been there before. Newcomers aren't welcome.

Spot on sir. The case of Wayne Bridge shows how unfair the parachute payments are, do you think he'd have gone to Reading if they'd offered the same wages as us?

yxee · Sep 29, 2013

It does represent inequality, but the source of the inequality is that far more people want to pay to watch you when you're in the premier league. So it's hardly unfair.

Anyone complaining about it probably has some ridiculous idea that the game of football should be stripped of capitalism. Never going to happen.

Chicken Runner61 · Sep 29, 2013

yxee said:
It does represent inequality, but the source of the inequality is that far more people want to pay to watch you when you're in the premier league. So it's hardly unfair.

Anyone complaining about it probably has some ridiculous idea that the game of football should be stripped of capitalism. Never going to happen.

Exactly - and corporate involvement makes it worse - I can't see Yeovil getting emirates can you? but they might get a shot at the prem.

beorhthelm · Sep 29, 2013

the parachute payments intend to keep the Premiership competitive, and avoid relegated clubs being instantly bankrupted. it would be better if they weren't there, but then it would be better if clubs didnt pay 20k+ a week to mediocre squad players. historically it hasnt helped clubs relegated, when i looked it up had to go back half a dozen seasons to find one where 2 of the 3 promoted clubs had been relagated the previous season. the money is generally spent on players who where not good enough for the premiership who have poor form or poor motivation. hence the relegation.

pipkin112 · Sep 29, 2013

The only way I can see relegated teams being less reliant on parachute payments, is all players in the premiership must have a relegation clause in their contracts. If their team is relegated, then their wages must come down by a certain percentage. I can't see it happening though.

sparkie · Sep 29, 2013

The problem is not parachute payments as such, but the imperfect storm of the combined effect of FFP and parachute payments.

One or the other has to go ( or be watered down ), and go soon.

How about if wealthy owners were allowed to put in the same amount as the maximum parachute payment ? ( obviously not for parachute payment teams ).

nwgull · Sep 29, 2013

Teams getting relegated have a huge financial burden on them in that they have to honour to 3-4 year contracts given to players on Premier League deals. When was the last time a team bounced back because of parachute payments? West Ham went straight back up 2 seasons ago, but even that was by the play-offs and weren't they bank-rolled to a large extent? If QPR go straight back up, it'll be because of their rich owners being prepared to throw money at the team, not parachute payments - they're predicted to make a 45 million loss this year! Parachute payments haven't helped Portsmouth, Wolves, Bolton or Blackburn, and it remains to be seen how Reading and Wigan do.

As for disparity with commercial deals. That's all down to the exposure and number of fans that each team get. Do you believe that it's unfair that Amex probably pay significantly more to BHA than Yeovil Town get from their sponsor?

yxee · Sep 29, 2013

pipkin112 said:
The only way I can see relegated teams being less reliant on parachute payments, is all players in the premiership must have a relegation clause in their contracts. If their team is relegated, then their wages must come down by a certain percentage. I can't see it happening though.

That would be sensible, but I don't think you can rely on every chairman being sensible until the punishment for defaulting on a debt is more than 10 points.

Herr Tubthumper · Sep 29, 2013

beorhthelm said:
the parachute payments intend to keep the Premiership competitive, and avoid relegated clubs being instantly bankrupted. it would be better if they weren't there, but then it would be better if clubs didnt pay 20k+ a week to mediocre squad players. historically it hasnt helped clubs relegated, when i looked it up had to go back half a dozen seasons to find one where 2 of the 3 promoted clubs had been relagated the previous season. the money is generally spent on players who where not good enough for the premiership who have poor form or poor motivation. hence the relegation.

Since the inception of the Premiership 16 out of 60 teams have gone straight back up. More than this have been relegated further down the leagues according to a newspaper article a while back.

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