Parachute Payments: Unfair on the masses or Vital for the Relegated?


Recently it has been announced that the parachute payments given to the relegated sides will be increased from £48m to £60m, spaced over 4 years (should they immediately be promoted the amount is reduced). Most teams in the lower divisions, if not all of them have complained vociferously about the matter, as the rest are handicapped due to the three sides coming down getting tens of millions to help them.

Those going down will probably argue that it does not give an unfair advantage – look at the likes of Blackpool, Blackburn and Wolves (Relegated twice on the spin), not forgetting Middlesbrough and Portsmouth (Slight different issues there) have all stayed down or worse. On the other side, the likes of Newcastle, Sunderland, Hull and Reading have come back first time, if not 2nd of asking, and gives them a bit of leeway in keeping highly paid players, Newcastle kept most of their squad bar the wantaway stars like Duff, Martins, Owen and Bassong.

We had a look at the past 6 seasons, and found only 4 teams have gone straight back up at the first attempt – Newcastle, West Ham, Birmingham and West Brom. In that 6 year period, just Reading add to the list for going back up at all. On the other side just four have gone straight back down first time – West Brom, Burnley, Blackpool and Reading – so it is not like it is an easy task – would an extra £12m make a difference?

The other matter arising is the Championships own financial fair play rules to keep teams in-check – and when a team comes down after spending millions on often poor foreign players it gives them a get out clause, because they are immediately given a huge amount of money. Other Championship teams get £2.3m as a solidarity payment, a nice gesture but still very little.

Due to these payments the other 21 sides in the league discussed not giving the three sides coming down a cut of their TV revenue, and also introducing a salary cap so the likes of QPR cannot come down and keep players like Joey Barton on £70/80k a week.

Again, on the other side of the argument look at the three teams coming down – QPR and Reading are in the top 6 and Wigan are 10th, who are in the midst of a Europa League campaign, but should they win their game in hand could go 5th. So none are romping away with the league, in fact it is Burnley, Leicester and then QPR making a charge.

So the question is should it have been increased? In our opinion – no. Teams should have to abide by FFP rules now, so being relegated will mean just offloading the highest few earners and use any money left on bringing in some appropriate players and promoting youth team members.

Other leagues do not hand out cash like the Premier League do, and they manage just fine. Palermo, Siena and Pescara – the three relegated from Serie A are doing well, as are Deportivo, Mallorca and Zaragoza (well those three are all mid-table), similar stories in Germany and Holland. The Championship is seen as one of most competitive leagues in Football – if we start giving relegated teams more and more it may lose this appeal.

Financial Fair Play Rules should help keep it as level as possible, but if teams are earning more from being relegated, it bypasses the problem. A Salary cap is also a very good idea, and we feel it could come into play in many leagues across Europe soon.

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