r00fie1
Well-known member
I found this article whilst researching consequences for relegated clubs to bounce back with the same players - and the same wages.
Its interesting.
A long read:
www.sportingnews.com
The final day of the Premier League 2021/22 season carries the promise of more than mere on-pitch misery for the teams who will suffer relegation.
Norwich City and Watford will be joined by one of Burnley or Leeds United, and the financial consequences of crashing down to the Championship are stark for all three teams at the bottom.
There are several examples of clubs who never really recovered from Premier League relegation in the football league, the most notable of which this season was Oldham Athletic.
The troubled Latics became the first team to have been in the modern Premier League to fall into non-league when they were relegated from the bottom division in England, League Two, in April.
Financially-stricken former Premier League side Derby County provide another cautionary tale, although fans hope the club will be firmly under new ownership by the time they start next season in League One alongside fallen giants including Sheffield Wednesday, Portsmouth, Bolton Wanderers, Ipswich Town and Charlton Athletic.
There are any number of worrying repercussions for teams who suffer relegation, from sustaining sizeable wage bills to falling gate receipts and adapting to the tiny TV revenue Championship teams earn compared to Premier League clubs.
Banks are more likely to be receptive to Premier League clubs in terms of financing, and the shock of relegation has contributed to crises at the likes of Portsmouth and Bolton.
The parachute money is provided as part of solidarity payments worth a total of £100 million ($124.9 million) each season, distributed throughout the football league. The solidarity cash is aimed at remedying competitive imbalances caused by parachute payments.
Teams that only spend one season in the Premier League before being relegated receive the money over just two y
Clubs that return to the Premier League within three years of being relegated do not receive parachute payments.
That proved to be good news for existing Premier League clubs when Norwich and Watford were promoted during the 2020/21 season. The Canaries and Hornets had been due to receive parachute payments the following season because of previous relegations, but their promotions meant around £83m ($103.6m) ended up being distributed between all 20 top-flight clubs.
Based on the recent figures, that is said to be worth around £40m ($50m) in the first year, £35m ($43.7m) in the second and £15m ($18.7m) in the third.
Everton, who are routinely big spenders and have not been relegated since 1951, would probably have been hardest hit by going down and would have needed to sell players and reduce their salary obligations.
Financial requirements are tighter in the Championship, which would not allow the Toffees to continue with a current wage bill representing 89 percent of their revenue. Thankfully for them, a dramatic comeback win over Crystal Palace on May 19 ensured they will be playing Premier League football next season.
Although there are rare exceptions — Luton made the Championship playoffs this season despite having a relatively tiny budget, and playoff finalists Nottingham Forest have not been in the Premier League since 1999 — most of the clubs prospering in the second tier are strengthened by parachute money.
Huddersfield Town, who will face Forest at Wembley, are still receiving parachute payments from their relegation in 2019, and the payments kicked in for Sheffield United, who lost on penalties to Forest in the playoff semifinals, when they finished bottom of the Premier League last season.
A trend of 'yo-yo teams' has emerged, sending clubs with squads and resources superior to most Championship teams bouncing between promotion and Premier League relegation.
Norwich fans have endured perhaps the most dispiriting example of yo-yoing, finding their team hopelessly unable to bridge the gap in class to the Premier League either side of winning the Championship title twice in the past four seasons.
Their success has partly depended upon the goals of Teemu Pukki. The Finland striker has scored 56 times in his previous two Championship campaigns, and it is easy to imagine a parachute-less Norwich attempting to cash in on the forward and ease the burden of his considerable wages before he last fired them to promotion.
Critics of parachute payments have reacted wearily to Fulham and Bournemouth breezing back into the Premier League for 2022/23, when they are likely to be among the relegation favourites.
Serbia striker Aleksandar Mitrovic was earning wages few Championship clubs could contend with when Fulham fell out of the Premier League with a whimper in 2021, and his remarkable return of 43 goals in 44 league games took them back to the big time at a canter.
The Cottagers were also able to make the most expensive transfer in the summer Championship window despite that relegation, signing Liverpool's Harry Wilson for £12m ($15m).
Mitrovic and Wilson are yet to prove themselves at the top and will be desperate to show their Premier League credentials in 2022/23. Fulham will hope that there is no need for parachute payment talk as they bid to avoid changing between the two divisions for a fifth successive season.
Its interesting.
A long read:
What are parachute payments? What relegation payout could mean for Leeds United or Burnley
As Premier League clubs prepare for the final day of the season in the richest division in football, The Sporting News explains how parachute payments work for relegated clubs and how long they last in the Championship and beyond.
www.sportingnews.com
What are parachute payments? What relegation payout could mean for Leeds United or Burnley
The final day of the Premier League 2021/22 season carries the promise of more than mere on-pitch misery for the teams who will suffer relegation.
Norwich City and Watford will be joined by one of Burnley or Leeds United, and the financial consequences of crashing down to the Championship are stark for all three teams at the bottom.
There are several examples of clubs who never really recovered from Premier League relegation in the football league, the most notable of which this season was Oldham Athletic.
The troubled Latics became the first team to have been in the modern Premier League to fall into non-league when they were relegated from the bottom division in England, League Two, in April.
Financially-stricken former Premier League side Derby County provide another cautionary tale, although fans hope the club will be firmly under new ownership by the time they start next season in League One alongside fallen giants including Sheffield Wednesday, Portsmouth, Bolton Wanderers, Ipswich Town and Charlton Athletic.
What are parachute payments?
Parachute payments aim to soften the blow of leaving the footballing financial gold mine that is the Premier League.There are any number of worrying repercussions for teams who suffer relegation, from sustaining sizeable wage bills to falling gate receipts and adapting to the tiny TV revenue Championship teams earn compared to Premier League clubs.
Banks are more likely to be receptive to Premier League clubs in terms of financing, and the shock of relegation has contributed to crises at the likes of Portsmouth and Bolton.
The parachute money is provided as part of solidarity payments worth a total of £100 million ($124.9 million) each season, distributed throughout the football league. The solidarity cash is aimed at remedying competitive imbalances caused by parachute payments.
How long do parachute payments last?
The payments were initially distributed over the course of four years when they were introduced during the 2006/07 season, but a change 10 seasons later reduced the timescale to three years.Teams that only spend one season in the Premier League before being relegated receive the money over just two y
Clubs that return to the Premier League within three years of being relegated do not receive parachute payments.
That proved to be good news for existing Premier League clubs when Norwich and Watford were promoted during the 2020/21 season. The Canaries and Hornets had been due to receive parachute payments the following season because of previous relegations, but their promotions meant around £83m ($103.6m) ended up being distributed between all 20 top-flight clubs.
How much money would Leeds or Burnley get from parachute payments?
Each club receives 55 percent of the amount that each Premier League team would collect under an equal share of broadcast revenue, reduced to 45 percent in the second year and 20 percent the year after that.Based on the recent figures, that is said to be worth around £40m ($50m) in the first year, £35m ($43.7m) in the second and £15m ($18.7m) in the third.
Everton, who are routinely big spenders and have not been relegated since 1951, would probably have been hardest hit by going down and would have needed to sell players and reduce their salary obligations.
Financial requirements are tighter in the Championship, which would not allow the Toffees to continue with a current wage bill representing 89 percent of their revenue. Thankfully for them, a dramatic comeback win over Crystal Palace on May 19 ensured they will be playing Premier League football next season.
What impact have parachute payments had?
The payments have increasingly resulted in relegated clubs making immediate returns to the Premier League, as Fulham and Bournemouth did with something to spare during the 2021/22 season.Although there are rare exceptions — Luton made the Championship playoffs this season despite having a relatively tiny budget, and playoff finalists Nottingham Forest have not been in the Premier League since 1999 — most of the clubs prospering in the second tier are strengthened by parachute money.
Huddersfield Town, who will face Forest at Wembley, are still receiving parachute payments from their relegation in 2019, and the payments kicked in for Sheffield United, who lost on penalties to Forest in the playoff semifinals, when they finished bottom of the Premier League last season.
A trend of 'yo-yo teams' has emerged, sending clubs with squads and resources superior to most Championship teams bouncing between promotion and Premier League relegation.
Norwich fans have endured perhaps the most dispiriting example of yo-yoing, finding their team hopelessly unable to bridge the gap in class to the Premier League either side of winning the Championship title twice in the past four seasons.
Their success has partly depended upon the goals of Teemu Pukki. The Finland striker has scored 56 times in his previous two Championship campaigns, and it is easy to imagine a parachute-less Norwich attempting to cash in on the forward and ease the burden of his considerable wages before he last fired them to promotion.
Critics of parachute payments have reacted wearily to Fulham and Bournemouth breezing back into the Premier League for 2022/23, when they are likely to be among the relegation favourites.
Serbia striker Aleksandar Mitrovic was earning wages few Championship clubs could contend with when Fulham fell out of the Premier League with a whimper in 2021, and his remarkable return of 43 goals in 44 league games took them back to the big time at a canter.
The Cottagers were also able to make the most expensive transfer in the summer Championship window despite that relegation, signing Liverpool's Harry Wilson for £12m ($15m).
Mitrovic and Wilson are yet to prove themselves at the top and will be desperate to show their Premier League credentials in 2022/23. Fulham will hope that there is no need for parachute payment talk as they bid to avoid changing between the two divisions for a fifth successive season.
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