End of parachute payments

Sulamani

Sulamani

Active member
Secretive talks underway
No details are given as to what might replace parachute payments. Is this a way to increase competitiveness in the championship? Does it risk widening the divide between the top teams and the rest? Can we have one without the other? BD35AFC2-BE7C-4E7A-A7D0-0CBC5E891379.jpeg
 
Rather than give them extra funds if relegated surely Clubs could have an amount taken off them every season they are in the premier league up to a certain level that they then get back if they go down.
 
Priv said:
Rather than give them extra funds if relegated surely Clubs could have an amount taken off them every season they are in the premier league up to a certain level that they then get back if they go down.
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I’m not sure how that could work? interesting idea though but it still rewards the teams relegated to the detriment of the rest of the clubs in the championship (which I hope is what the review is trying to address). It’s just dressing up “parachute payments” in another guise.

The only way I see how a review would work is to reduce the gap in rewards between the two divisions. Pay the Premier League Clubs less and the championship clubs a bit more.
 
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Isn’t this just going to create a closed shop? Promoted teams are going to have to employ on short term contracts
 
Zoophonic said:
I’m not sure how that could work? interesting idea though but it still rewards the teams relegated to the detriment of the rest of the clubs in the championship (which I hope is what the review is trying to address). It’s just dressing up “parachute payments” in another guise.

The only way I see how a review would work is to reduce the gap in rewards between the two divisions. Pay the Premier League Clubs less and the championship clubs a bit more.
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Hard to see the premier league clubs agreeing to reducing their rewards.
 
GazC_MFC said:
Isn’t this just going to create a closed shop? Promoted teams are going to have to employ on short term contracts
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It will make the championship more competitive but the knock on effect is trying to establish yourself in the prem will become increasingly arduous.
 
I get why. Although it will probably mean clubs simply not investing once promoted and many relegation clauses added to players contracts (they won't like that).

So if anything it makes the champo more competitive yet maybe makes the prem less. I'm not sure how they think about that.

I always smile when Boro fans slate the likes of Fulham and Bournemouth. We are a club that spent 50mil when we came down abd 21 the following season. That's considerably more than most have. We had the payments and sp*nked them. You'd argue they set us back years due to being stuck with players on massive wages.

Although if we had relegation clauses then Rudy wouldn't have been able to get rich quick 😂
 
I think the only way they could scrap those payments and not see clubs become financially ruined because of relegation is have all premier league clubs sign up to a mandatory rule that automatically reduces player wages at relegated clubs down to championship average salaries, along with optional relegation release clauses written in. So players can either stay, on reduced wages, or are transfer listed following a relegation.

Obviously they wouldn't be able to implement that with existing contracts, but it could become a mandatory requirement on all future transfers/contract negotiations involving players joining EFL & Premier League clubs.
 
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GazBoro said:
I think the only way they could scrap those payments and not see clubs become financially ruined because of relegation is have all premier league clubs sign up to a rule that automatically reduces player wages at relegated clubs down to championship average salaries, along with mandatory relegation release clauses written in.

Obviously they wouldn't be able to implement that with existing contracts, but it could become a mandatory requirement on all future transfers/contract negotiations involving players joining EFL & Premier League clubs.
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Yeah was thinking along those lines. I remember Mowbray saying that was West Broms policy anyway (when he was there). If you're doing it in isolation though it's yet another hurdle when it comes to attracting players. If all clubs have to abide by it, not so much.

However you're then getting into the same territory as a salary cap and we know how popular that sensible idea is with many clubs.
 
The relegated clubs have a massive advantage over the rest of the CShip which is why we see so many YpYos - same again this season
 
Ending parachute payments will effectively make the PL a closed shop. Might as well abolish promotion and relegation

No one going up will be able to offer sufficiently competitive contracts to allow them to compete. The fear of bankruptcy if they are relegated will mean that they simply not be able to offer attractive contracts.

It's all well and good saying "include a clause that reduces wages if we're relegated", but if I'm a player, I'm going to go to the 15th placed club in the PL who are guaranteeing the full salary for the full 4 years, not some newly promoted club where I might face wage cuts after a season.

I don't think parachute payments have made the championship noncompetitive. Maybe in the 00s, clubs bounced back routinely at the first attempt. Granted, last season and this does seem to mark a return to yo-yo clubs, but I put that down to the financial impact of covid on everyone else. In the 2010's it was becoming relatively rare for PL clubs to bounce straight back.
 
They could change it so that parachute payments can only be put towards existing player contracts.

They were never created to allow clubs like us to spunk £50m on a dozen players after relegation, they were created to allow clubs to offer competitive contracts without it crippling them if they're relegated.
 
TeaCider said:
They were never created to allow clubs like us to spunk £50m on a dozen players after relegation, they were created to allow clubs to offer competitive contracts without it crippling them if they're relegated.
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To be fair, what was our net spend when we were relegated?
Most of that cash was generated by sales.

De Roon £13 million, Ramirez £9 million, Rhodes £10 million, Fischer, Espinosa and Stuani £10 million between them, plus Christie and Forshaw going for about another £6 million in January. These are figures that were reported at the time. Our net spend could be as little as £2 million or, if some of these fees are a bit generous, around £8-10 million.

So our net spend was pretty much in line with what other championship clubs were doing.

What parachute payments allowed us to do was
1. Negotiate fees from a position of strength. With crippling contracts, we may have had to give some of these players away, just to get them off the wage bill.
2. Still offer competitive contracts. Braithwaite would not have been on peanuts, but I doubt it was as much as Negredo.

The problem with your suggestion is, amongst all of the dealing, can you tell what money came from parachute payments, and what came from player sales?
 
They need to do away with parachute payments, but split the funding a lot better between the Prem, Champo, League 1&2 etc. I'm not saying make them all equal, but would need to be something like 40/30/20/10.

But, and it is a key but, they will need all other leagues to do the same, otherwise the prem won't compete with other leagues as they won't be able to pay the same wages etc.

We could impose a salary cap, or distribute winnings in the prem to lower teams first, but this would mean loads of average teams in the prem, and the champo teams would have nobody to beat, when they go up.
 
Frozen Horse said:
To be fair, what was our net spend when we were relegated?
Most of that cash was generated by sales.

De Roon £13 million, Ramirez £9 million, Rhodes £10 million, Fischer, Espinosa and Stuani £10 million between them, plus Christie and Forshaw going for about another £6 million in January. These are figures that were reported at the time. Our net spend could be as little as £2 million or, if some of these fees are a bit generous, around £8-10 million.

So our net spend was pretty much in line with what other championship clubs were doing.

What parachute payments allowed us to do was
1. Negotiate fees from a position of strength. With crippling contracts, we may have had to give some of these players away, just to get them off the wage bill.
2. Still offer competitive contracts. Braithwaite would not have been on peanuts, but I doubt it was as much as Negredo.

The problem with your suggestion is, amongst all of the dealing, can you tell what money came from parachute payments, and what came from player sales?
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Many of those players were sold for very similar prices to what we paid for them for in the first place, which has to be taken in to account.
We paid £12m for De Roon, £9m for Rhodes, so that's only £2m of profit there.

We didn't sell Ramirez for £9m either, it was around £5m, which is still a profit but I'm sure there'd have been some sort of financial bung to Peranol to cancel that pre-contract

Those two benefits of parachute payments would still be there in a situation where they were only allowed to be put towards covering pre-existing contracts.

There's a financial paper trail for everything, some clubs would try obfuscate it, but I'm sure it could be done.
 
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