The frightening increase in losses in lower league football continues

Atleast in the Premier League wage reductions are pretty standard for failure to hit certain targets including drops for getting relegated. For example Man Utd players are currently getting 25% less than their agreed salary for failure to make Europe (Would have been a little lower if we had made Europa League or Conference League but still would be less). If as looks likely now they make it to the Champions League next season then it will jump back up. If Spurs go down their players are all on 50% reductions because even with parachute payments owners don't want to be paying the full wages

 

If that is universally applied in the PL, msybe it's the appropriate time to reopen the debate on parachute payments again?

 

It's not Premier League mandated but I believe every club has some form of it in place. I suspect that the likes of Burnley won't have a 50% drop like Spurs have (I believe West Ham are also on a 50% drop) as their players wages are more likely to closer to what a top Championship player would get, in fact Burnley's might even be a two tier system as they will have players who were with them last season and would have got a promotion boost (As these work both Forest and Palace players for example got a boost for getting Europe) but they are most likely on less than an equivalent player they signed this season who would have signed on PL wages but with a bigger wage drop.

Even if it was though as I've said before we will never get rid of parachute payments without being able to pass some kind of reform of Premier League voting. There are enough clubs who fall in the 'yo-yo' grouping to scupper any vote over Parachute payments, in fact as we keep seeing they hold votes hostage to get them to be increased (for example it got increased when the PL wanted to increase the number of subs. The only way parachute payments could be realistically revisited if something legally binding to outlaw or reduce them was put through outside of the Premier League itself by the Football Regulators and I'm not sure that is something they could push through and you can guarantee the yoyo clubs both currently in the PL and in the Championship would tie that up in the courts.

It is a shame because I've stated before I think Parachute payments are one of the biggest issues in English football. I would love to see them removed. Like Project Big Picture proposed getting rid of them and putting it into a pot along with an increased solidity payment that was distributed more fairly across all of English football would help massively rather than rewarding yoyo clubs and forcing other clubs to have to overspend to try and break into that group

 

Yeah the 'smaller clubs' who were more fearful of relegation would often do it on a more ad-hoc basis so one player may negotiate a 10% relegation reduction, another 5% and another 20% but its become more formalised as we have got more formalised post the influx of supposedly wealthy owners post Abramovich and the trouble the majority of those caused when they either didn't have the resources to bank roll losses or they underestimated how much losses were and turned off the tap as that has brought about more financial controls that clubs are worried about breaking especially if they miss Europe or get relegated. Now it's most clubs and its much more formalised although as I mentioned there can be some outliers, for example if Burnley also have a 50% reduction as standard but their promotion uplift was only 25% then a player who got promoted with them last season will lose just that 25% and not the 50% someone who signed this season gets. Ofc the promotion increase might be the same as the relegation reduction

 

Deloittes reported on this a couple of years ago. At the time, their knowledge suggested that in the PL, it was far from universal and even within individual clubs, the practice wasn't applied consistently. To paraphrase them, if clubs want the best, the best would negotiate their own terms in the global football market and they would rarely include provisions to reduce wages. Who really knows whether things have changed much since then.

 

Spurs will still get the Parachute payments even with the wage reduction. It's why we actually see fewer fire sales on relegation than we used to do as with a 50% reduction and parachute payments they have a couple of seasons where keeping the squad intact is more affordable than it used to be (It depends how many are getting payments but they are currently worth between £40-49mill in year 1, £35-40mill in year 2 and £15-18mill in year 3. So by year 3 you certainly need to make cuts but Year 1 you are fairly fine). West Ham for example previously had to break up some good teams for reduced amounts that would have walked right back up but if they go down this season they will only be selling the likes of Bowen because the player wants to go and it won't be lowballed into selling.

 

The Average in the premier league is actually lower than that. It's in the £60-80k range and thats Skewed massively by City who pay much more than any other PL club (City Spend around £4.3mill a week, Arenal £3.6mill, Liverpool £3.3mill and United £3.1mill) . Spurs who only spend like 45% of their revenue on wages are said to be around £100k which would take the average down to around £50k. And their biggest earners like Romeo, VdV, Xavi, Gallagher are all likely to push top leave and will have plenty of suitors that will push it even lower. And with parachute payments Spurs won't be held to ransom so will get a decent amount for these players. Burnley's Average is said to only be £28k a week

 

I agree with Maguire. The clubs who finish in the relegation zone earned around £100mill just from the Sky/EE domestic broadcasting contracts. That's a huge gap to fill when dropping to the Championship where TV broadcasting is about a tenth of PL levels. Although clubs will clearly want to reduce their wages costs - including selling their in-demand players - parachute payments were originally intended to ease that transition from the PL to the Championship over the following 2 or 3 years. But as we know, thay do distort competition between those in receipt of the payments and the other Championship clubs in a very competitive league.

Whether parachute payments would ever disappear is highly unlikely. The new IFR has already said he'd want to look at the distribution of broadcasting revenues within the football pyramid. I'd expect that to include challenging the size of the parachute payments rather than questioning the principle of them. Some of the PL clubs have already warned him to steer clear of that!

 

And despite this, some still believe one of two things would happen if we were to be promoted to the Championship this season.

Firstly, we would somehow do better than just about every other club in the EFL by cutting our cloth accordingly and not running up huge losses every season whilst remaining competitive with other clubs.

Or secondly, that Rupp would dig deep into his pockets and put millions of his own money into the club to finance the club's losses every year as a favour to the fans.

Yeah right!