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Why the clubs outside the Premier League are angry, but will soon calm down

By Tony Attwood

The clubs that are not in the Premiership are getting edgy.  Trouble is, they do this every three years and then back down – so their chances of being taken seriously are slight.

Back in April 2010 the Premier League clubs made an offer of a package to clubs not in the top league, and it was very much a take it all, or have nothing, offer.  The big issue was not the Solidarity Payment paid to the League One and Two clubs (for this went up dramatically) but rather a range of other measures that the clubs didn’t like.  But in the end the clubs swallowed their pride and took it all.

Now we are going through the situation again, and again the clubs not in the Premier League are edgy.

Three years ago it was the League One and League Two clubs that were upset about the balance of the deal.  This time the Championship are worried, because of the huge proposed increase in parachute payments paid to relegated clubs.  There is the added feeling that the size of the parachute payments will make the Financial Fair Play rules which the clubs outside the top league have all adopted, unworkable.

The new money comes from a new broadcasting deal, which has gone up as BT has seen off Mickey Mouse TV (aka ESPN).   BT look as if they will be using the toe-hold that they have just won to build a basis on which they can challenge Sky in future years – so they have been bidding big money.

The fact that the Premier League does voluntarily give money to Championship, League 1 and 2 clubs and the Football Foundation, Supporters Direct and Kick It Out, is a good thing by and large (although some of us are a little worried about Kick it Out).  But what is of concern now is the sheer size of the parachute payments which will undoubtedly help relegated clubs climb back into the top league.

The new idea is that relegated clubs will get £23m in the first year, £18m in the second and £9m in each of years three and four.   Grand total for a club that fails to come back up is £59m.  Championship clubs that get solidarity payments rather than parachute payments parachute payments will get around £2.4m a season.   League One clubs will get sides £340,000 and League Two sides £262,000.

So the disparity is obvious.  £23m for a relegated club in its first season, £2.4m for a non-relegated club.

There are also some other uses for Premier League money.  Grassroots football and “good causes” take 4% of the income and various groups are trying to get these increased too.

In one sense the Premier League has a point in their proposals since most clubs in the Championship who have parachute payments mismanage their affairs so badly that they tend not to challenge for promotion in the next four seasons.  Most of the money gets thrown away on salaries which remain the same in the Championship, as they were in the Premier League.  QPR are apparently in the same boat this season, and will be unable to sell many of their “stars” because they are paying them too much.

What’s more only Hull in the current top six in the Championship actually gets any Parachute Money this season.  Last season West Ham came up, and they were using parachute money to do it.  But the other two promoted teams (Reading and Southampton) didn’t.

The only problem is that these arguments have been going on for years and years.  In fact if you read the papers from April 2010 you get much the same sort of argument, and the same stories about current practice being unsustainable.
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It is unlikely that much will happen this time around, and most likely that whatever the Premier League says will go.  But (and this is just a supposition of course) if the Premier League’s own Financial Fair Play rules and/or the European FFP regulations do have an impact, maybe in another three years time things might look different.

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7 comments to Why the clubs outside the Premier League are angry, but will soon calm down

  • Ong Bing

    Good article Tony.

    The other side, parachute money can lift Championship quality, more good players played in there.

    Its looks like Cardiff will get promotion, interesting, 2 Wales team on PL.

    And, Wolves and Blackburn maybe relegated.

    So, parachute money can makes different, but it not all about that money.

    League One is interesting too, only 6 points different between 1 and 7 place. (no, no, Notts County in 11, and Portsmouth in bottom of the table!)

    You can not makes everybody happy.

  • nicky

    Tony,
    As a slightly aside issue but an important one, I have again to take you to task about ESPN. It is NOT Mickey Mouse TV to those loyal Arsenal fans who, for one reason or another, cannot attend live games as often as they would like.
    Remember that many fans gladly suffer ANY quality of commentary in order to see their heroes on their screens.

  • mike Collins

    Tony

    Very good article in todays Gruniad on the financial crisis in Spanish Football.
    I hope you will cast your analytical eye on this evolving situation.

    Mike C

  • Stuart

    But Nicky, it is a joke of a broadcaster. The production is awful too.

  • the mickster

    Why doesn’t all the money from the prem league handout only be allowed to be spent on youth development so we can catch up with the rest of the world.
    So for instance, Plymouth would be given, say £1 mil pa, but only allowed to spend it on their acadamey, not on inflating 1st team players wages and agents fees.
    The money would have to spent on infrastrure, ie pitches, and on coach education. Eventually, those players good enough,would filter up to the prem, however, it would increase the standards across all the leagues, lead to a healthier and more attractive game for all.

  • nicky

    @Stuart,
    Point taken, but separating the wheat from the chaff, the camera work is better than none at all.
    (and don’t tell me there’s no wheat!)

  • Allan

    @The Mickster,
    Very much my line of thinking. Put investment into pitches, indoor facilities, coaching etc. Encourage youngsters to take up the game. The more that come through will produce more of high quality.
    However, ask yourself why the FA let The Premier League get all the money in the first place. It was a competition that the FA set up to improve the England team !
    Oh, almost forgot they wouldn’t be the FA if they had done something to really benefit the game !