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Parachute Payments

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The Cambridge United CEO spells it out on page 7 of tonight's programme which is free to download from the Cambridge United website.

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7 hours ago, essex canary said:

The Cambridge United CEO spells it out on page 7 of tonight's programme which is free to download from the Cambridge United website.

Did you suggest they should be BOGOF to?

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It’s a shame that the Cambridge United CEO couldn’t even get the actual amount of the parachute payment correct (overstating the figure in his note by a mere £13m) or acknowledged that League One and Two clubs actually receive more in solidarity payments from the Premier League than they receive from their own EFL TV deal.

Yes, there’s absolutely no doubt that there’s a debate to be had over increasing the total amount of solidarity payments, but just gabbing on about the income differences while completely ignoring the expenditure outgoings (mainly wages) for relegated clubs, just underlines why, in my opinion, the EFL has completely misjudged its pitch to the Fan Led review panel and will undoubtedly be upset when the findings are announced.

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Everyone is against parachute payments right up to the point they are promoted to the Premier League, and then they suddenly realise why they make sense. You might as well halt promotion from the Championship without them.


The alternative would be to do what we did last time and spend almost nothing - in relative terms to the rest of the league - on players, expecting to go down again, and probably lose a large number of your best players, or get hugely in debt.

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11 hours ago, GMF said:

It’s a shame that the Cambridge United CEO couldn’t even get the actual amount of the parachute payment correct (overstating the figure in his note by a mere £13m) or acknowledged that League One and Two clubs actually receive more in solidarity payments from the Premier League than they receive from their own EFL TV deal.

Yes, there’s absolutely no doubt that there’s a debate to be had over increasing the total amount of solidarity payments, but just gabbing on about the income differences while completely ignoring the expenditure outgoings (mainly wages) for relegated clubs, just underlines why, in my opinion, the EFL has completely misjudged its pitch to the Fan Led review panel and will undoubtedly be upset when the findings are announced.

Do you know the detail behind the figures? The minimum TV receipt per Club  in the Premier League appears to be about £100 million whilst I understand that in the first relegation season the Clubs get 55 per cent of the flat rate receipt. Perhaps your £13 million difference is accounted for by the fact that this season Norwich City are guaranteed some receipts in excess of the flat rate which don't then form part of any subsequent parachute receipt?

As another reference point it is interesting to note that Xavi Quintilla's current Club Leganes - relegated from La Liga last season have a quoted budget of 57 million euros in La Liga and only 17 million euros in Segunda but they can still engage him. It isn't going well for either of them. Clearly the standard isn't as high in Spain but nonetheless pretty decent with more opportunity for home grown players. Obviously nothing substantial in terms of parachutes though relegated clubs probably need more support.

Perhaps the only real alternative to Parachute Payments would be to facilitate relegated Clubs conceding some player registrations to the Premier League with the latter retaining their own fund to manage it and pay player wages before they get another registration with another Club. Problem with that is it almost becomes like a franchise arrangement with teams having wholesale changes upon swapping divisions and journeymen playing for relegated club after relegated club. Mind you it has moved pretty much in that direction anyway and it would provide an answer to the constant issues of lack of even playing field in the second tier.

 

 

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I've said before, parachute payments are a symptom of the problem rather than the problem themselves.

The financial gap between the Premier League and EFL is huge at this point. Clubs are going to spend that money on wages and fees in order to try and get more of it by staying up. Players are going to try and get the best deals they can. Removing parachute payments would just further increase clubs reliance on billionaire owners to keep them afloat. I totally see why owners of clubs further down the food chain hate them but they are an imperfect solution to a very real issue.

Until football as a whole calms down the financial arms race and does the sensible thing of actually implementing a salary cap, this will continue.

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Huddersfield, Wigan, Sunderland, Bolton, Blackpool, Blackburn, Boro, Swansea, Reading all highlight what a massive unfair advantage parachute payments bestow. A guarantee that you will always be competing at the very top and you will have no financial woes either.  The real question is, pre PL, were there more clubs reaching the old Ist Division or was it pretty much as it is now ?

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46 minutes ago, DraytonBoy said:

Would City have been able to spend so much over the summer without PP's? 

Obviously not. But the same will apply to you when you get relegated. Only you probably won't be able to spend anything because it will cost all of the PPs to pay the players that got you relegated.

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Parachute payments should be banned as they reward failure. I've never liked them. 

 

Edited by komakino

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It's not rewarding failure at all. Getting into that top flight is quite the achievement.

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5 minutes ago, TheGunnShow said:

It's not rewarding failure at all. Getting into that top flight is quite the achievement.

I don't see how you should be 'rewarded' with millions if you've failed. 

Getting promoted is a completely separate issue in a separate league. It would good if The Championship was close to the EPL, both in standard of football and financial, but parachute payments are all wrong and I wouldn't be surprised if they do get revoked with something else maybe in their place. 

You don't 'win' by losing!

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22 minutes ago, komakino said:

I don't see how you should be 'rewarded' with millions if you've failed. 

Getting promoted is a completely separate issue in a separate league. It would good if The Championship was close to the EPL, both in standard of football and financial, but parachute payments are all wrong and I wouldn't be surprised if they do get revoked with something else maybe in their place. 

You don't 'win' by losing!

You win by getting there in the first place. Rather than seeing it as rewarding failure, it's rewarding getting there.

As someone else said though, they're actually a band-aid to a far bigger problem, and increasingly a salary cap probably is the only way to remedy it.

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13 minutes ago, komakino said:

I don't see how you should be 'rewarded' with millions if you've failed. 

Getting promoted is a completely separate issue in a separate league. It would good if The Championship was close to the EPL, both in standard of football and financial, but parachute payments are all wrong and I wouldn't be surprised if they do get revoked with something else maybe in their place. 

You don't 'win' by losing!

That is an incredibly stupid comment, as by that token no player who is not part of the winning team should be paid, nor receive any runners up medal in any competition. In fact 21 clubs in the Championship should not pay their players if they fail to gain promotion. As with all the other leagues. And why are players being paid during the summer, or when injured ? What about pensions ? Failure to keep fit should not be an excuse for someone like Ted MacDougall to continue to be paid money.

 

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13 minutes ago, interwebme said:

Relegate half the Premier League, make it something every club has to prepare for. 

 

And around two thirds would not sign player contracts they could not afford outside the PL.  Leading to virtual stagnation whereby only the Champions League level of clubs would bother. I suspect, however, you are a troll posting up stupidity to get the perverse enjoyment of a reaction.

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1 minute ago, RobJames said:

 

And around two thirds would not sign player contracts they could not afford outside the PL.  Leading to virtual stagnation whereby only the Champions League level of clubs would bother. I suspect, however, you are a troll posting up stupidity to get the perverse enjoyment of a reaction.

Which is why you really need a salary cap.

The issue in football is largely clubs, especially those at the top, have lost sight of having any duty of care to football as competition and only care about their clubs as a business, which creates this two tier top flight where 14 clubs have 0.1 chance at best of wining the title. 

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17 minutes ago, RobJames said:

That is an incredibly stupid comment, as by that token no player who is not part of the winning team should be paid, nor receive any runners up medal in any competition. In fact 21 clubs in the Championship should not pay their players if they fail to gain promotion. As with all the other leagues. And why are players being paid during the summer, or when injured ? What about pensions ? Failure to keep fit should not be an excuse for someone like Ted MacDougall to continue to be paid money.

 

 

Not really. It would make teams that do get promoted make more of an effort and not be there just to take the money, as we did two years ago. Risk and Reward. 

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Parachute payments will continue for as long as promotion and relegation still happen.

However just like the big clubs outgrew the old first division the same will happen with the PL.

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1 minute ago, nutty nigel said:

Parachute payments will continue for as long as promotion and relegation still happen.

However just like the big clubs outgrew the old first division the same will happen with the PL.

Hmmm... Don't be surprised if that is tweaked or certain criteria is needed to be met sometime in the not too distant future. Fortunately Delia is in with the F.A, but that may not be enough. 

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6 hours ago, essex canary said:

Do you know the detail behind the figures? The minimum TV receipt per Club  in the Premier League appears to be about £100 million whilst I understand that in the first relegation season the Clubs get 55 per cent of the flat rate receipt. Perhaps your £13 million difference is accounted for by the fact that this season Norwich City are guaranteed some receipts in excess of the flat rate which don't then form part of any subsequent parachute receipt?

 

No, this is not correct.

PL cash is made up of five elements: Domestic, Overseas, Commercial, Facility & Merit.

The first three are fixed and split equally among all clubs while Facility & Merit are apportioned according to frequency of broadcast & position in the final table.

Parachute payments are a fixed percentage of just the Domestic & Overseas elements, and are currently c. £41.5m for the first season.

[As some overseas broadcast deals have gone T*ts Up recently even that £41m figure may be on the high side.  We will see when the next accounts drop.]

Mr Mather conveniently ignores that the EFL operates an identical system of 'soft-landing' payments, for clubs dropping from D2 to D3, from D3 to D4, and even from D4 to the Conference.

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Just now, komakino said:

Hmmm... Don't be surprised if that is tweaked or certain criteria is needed to be met sometime in the not too distant future. Fortunately Delia is in with the F.A, but that may not be enough. 

It will only be 'tweaked' if the EFL relax FFP. 

 

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Re EPL FFP - Newcastle are rumoured to be ready to spend £200m in Jan. Imagine the wages associated with those transfer fees. Losses could be eye watering (on paper) but Man City got away with it for years. I seem to recall a ludicrous amount of the Money  from Sheikh Mansour being recorded as front of shirt sponsorship in their accounts. 

FFP will be tested but I wouldn’t hold your breath . 
 
UEFA and EPL don’t really know what to do with the FFP rules since the impact on losses by clubs due to Covid .  A decent Russian /Abu Dhabi/  Saudi funded lawyer will run rings around it . 
 

Edited by Graham Paddons Beard

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3 hours ago, NewNestCarrow said:

No, this is not correct.

PL cash is made up of five elements: Domestic, Overseas, Commercial, Facility & Merit.

The first three are fixed and split equally among all clubs while Facility & Merit are apportioned according to frequency of broadcast & position in the final table.

Parachute payments are a fixed percentage of just the Domestic & Overseas elements, and are currently c. £41.5m for the first season.

[As some overseas broadcast deals have gone T*ts Up recently even that £41m figure may be on the high side.  We will see when the next accounts drop.]

Mr Mather conveniently ignores that the EFL operates an identical system of 'soft-landing' payments, for clubs dropping from D2 to D3, from D3 to D4, and even from D4 to the Conference.

Thanks. That is a good explanation.

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1 hour ago, Graham Paddons Beard said:

Re EPL FFP - Newcastle are rumoured to be ready to spend £200m in Jan. Imagine the wages associated with those transfer fees. Losses could be eye watering (on paper) but Man City got away with it for years. I seem to recall a ludicrous amount of the Money  from Sheikh Mansour being recorded as front of shirt sponsorship in their accounts. 

FFP will be tested but I wouldn’t hold your breath . 
 
UEFA and EPL don’t really know what to do with the FFP rules since the impact on losses by clubs due to Covid .  A decent Russian /Abu Dhabi/  Saudi funded lawyer will run rings around it . 
 

FFP is a joke at this point but even if properly enforced all it does is lock the existing hierarchy in place.

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4 hours ago, TheGunnShow said:

It's not rewarding failure at all. Getting into that top flight is quite the achievement.

I take the point but there are some players who never seem to play anywhere other than in the top division and move clubs each season following relegation. Can they be deemed to be successful? Many of them probably earn far more than the players who have achieved the promotions and in the overall scheme of things they are not very good. 

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3 minutes ago, essex canary said:

I take the point but there are some players who never seem to play anywhere other than in the top division and move clubs each season following relegation. Can they be deemed to be successful? Many of them probably earn far more than the players who have achieved the promotions and in the overall scheme of things they are not very good. 

I would say the numbers playing in the championship and above at any one time doesnt even make up 1% of the male population, so I would saying getting to that level is a very successful footballer / career. They cant all be Salah / Messi / Ronaldo 

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2 minutes ago, Greavsy said:

I would say the numbers playing in the championship and above at any one time doesnt even make up 1% of the male population, so I would saying getting to that level is a very successful footballer / career. They cant all be Salah / Messi / Ronaldo 

The very top performers in all popular sports get exceedingly well paid and fully deserve it because they are truly exceptional. I would have thought that the TV contracts in football lead to some very modest performers getting extremely well paid relative to their true abilities? It is also that some of them don't play very often even when fit and because some of them get very good contracts early on in their career, they perhaps don't develop but the contract structure of the game rewards them above their ability level. Then again there are many honest and committed performers such as Grant Holt etc who deserve to be well rewarded.

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