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Parachute payments to be reduced

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Parachute payments to be reduced as part of new financial arrangements in the Championship (behind paywall below).

Main points:

  1. Broad support for a "new deal for football"
  2. Funding will be allocated to clubs based on where they finish in the League
  3. New system of cost control to prevent lavish spending.
  4. Parachute payments to be greatly reduced.
  5. Infrastructure grants for stadia and training grounds
  6. There is agreement on principles but the details remain to be finalised.
  7. Some premier league clubs want Championship clubs to commit to playing a fixed amount of under 23s (including loanees).

Obviously the devil will be in the detail but key things to look out for will be:

  • How much extra money the championship gets (dare I call it levelling up?)
  • What the limitations will be on spending - particularly will it be the same as the UEFA 70% on wages and amortisation?
  • How much will parachute payments be reduced?

Impact on City - its hard to be certain without the detail but spending caps would favour us in the Championship as we have one of the biggest non TV revenues in the Championship. However, it will presumably make it even harder for newly promoted clubs to attract new players on longer term contracts as it will require bigger relegation reductions and most promoted team get relegated already. Perhaps promoted clubs will become even more dependent on loans and possibly more short-term deals like the Lingard one on out-of-contract mercenaries + more deals with automatic release clauses?

Will be interesting to see what emerges over the next few weeks/ months.

https://www.thetimes.co.uk/article/merit-based-funding-and-cutting-parachute-payments-championship-set-for-new-deal-zztqbkdgt

 

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14 minutes ago, Badger said:

Parachute payments to be reduced as part of new financial arrangements in the Championship (behind paywall below).

Main points:

  1. Broad support for a "new deal for football"
  2. Funding will be allocated to clubs based on where they finish in the League
  3. New system of cost control to prevent lavish spending.
  4. Parachute payments to be greatly reduced.
  5. Infrastructure grants for stadia and training grounds
  6. There is agreement on principles but the details remain to be finalised.
  7. Some premier league clubs want Championship clubs to commit to playing a fixed amount of under 23s (including loanees).

Obviously the devil will be in the detail but key things to look out for will be:

  • How much extra money the championship gets (dare I call it levelling up?)
  • What the limitations will be on spending - particularly will it be the same as the UEFA 70% on wages and amortisation?
  • How much will parachute payments be reduced?

Impact on City - its hard to be certain without the detail but spending caps would favour us in the Championship as we have one of the biggest non TV revenues in the Championship. However, it will presumably make it even harder for newly promoted clubs to attract new players on longer term contracts as it will require bigger relegation reductions and most promoted team get relegated already. Perhaps promoted clubs will become even more dependent on loans and possibly more short-term deals like the Lingard one on out-of-contract mercenaries + more deals with automatic release clauses?

Will be interesting to see what emerges over the next few weeks/ months.

https://www.thetimes.co.uk/article/merit-based-funding-and-cutting-parachute-payments-championship-set-for-new-deal-zztqbkdgt

 

Ties in with kiwiscot's prev post  https://www.theguardian.com/football/2022/jul/26/premier-league-wants-championship-to-house-loan-players-in-new-finance-deal

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5.    Infrastructure grants for stadia and training grounds.

We could well take advantage of that though re: the new old stand.

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Posted (edited)

Quite simply, all they need to do is ban loaning players from the PL clubs to lower leagues.  That would stop them stock piling loads of young players and farming them out. We do not benefit from them on the whole, despite Skipp who was a success but who left a gaping hole because he had to go back to his parent club.

Edited by lake district canary
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The premier league is a bit like US sport but without the college draft system to even things out.

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This all just seems like a way of keeping the poor poor and making the rich richer. It’s well documented a vast number of PL club owners want away with relegation and as far as I can tell this all seems one step towards that goal. The system is already merit based as you only get parachute payments if you’ve played at a high level in the previous 3 years. They only reason they are required is to stop teams going out of business due to the financial gap between the leagues. If terrestrial television would pay for the rights to show the championship every week rather than wasting tax payers money on champions league highlights then we might get on a more even footing. 
 

Why should a football league club commit to playing any players. If you’re good enough you should be playing not just if you’re under 23 or not. If they are so keen on that rule why don’t they implement it in the league they run? 

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1 hour ago, BurwellCanary said:

Obviously we are totally dependant upon the newspaper reports but the times seemed to indicate that there was agreement in principle on the other matters but that "some" clubs wanted the "under 23s" quota (the Guardian uses the "some" as well) I take this to mean that there is no agreement on the issue.

From what I have observed, clubs pretty keen on getting PL loans if they can get them anyway, so I don't think that it is as significant as the other issues in the deal.

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12 minutes ago, By Hook or Ian crook said:

This all just seems like a way of keeping the poor poor and making the rich richer. It’s well documented a vast number of PL club owners want away with relegation and as far as I can tell this all seems one step towards that goal. The system is already merit based as you only get parachute payments if you’ve played at a high level in the previous 3 years. They only reason they are required is to stop teams going out of business due to the financial gap between the leagues. If terrestrial television would pay for the rights to show the championship every week rather than wasting tax payers money on champions league highlights then we might get on a more even footing. 
 

Why should a football league club commit to playing any players. If you’re good enough you should be playing not just if you’re under 23 or not. If they are so keen on that rule why don’t they implement it in the league they run? 

I think that the main driving force for owners is to ensure that they make a profit on their investment - hence the 70% rule passed by UEFA.

The Under 23 proposal according to the Times anyway, is wanted by "some" clubs and I took that to mean not (yet, anyway) part of the deal. I think that it is a commitment to Under 23s that the "some clubs" are asking for, not actually loans, which is what the Guardian articles says despite the headline.

From what I have seen Championship clubs are pretty keen to get their hands on PL Under 23s if they can - I'd be surprised if we weren't in for one or two by the end of the window. If there is stricter control on wages/ amortisation (similar to the 70% UEFA system which I presume will come into the PL as well) a few loanees might help balance the books as well.

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It's common practice I guess in football throughout the ages with weaker teams getting a younger player on loan they might not get otherwise . I mean we send some of ours to England, Holland and Scotland of late and look to get a top teams up and comings. So yes Championship teams are keen to get some deals.

I think it does becomes a problem when it's part of every teams business model i.e. systemic. With the suggestion here being it's compulsary i.e. you must play x3 billy gilmours to get to the quota regardless of your teams position/situation. Infact if there was a quota whats to stop Premier league clubs increasing the number of British youths on their books if there is a guaranteed mechanism to farm them out

Of course it's all about money

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53 minutes ago, Badger said:

I think that the main driving force for owners is to ensure that they make a profit on their investment - hence the 70% rule passed by UEFA.

The Under 23 proposal according to the Times anyway, is wanted by "some" clubs and I took that to mean not (yet, anyway) part of the deal. I think that it is a commitment to Under 23s that the "some clubs" are asking for, not actually loans, which is what the Guardian articles says despite the headline.

From what I have seen Championship clubs are pretty keen to get their hands on PL Under 23s if they can - I'd be surprised if we weren't in for one or two by the end of the window. If there is stricter control on wages/ amortisation (similar to the 70% UEFA system which I presume will come into the PL as well) a few loanees might help balance the books as well.

I am all for using the loan market to enhance squads but not for having a rule where teams have to play a certain about of players based on age. After all it’s supposed to be competitive mens football, when you’re having to play someone because of their age and not because of their ability is when I’d lose a lot of interest as it weakens the legitimacy of the competition 

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1 hour ago, lake district canary said:

Quite simply, all they need to do is ban loaning players from the PL clubs to lower leagues.  That would stop them stock piling loads of young players and farming them out. We do not benefit from them on the whole, despite Skipp who was a success but who left a gaping whole because he had to go back to his parent club.

I had a similar ish idea Lakey. I do think a loan is real value for a young players development but by the time they are 21/22 they should either be in the premier league squad or in my view able to leave for nothing.

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2 hours ago, BroadstairsR said:

5.    Infrastructure grants for stadia and training grounds.

We could well take advantage of that though re: the new old stand.

Is this why the subject has just cropped up? Are we looking to be first in the queue? 

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Not sure why we should get a grant to make our stadium even bigger when the likes of Luton play in a tiny dump. I'm not sure where all this extra wealth to the EFL is going to come from either.

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It seems to be another move towards the premier league / championship gap being unbridgeable.  I hate the idea of the set number of u23’s, probably good for the England team and the development of players.  A disaster for club building a squad to have a genuine go at getting into the EPL.  I also wonder how attractive championship and league 1 / 2 football will be if clubs can’t aspire to play at the very highest level.

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Posted (edited)
4 hours ago, By Hook or Ian crook said:

This all just seems like a way of keeping the poor poor and making the rich richer. It’s well documented a vast number of PL club owners want away with relegation and as far as I can tell this all seems one step towards that goal. The system is already merit based as you only get parachute payments if you’ve played at a high level in the previous 3 years. They only reason they are required is to stop teams going out of business due to the financial gap between the leagues. If terrestrial television would pay for the rights to show the championship every week rather than wasting tax payers money on champions league highlights then we might get on a more even footing. 
 

Why should a football league club commit to playing any players. If you’re good enough you should be playing not just if you’re under 23 or not. If they are so keen on that rule why don’t they implement it in the league they run? 

They also already wanted to have U23 teams in the lower divisions.

From what I can see of all this, and the behaviour of the EPL and the clubs involved in the European Super League attempt is actually just pushing fans further and further away. Of course, it's local/home based fans and they care little about that in the premier league as it's the TV rights that matter and as long as there are armchair fans around the world, they'll still get their cold hard cash.

If it keeps going like this I can see there becoming a point where the traditional concept of football fans is just cut out altogether.

Why on earth is the premier league allowed to dictate anything like this? Last time it was control of the EFL's TV rights! This time it's control of who can play in their teams! How does that work if a team gets promoted and those U23's sod off back to their parent club to play or have to get loaned to the championship or lower again? Just no.

Limit size of premier league U23 squads and tell them to stick it. 

I will never understand why this isn't dealt with by cowardly FIFA. Needs to be a European wage cap put in place IMHO. 

Edited by chicken
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15 hours ago, lake district canary said:

Quite simply, all they need to do is ban loaning players from the PL clubs to lower leagues.  That would stop them stock piling loads of young players and farming them out. We do not benefit from them on the whole, despite Skipp who was a success but who left a gaping whole because he had to go back to his parent club.

That would just send them to Belgium and Holland. We loan players out all the time, it’s good for their development. 

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13 hours ago, By Hook or Ian crook said:

I am all for using the loan market to enhance squads but not for having a rule where teams have to play a certain about of players based on age. After all it’s supposed to be competitive mens football, when you’re having to play someone because of their age and not because of their ability is when I’d lose a lot of interest as it weakens the legitimacy of the competition 

I take your point, but as I have said, I'm not sure that it is one of the proposals at the moment - it is just something that some clubs would like.

The other areas where they have already agreed in principle are more interesting to me, and much more likely to come to fruition.

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38 minutes ago, hertfordyellow said:

That would just send them to Belgium and Holland. We loan players out all the time, it’s good for their development. 

I don't think you realise the number of players involved. I don't think Belgium and Holland could accommodate them all! 

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Despite all the focus upon it, there is no proposal on loans in either of the articles. What the articles say is that some clubs would like to have a quota of Under 23s to help the English game's development, in the same way as there were limits on non UK players.

As far as I am aware this desire by some clubs is not even (as yet, anyway) a proposal.

IMO, the more significant issue for the future of the game in the articles are the reduction of parachute payments, restrictions on club spending, TV payment according to final position (merit payments) and infrastructure grants.

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1 minute ago, Badger said:

Despite all the focus upon it, there is no proposal on loans in either of the articles. What the articles say is that some clubs would like to have a quota of Under 23s to help the English game's development, in the same way as there were limits on non UK players.

As far as I am aware this desire by some clubs is not even (as yet, anyway) a proposal.

IMO, the more significant issue for the future of the game in the articles are the reduction of parachute payments, restrictions on club spending, TV payment according to final position (merit payments) and infrastructure grants.

The largest issue there really is that without parachute payments relegated teans will be forced to sell players to ensure they dont go bust unless they have wealthy backers, surely? 

Yet again, not helping football and increasing the difficulty of staying up once there.

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48 minutes ago, chicken said:

The largest issue there really is that without parachute payments relegated teans will be forced to sell players to ensure they dont go bust unless they have wealthy backers, surely? 

Yet again, not helping football and increasing the difficulty of staying up once there.

If the likely expenditure restrictions are passed the wealth of owners won't make much difference.

I think that it will make it (even) harder for promoted teams as they will not be able to use parachute payments to the same extent to soften the wage drops on newly-recruited players - therefore, it will be evn harder for newly promoted clubs to recruit regardless of the owner's wealth.

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1 hour ago, Yellow Wal said:

I don't think you realise the number of players involved. I don't think Belgium and Holland could accommodate them all! 

You are being obtuse, plenty of the bigger teams have partnerships with European clubs. They would simply extend these partnerships rather than stop what is a lucrative almost guaranteed method of negotiating FFP.

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2 hours ago, hertfordyellow said:

You are being obtuse, plenty of the bigger teams have partnerships with European clubs. They would simply extend these partnerships rather than stop what is a lucrative almost guaranteed method of negotiating FFP.

Yes, I am fully aware that plenty of the bigger clubs have partnerships with European clubs but surely we are talking about a massive extra number of players adding to those figures, and as I said, I don't think you realise how big those numbers would be.

I cannot believe either Belgium or Holland would be anxious to increase those numbers massively and complately lose the identity of their leagues. If so, perhaps I am being obtuse!

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Just now, Highland Canary said:

Would seem to imply the need for ownership investment becomes increasingly important.

It would imply exactly the opposite!

It is likely that the new rules will be a limit on expenditure relative to turnover (70%) - the new UEFA rules are that only 70% of turnover may be spent on wage and amortisation. This means that owners should be able to rely on a good profit each year, which is obviously what the big owners want. 

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10 minutes ago, Yellow Wal said:

Yes, I am fully aware that plenty of the bigger clubs have partnerships with European clubs but surely we are talking about a massive extra number of players adding to those figures, and as I said, I don't think you realise how big those numbers would be.

I cannot believe either Belgium or Holland would be anxious to increase those numbers massively and complately lose the identity of their leagues. If so, perhaps I am being obtuse!

The new UEFA rules have placed limits (of kinds) on the number of loans in and out.

"Fifa has introduced new regulations to limit the number of loan moves clubs are able to sanction in order to “prevent the hoarding of players”.

From 1 July, clubs will only be able to have eight players loaned out and eight loaned in during a season. That number will go down to seven from July 2023 and will reduce again to six from July 2024.

The cap does not apply to players aged 21 and under, or players who are “club trained” – so those who have been with either their current club or another in the same national association for at least three years between the ages of 15-21. These are usually referred to in the Premier League as “homegrown” players."

The exemptions for under 21s and homegrowns is significant but it will make things more difficult for clubs like Chelsea.

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Just another step on the road towards the inevitable pulling up of the drawbridge.

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34 minutes ago, Yellow Wal said:

Yes, I am fully aware that plenty of the bigger clubs have partnerships with European clubs but surely we are talking about a massive extra number of players adding to those figures, and as I said, I don't think you realise how big those numbers would be.

I cannot believe either Belgium or Holland would be anxious to increase those numbers massively and complately lose the identity of their leagues. If so, perhaps I am being obtuse!

They could form new partnerships in other league. Holland and Belgium was just an example. 

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