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Football League set for crunch talks

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Dan Roan | 09:25 UK time, Thursday, 29 April 2010

It may have received little fanfare, but Thursday's emergency meeting of the Football League's 72 clubs in Leicester could be one of the most important in the game's recent history.

On the agenda are new Premier League plans to reform the way it distributes money to the lower divisions. Thanks to a bumper overseas broadcast deal, the Premier League board has drawn up a proposal that offers to increase the amount it shares over the course of the next three seasons. The Football League will discuss and vote on the plans, which, if approved, will be ratified at the Premier League's AGM in early June.

Parachute payments, the monies handed to relegated clubs to soften the financial shock of the drop, would more than double from £22m over two years to a massive £48m over four years, music to the ears of recently relegated Burnley, Hull and Portsmouth, who will all now enjoy a significant advantage over their Championship rivals in the coming seasons.

The background to these changes is widespread concern at the financial inequality between football's elite in the Premier League, who enjoy billion-pound TV deals, and the rest of football, who do not. This gulf, many believe, encourages clubs to engage in irresponsible spending in a desperate bid to stay in the lucrative top flight, leading to record levels of debt, excessive player wages and, in the case of Portsmouth and Hull, the brink of financial ruin.

Under the new proposals, solidarity payments - the money the Premier League hands out to the 'have-nots' of English football, partly to keep the Government off their backs - would also increase across all three divisions. Championship clubs would receive a considerable £2.2m per season, three times the £830,000 they have been given over each of the last three years and almost as much as they will receive from the Football League as a result of their own broadcasting deal.

A TV camera at a match
Billion-pound TV deals have changed the face of football

But clubs in Leagues One and Two stand to earn much less out of the Premier League's distribution plan. League One clubs would get just £325,000, while League Two clubs would receive £250,000, moderate increases on their current handouts. The fear at these clubs is that the new proposals affect the competitive balance of the Football League, handing Championship clubs, especially those fortunate enough to have spent time in the Premier League, an artificial financial advantage that will perpetuate success in the same way that the Champions League has created the so-called 'Big Four' at the very top of the domestic ladder.

One League Two chairman, who wished to remain anonymous, told me: "This does not represent a levelling out of the playing field, quite the opposite, and we will be voting against it. It's not fair, it's all about self-interest. It could cause a rift through the Football League and effectively creates a Premier League Two by stealth, while locking many of us out of the party. The Premier League is right to give this money but it's being done in the wrong way. It should be spread out more evenly so we can compete."

The meeting represents a serious challenge to the leadership of new Football League chairman Greg Clarke, with many smaller clubs set to vote against the proposals. Some Championship clubs are also unhappy that, in return for more money, the Premier League have attached some strings.

In effect, because of the natural overlap between the two leagues, with clubs constantly passing between each, the Premier League wants the Football League to bring their regulations closer to their own. This standardisation includes a demand that the Football League promises to reveal the identity of all owners, a transparency that could affect a club like Leeds United, where the identity of the club's shareholders remains a mystery.

The Premier League privately believes it is being reasonable with its requests and generous with its cash. Some would argue that the top-flight umbrella deserves credit for redistributing its money at all, especially when one considers that some of Europe's top leagues refuse to share any money to their lower leagues, France's Ligue 1 being a significant exception.

However, others would point to the vast sums that Premier League clubs enjoy, on average around £40m each per season thanks to the staggering new broadcast deals worth £1.782bn (domestically) and £1.4bn (overseas), despite the recession.

They suggest that these clubs should be more generous to those lower down the footballing ladder, especially considering that before the Premier League's creation in 1992, the Football League shared its TV money much more equitably, with as much as a quarter of the total income given to the bottom two professional leagues. Today that would equate to hundreds of millions of pounds. Instead, the Premier League proposal offers a total of £7.8m a year to League One and £6m to League Two.

Generous? It depends on your perspective.

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Football League chairman Greg Clarke speaks to BBC Sport's Dan Roan


UPDATE 1500 BST:

I'm at the meeting at Leicester City's Walkers Stadium now waiting to discover if the Football League have voted in favour of the proposals. All 72 clubs have been locked in talks all day and I'm told there is plenty of concern, especially at the size and duration of the parachute payments.

Many clubs feel this is a case of the Premier League simply protecting their own - smoothing the effect of relegation and giving them a built-in advantage, leading to the kind of 'yo-yoing' between the top flight and the Championship that we've seen from West Brom in recent seasons.

The fear is that this will make promotion for a club like Blackpool, who haven't benefitted from a parachute payment, almost impossible to achieve in the future. There is also fear that the sovereignty of the Football League is under threat due to the conditions the Premier League is insisting on.

If the Football League votes against this deal, it will be the first major fall-out between the two. I'll keep you posted.

UPDATE 1720 BST:

I'm now on the way back from Leicester and can digest the Football League's "unhappiness" at the Premier League's funding proposals. If not outright rebellion, this is certainly the first major fall-out between the richest and oldest leagues in the world.

All 72 Football League chairmen rushed out of their emergency summit to their executive saloons, mobiles pressed to their ears, with many wearing worried expressions. Even the usually buoyant Barry Fry and Pete Winkelman looked perturbed.

No wonder they appeared concerned. They had just decided NOT to accept what, on the face of it, seems an incredibly generous offer from the Premier League - a doubling of the parachute payment to relegated clubs and a trebling of the solidarity hand-outs to those in the lower leagues.

Football League chairman Greg Clarke told me the clubs are "unhappy" and fear the Premier League's proposals could "distort competition". In reality, the Championship clubs are broadly behind the plan. Those in Leagues One and Two are not, so new fault lines are appearing in the English game.

However, the whole of the Football League is concerned that the Premier League is trying to throw its weight around by issuing a number of conditions. Clarke already has a tough job trying to keep so many clubs of widely varying wealth together. Now he has to go back to Premier League chief Richard Scudamore and ask him to tweak the deal. I don't envy him.

PS. You can hear more on this issue on 5 live at 1920BST and see the Clarke interview on this website later.

Comments

  • Comment number 1.

    So basically it's as you were then.

    The rich get richer the poor go bankrupt trying to survive in the upper 2 leagues because of the disparity.

    The clubs on parachute payments can more effectively buy their way back into the top flight, meaning we'll more than likely have 17 premier league clubs plus a big six trading places between the Prem and the Championship.

  • Comment number 2.

    This is a bad idea. I'm a Leeds fan and whilst I'm hopeful of us being in the championship next year and a 'have' rather than a have not I like the fact that my team have had the potential to swing from champions league to div 1 in a few years. I wish we were still at the top but there should be potential for barnet toreach the premiership. My Dad was a wolves supporter and growing up we watched Wolves climb the leagues and Dad just lived long enough to expect premier league survival.

    This protectionism is a terrible thing for football. Dreams and upsets are slowly being pulled from the game, take the romance and the 'footballs afunny old game' 'game of two halves' giant killings and I'll be watching a lot more Rugby.

    And at the risk of being called a bigot this will mean morecheap foriegn players in the championship and the premiership issues for English talent spreading down.

  • Comment number 3.

    This deal while not great for leagues 1 and 2 will still be far more than most lower leagues across Europe can offer I would certainly expect to see a lot more players from Scotland head down south.

    The standard of the Championship player will be better than many top leagues and I would expect more and more internationals from smaller nations to consider playing in that league if they cannot get a game in the Premiership.

  • Comment number 4.

    I personally think it is disgusting that the parachute payments for clubs being relegated to the Championship has been increased. It should be a punishment to get relegated with clubs having to deal with far less income than in previous years, not an easy path back to the top flight.
    It also means that unless clubs are backed with a wealthy owner, they can no longer dream of climbing the football league ladder as a club coming up from League One is at such a financial disadvantage to clubs coming down from the Premiership, as the relegated Premiership teams are getting £12 million a season!!
    It is something that needs to be changed otherwise as the League Two chairman implies, it will effectively turn into a 23 team Premier League with the same teams going up and down every season.

  • Comment number 5.

    I'm in agreement that it doesn't seem all that fair to the Football League to be getting disproportionate amounts of money from the Premier League. Of course, as mentioned, it's better than not receiving anything, but the thing is that there is a significant imbalance between the Premier League and most of the other clubs in professional English football. This then leads to a lack of competitiveness in the English game, which only contributes further to the arguments that the Premier League has too much money, etc.

    Therefore, I am of the belief that a more balanced payment system between the Leagues would not just be better for clubs, but also for the English game and English football in general. Think about it: if a club has more money, then they have the opportunity to expand themselves as a football club, which means that they have the opportunity to improve their youth facilities and coaching staff, which then leads to the possibility of more talent being spotted, recognised and nurtured by English clubs. This provides a greater depth in talent, which then means that there are more talented players available to play for clubs, which could actually encourage more clubs to buy English players rather than "foreign" players. It would also mean that there would be more talent at the disposal of the England manager when it comes round to selecting International squads. All in all, a win-win situation for everybody, as clubs could potentially never run short of good players as a result of having the right facilities.

    The only thing that would need to be looked at though, is simply the principle of looking at club budgets and checking that clubs who are recieving this kind of money are spending it responsibly and in a way that will be sustainable to the club and its development. After all, too many clubs appear to not be being run in a responsible manner, which is causing them to go into administration, so this would be something that, I feel, would make things a lot better, and would also ensure that all clubs are in line with UEFA's "financial fair play" policy, which is set to come into force in 5 years' time.

  • Comment number 6.

    The whole point of the Premiership was to move money from the bottom to the top. Televison money should be used to support the smaller clubs to give extra balance throughout the leauges and compensate for smaller crowds.As a Blackpool fan I would say this wouldn't I?

    The truth remains however that competion increases quality but all the big clubs care about is their income and who can blame them? the only way to stop them creating a self perpetuating monoply is to legislate against it.

  • Comment number 7.

    The Football League needs to start playing hard ball. Teams like Portsmouth, Burnley and Hull when relegated become Football League teams and subject to Football League rules. With this being the case they need to take the line that the Premier League can keep their parachute payments. Even if it means that the Premier League takes the decision to subsequently not give any money to the rest of the football ladder, so be it, the fact is that parachute payments are distinctly uncompetitive and give a huge advantage. If Premier League clubs weren't able to rely on them, the teams coming down would find themselves in huge financial problems. After a few teams went into administration, other clubs would learn that it simply isn't worth spending money you don't have seeking Premier League safety and whilst this would undoubtedly cause a yo-yo effect at first with the same teams going up and down, eventually this pattern will be broken and a well-run team that invests in good young hungry players will beat the odds and stay up.

  • Comment number 8.

    I think that yes, the Premier League are very reasonable to distribute some of their broadcasting money but I do agree that it is working in the wrong way. I don't think parachute payments should be as significant as the are at all. If anything they should be less.

    Many teams reach the premiership with the knowledge that they can spend because they will always receive the parachute payments. If you kept the parachute payments as they are (or even lowered them), then more money could be distributed, and more evenly to the football league.

    It would benefit the premier league in the long run if they invested more in the lower leagues instead of concentrating their payouts mainly to relegated clubs - allowing lower teams to bring in better quality players as well as develop their own, giving the whole league more quality leading up to the premier league. If you have better quality promoted to the premier league, you have a more competitive league.

  • Comment number 9.

    The idea that "concern at the financial inequality between football's elite in the Premier League" can be helped by more than doubling the amount clubs that make it the Premier League get (increasing parachute payments from £22m to £48m) is utterly baffling.

  • Comment number 10.

    It's very unfair that the clubs in the Championship will get so much more money than clubs in League 1 & 2, especially the relegated Premier League clubs.

    Do they not realise how entertaining League 1 & 2 have been this season? They obviously don't, just because we are the small clubs.

  • Comment number 11.

    I fail to understand why parachute payments are necessary. Surely all the FA/Football League/Premier league have to do is to mandate ALL player contracts must have relegation clauses reducing wages if relegated.

    I know a lot of fans of Championship clubs unhappy with parachute payments as many of the relegated clubs gamble by keeping the Premier League players in the hope they will go straight back up.

    Under these plans there is even less incentive to balance the books, you have a bigger window to gamble with the finances to get your club back into the Premiership.

  • Comment number 12.

    I agree with the majority that parachute payments create an unfair advantage to teams coming down from the Premier League. Maybe it would be better if the money was given to the 3 Championship sides gaining promotion to help them in their quest for Premier League survival. Just a thought.

  • Comment number 13.

    Could someone explain to me why the money should not be spread completely evenly? Including the same amount being given to spread out amoung non league teams? The benefits would be huge with lots of clubs being able to increase their infrastructure and stadiums with lots of clubs developing youth systems thanks to the new regulations of the 6 + 5 ruling. This would surely lead to very well run clubs with long term ambitions actually being very comfortable and who knows maybe some lower league teams could actually make a profit. Maybe it just comes down to football teams generally being incredibly poorly managed with most of them not caring at all for the local area and just about their own money.

  • Comment number 14.

    Parachute payments need to be ditched and the money distributed evenly across the football league. Its about time the clubs and the players realised that if they are in the Championship they get paid Championship wages regardless of whether they were in the PL the previous season or not. Contracts should be negotiated with different wages dependent on the division you play in so if a Championship player gets relegated to League 1 he knows he will get a pay cut and if he gets promoted to the PL he'll get a pay rise.

  • Comment number 15.

    Be fair. Watford and Derby were recently in the Premier League and are now hanging on to the Championship by their nose. Money does not buy success.

  • Comment number 16.

    I think the Football league need to have talks about adding a 5th professional league the Blue square Premier is backing up with ex league clubs, can some cash be sent down to us?

    While the premier league squanders millions on agents fees, over paid footballers etc, teams in non league lose their registration rights and funding for youth programs meaning they soley have to pay for this full time program that helps hundreds of kids, out of their own pocket. It is not right that the premier league gets millions to assist their youth academies while teams such as Cambridge, Oxford, Wrexham, Mansfield, York and R+D don't get a penny towards the costs of FULL TIME youth set up.

    Player registration is also lost, so when a team spends years bring a youngster up, they can have a team higher up take that player without giving the non league team a penny in compensation.

    Conference clubs should not be penalised for trying to develop young local players while big clubs spend their money developing foreign players.

    Please take 5 minutes to read the website, sign the petition and help create fair funding for non league football.

    www.protectfootballsfuture.co.uk

    Thanks

  • Comment number 17.

    Greed, Money and Sky TV is killing Football in this country.

  • Comment number 18.

    An increase in parachute payments is a joke, if anything they should be reduced. There will essentially be a Premiership of same 23 as the gap is increasing between those teams exposed to the riches of the top flight and the rest, whilst there will also surely be more cases of debt in the Championship as clubs outside of those 23 aim to achieve promotion. The payments may save the three relegated teams from debt, but I feel this push from other teams will lead to far more debt overall.

  • Comment number 19.

    2 things to remember:
    1 - the premier league don't really want to give all this money to relegated teams. They have to as the other option is that as soon as a team gets into the Premiership they'll spend and spend to stay there - and when they're relegated they'll go bust. Because whose heard of a 'sensible' chairman/board?
    2 - as for the lower leagues whinging, what do teams in league 2 think teams in the vauxhall conference (or whatever its called these days) think about them being give £250k/year. A level playing field? I think not.

  • Comment number 20.

    Why go from 2 years support to 4? Why not compromise on 3 years and add the difference saved to the pot for the lower leagues. It would make a big difference there.

  • Comment number 21.

    It will simply be a Premier League of 23, where the same teams circulate between the divisions (WBA/Wolves/Birmingham/West Ham), keeping their Prem League benefits but not their Prem League status.

  • Comment number 22.

    Should just be £1M per Football League club regardless of division and only 2 years parachute payment.

    That would give relegated clubs 2 seasons to get their houses in order and prevent lower division clubs going into administration due to tax debts so easily. Couple that with a salary cap by turnover and it should be a healthier scenario

  • Comment number 23.

    In terms of the financial package proposed, significantly increasing the package to the football league in reflection of the premier leagues increased TV revenu is necessary yet generous. I dont see why relegated premiership clubs deserve such a disporportionate increase in parachute payments in comparison to the rest of the footballing league. I was unsure as to whether they EACH got 48 million over four years or whether it was 48 million to be distributed between the three of them. Either way in comparison to the payments to other clubs, minor tweaks could even it all out.

    Reducing parachute payments (if 48 is to be distributed between them all) to 36 million, one million a year less for each, and reducing the general championship per club to 2 million would free up 17 million pounds to be paid to league 1 and 2. If split 10 - league 1 and 7- league 2 the bonus structure would look like this:
    Relegated teams: 2 million + 3 million parachute payments each year.
    championship: 2 million
    league 1: roughly 700-800,000
    league 2: roughly: 500,000

    If the 48 million is per club then that is outrageously excessive and undermines the competitiveness of the football league. Even then tweaks could sort it out (on this pay scheme). 48 million would be 12 million a year. make it 8 million a yaer, still a significant advantage. freeing up 12 million a year to redistribute to the other divisions.

    A pay packet proportionate to what I proposed above is both realistic and would ensure financial competition at least from the premier league is fair.

  • Comment number 24.

    So Portsmouth, Hull and Burnely will now receive 144,000,000 for getting relegated - this is more than the 48 clubs in the bottom 2 divisions will receive in 10.5 years!

    Put it this way and you realise what a disgrace this really is.

    Tell the Premier League to shove their blood money, they have ruined English football over the last 2 decades

  • Comment number 25.

    11 : I fail to understand why parachute payments are necessary. Surely all the FA/Football League/Premier league have to do is to mandate ALL player contracts must have relegation clauses reducing wages if relegated.


    this is a very good point and one that has already taken effect at Sunderland, every new player when signing a contract has i believe a 40% wage reduction clause. the parachute payments are unfortunately important to clubs getting relegated, but the new amount is ridiculously high, they serve to protect the people who have no business sense who run the football clubs into the ground in the hopes of lets be honest only managing a 5th place finish.

  • Comment number 26.

    I can't see how or why they would want to increase the parachute payments to clubs going down. Hopefully the Football League will block this. That extra money could go to all the other clubs in Division 1 or 2. Why not give 250k to Conference sides then 500k to League 2, £1 mil to League one and £2 mil to championship clubs.

    Also as some people have already said. Clubs should have clauses in all players contracts about going down a division and a reduction in salary. I can't. Surely this seems logical to everyone.

    I also think that any club that goes into administration should be thrown totally out of the league and start from the bottom rung of all the leagues. This doesn't stop some clubs going into debt for a few seasons but means the clubs have to be run sustainably.

  • Comment number 27.

    It isn't just the football league this has a knock on effect with the whole football pyramid. League 2 clubs complaining because they are only going to get 250k, which is 250k more that the conference plus TV money on top which the conference don't get as well. So if they get a bigger share its going to make the gap even wider and so conference clubs will out-spend themselves to get to their golden egg. Similarly if the payments do to conference clubs, the leagues below will do the same. Surely the best way would to have ripple effect right through the leagues in the football pyramid and so grass roots football is sustainable, with the PL getting £3.1bn there has got to be enough money to go around?

  • Comment number 28.

    I think the parachute payment could be spread a little more evenly with relegated clubs getting 35 million over 3 years and the extra 13million going to the rest of the league.

    It would also be good to see the League adopt the PL's new rule on squads - 25 over 21s with at least 8 being home grown. Alternatively the payment could follow crickets example of rewarding clubs who give places to home grown players.

    It would also be good if more of the PL cash got down to the Blue Square leagues as so many clubs at that level struggle to make ends meet.

  • Comment number 29.

    Am I wrong in thinking clubs like Hull City got into their financial difficulty by spending money on players/wages that they hadn't yet recieved based on future TV earnings - in effect spending money they hadn't yet got? If so...increasing parachute payments will only serve to lull them and many other sides into further trouble by gambling continuing paying out big fees 'whilst the Sun still shines' in the hope swift one-way returns on the gravy train before their tickets run out.

    Nobody seems to have learnt from the ITV Digital collapse? A cap needs to be put on clubs preventing them spending money that isn't in their hands or fans will forever be at the mercy of speculators with one eye on the 'parachutes'.

    There is zero doubt that the way money is currently distributed breeds anti-competitiveness (reflected in the boing-boing effect of most sides between divisions.) A supporter's philosophy by nature is 'heaven or bust' and if it's bust...eternal hope that there's always some chump willing to take their club on - but remember sharks and vultures only circle easy prey for the juicy morsels they can feast upon.

  • Comment number 30.

    Doesn't seem fair, although still worth bearing in mind that League One will be getting almost as much as the Scottish Premier League

  • Comment number 31.

    The increase in parachute payments to relegated Pl clubs was a bad idea in the first place and to increase the amount of money given is a real disadvantage to the rest.

    But clubs in the lower half of the Pl will vote in favour of it, just in case they`ll be relegated too one day. Very bad idea.

  • Comment number 32.

    @ #1

    no, very wrong and very silly comment, the responsible do not go bankrupt, those who are not then obviously do, the most successful clubs, the biggest supported clubs and those clubs with the best business plans and most astute management become the richest clubs and stay the richest clubs through hard work and/or private investment. the so called poor little downtrodden lower league clubs need to stop whingey whiney it's not fair talk and just put the work in to reach the top and not ask for more handouts from the premier league. it's pathetic.

  • Comment number 33.

    Surely the best thing for the Premier League and football in general is for the monies to be spread as evenly as is possible thus creating more competitiveness throughout football as a whole. So why then do the smaller clubs continue to get kicked to the ground. It's like being invited to a party and then getting left outside all night.

  • Comment number 34.

    "This protectionism is a terrible thing for football. Dreams and upsets are slowly being pulled from the game, take the romance and the 'footballs afunny old game' 'game of two halves' giant killings and I'll be watching a lot more Rugby. "
    ---------------
    I am generally against protectionism, in principle, on any trade or sporting activity, save some important exceptions. I agree also here that the [football] product with all that money dependent on it must have the investment in fans of ANY club up everywhere. That is only secured when it becomes a game and relegation / promotion is earnt on merit, and not by edging out the rest through superior resources. We risk then having an NFL type franchise in the EPL and CL just as likely.

    We talk fondly about the passion behind the "English" game. Where's the passion in a result so heavily influenced by billions of yen or ryals moved behind closed betting shops? Don't bank on the integrity of the result staying forever without fierce defence of the game itself.

    Now, to Rugby .... and Cricket. See the successful commecial enterprises there, the Guiness Premier League, the Heineken Cup - and the IPL. Look at the parallels off the pitch.

    What place does the Modi story have in current domestic football?

  • Comment number 35.

    Like others, I don't get why parachute payments are needed. Doesn't think just dangerously increase premiership spending as they know they have a safety net if they are relegated anyway?

    How about linking the payments to a team's average attendance in the previous season? That way clubs would have a major incentive to work with its local community to bring more people to football games. Knock-on effects would be more attractive football plus ticket prices might come down too. Teams would have to build up their infrastructure instead of gambling on highly-paid players to get promotion and the subsequent riches of the higher division.

  • Comment number 36.

    " 24. At 12:32pm on 29 Apr 2010, Phil wrote:
    So Portsmouth, Hull and Burnely will now receive 144,000,000 for getting relegated - this is more than the 48 clubs in the bottom 2 divisions will receive in 10.5 years!"

    The 48million is over 4 years, therefore 12mill a year, NOT 48mill a year!

    However, regardless of that, your argument is sound. The Premier League is "The Best League in the World", but has ruined football in this country.

    I'm not altogether sure that I want my club, QPR, to go up to the Prem, as I certainly would not spend money on a Sky subscription.

    It is easy to say that the "Jumpers for goalpost" days were better, but as football has improved, in general, the treatment of lower league clubs has got worse.

  • Comment number 37.

    What happens to the parachute payment in Portsmouth's case - a club tied up in Administration?

  • Comment number 38.

    If money is to be distributed fairly or not, how about changing some of the rules on transfers?

    Any player who leaves a lower league club for one higher up should automatically have a 25% sell-on clause in their new contract so that if the bigger club makes any profit, the lower club gets their fair share of the deal, they found and often nurtured that player for years after all.

  • Comment number 39.

    Unfortunately I believe we're at the stage where the amounts of money in football aren't going to go away, the rich will get richer and the oor will continue to struggle, gambling in order to gain promotion, or avoid relegation. I simply feel that if this money is going to come into football there should be some control over where it is spent. Rather than letting teams throw it away on transfer fees and player salaries, how about making them subsidise the cost of tickets, making football more affordable?

  • Comment number 40.

    Just let us be clear about what is going on here - this is absolutely PL Div 2 by stealth. A team can come bottom of the PL on zero points and next season will be handed a cheque that is nearly the entire amount that Leagues 1 and 2 will share between them.

    The deal stinks. The PL and FA should be ashamed. Standardising rules is fair enough, but the PL want to pick & choose which rules are adopted. League 2 now has limits on wage bills as a percentage of club income. Would the PL be happy to go with that progressive idea? No, wouldn't sit well with Sky, would it?

  • Comment number 41.

    Great blog Dan, it definitely gets to the heart of the matter. As a supporter of Wolves, a club that has recently been a beneficiary of parachute payments in their current form, I fully oppose the increase in term of such payments to relegated clubs. Once Wolves' parachute payments expired in 2006, we managed to completely remodel our financial strategy from how it had previously been run - rather than offering over-the-hill players like Darren Anderton lucrative contracts in the Championship (with little incentive for such players to actually achieve promotion or maintain any desire for success), we quite publicly announced that we were determined to only recruit young players who genuinely wanted to improve themselves and had the hunger necessary to achieve success. Whilst we have always been one of the better-supported clubs in the division, with the infrastructure and financial support that comes with it, we had often been considered great under-achievers because of our comparitive lack of success. I believe that our recent revival is principally down to our chief executive Jez Moxey's prudent decision to change the club's transfer policy, a decision which has now left us in great shape on and off the field (also aided in no small part by the large investment from our chairman Steve Morgan). I think the point I am trying to make is that we have proven that success in the Football League can be achieved without having large amounts of money thrown at it - obviously having a fantastic manager like Mick McCarthy also helps a great deal! I therefore believe that the more level the playing field the better, and the increase in parachute payments will only serve to create a wider gulf between the 'haves' and the 'have-nots'... good fiscal sense from the league's member clubs is much more effective. I would also be extremely disappointed if the decision to distribute less money throughout the lower divisions was ratified - this would in my opinion spell disaster for what is the heart and soul of football. Many clubs in the bottom two divisions and below struggle to make ends meet as it is, so how would denying them a fair share of the pot benefit them any more? It just proves that the people who make these decisions would struggle to run a bath, let alone a football organisation!

    By the way, I know your father-in-law David Monkman quite well, he makes a very good pub quiz team member!

  • Comment number 42.

    To be honest, fair distribution of these kinds of sums is an impossible job, and we do need to bear in mind that it is the Premiership that raises this money, rather than the Championship/Football League.

    It is easy to criticise the parachute payments but they are necessary for the Premier League to retain its interest. If they didn't exist, then effectively, pretty much every club in the Prem bar those who are virtually guaranteed not to go down would have to budget as a Championship club, i.e. getting Championship standard players on Championship wages. Bearing the fates of Portsmouth and Hull in mind some people may think that this could be a good thing but one of the attractions of the Prem is that any club can beat any club - its one of the reasons why this has been such an interesting season: from Burnley at home to Man U early on, to Wigan beating Arsenal a few days ago. These results would become so much less likely with reduced parachute payments that the Prem would effectively become even more of a 2-tier league than it is now and most of us don't want that to happen.

    Personally, I think the balance is about right at the moment.

  • Comment number 43.

    This probably isn't a popular opinion, but I don't believe that the English game can currently support 4 professional leagues. Think how many clubs are fighting for their survival in the lower leagues, and how many barely scrape by each season.

    Perhaps the Governing bodies of the English game are seeing this and this is the first steps towards consolidating the English Leagues into 2 Professional Leagues and then semi-pro amateur leagues below, much like the rest of Europe.

    It may be that the introduction of the Premiership and its huge payments to the top clubs has brought about this situation, but I do believe that some consolidation needs to take place.

    (And before accusations about my club loyalty, I'm a Plymouth fan, so I would not 'win' if such a thing came about).

  • Comment number 44.

    The whole system of parachute payments is flawed, money should be given to the clubs on promotion to, not relegation from the premier league, this would help clubs who spend money they haven't recieved on reaching the greed is good league.

    I also agree that if the payments stopped, then more clubs would 'do a Burnley' and not spend beyond their means, this would no doubt cause some clubs to yo-yo between the greed is good league and the football league, but it would eventually work and clubs would survive in the greed is good league, if all non top 4 clubs worked on this principle. It may also get rid of some of these forgeign mercenaries, who are no better than young prospects, but are only here for the money, and are stifling home grown talent out of the game.

  • Comment number 45.

    #38. Any club can put in a sell on clause in contracts or players that have been sold. Sometimes that means a slightly lower original transfer fee in the first place. I can remember Arsenal selling David Bentley for only a few million and had a clause like that in. When he went from Blackburn to Tottenham he was sold for about £17 million in which Arsenal picked up about £8 million.

    I'm sure clubs like Southampton and Cardiff have got some sort of sell on clause and also number of appearances for the club fee sorted out for the likes of Bale, Walcott and Ramsey.

  • Comment number 46.

    Why increase parachute payments at all? I could not agree more with those who are saying that the current level is more than sufficient. If a club gets relegated, then they should not be able to rely on the rest of the PL to give them money so that they can go straight back up again. A more equal distribution, giving more to the League 1, League 2 and even Conference clubs has to be the way forward if we are to see strong national teams in the future. These clubs develop a lot of the young talent that the PL clubs then snap up for a fairly low fee (e.g Jonjo Shelvey).

    The sooner all clubs are forced to operate within a balanced budget the better. That way properly run clubs will benefit and those with big ideas and no grip on reality will disappear.

  • Comment number 47.

    I totally agree that parachute payments need to be scrapped for a more even playing field. Look at newcastle this year who went down with a bunch of overpaid underperforming players from the prem including argentinian world cup sqaud members and managed to use to the parachute payements to keep the squad near enough intact and bounce straight back. its simply wrong that theey should be rewarded and helped out by the premier league to get straight back !

    Any money provided (and righly so in my view) by the premier league should be divided evenly with an additional bonus paid to each team in all divisions subject to achievement. So to put it simply a team who finishes top of the championship gets say 500,000, 2nd 400,000 and so on. This rewards clubs for doing well rather than overspending with the knowledge they will get helped straight back into the prem. This format incorporates what the prem does with its own league members when rewarding financial bonuses at the end of each season.

    Leagues 1 and 2 and by my own reckoning the blue sqaure premier should be given a piece of the pie in the same way and obviously cup glory brings more bonus. this again means the fairytale of the FA cup, the so called worthless cup ect is preserved as clubs in lower leagues know the further they get the more they make in bonus and convinces them that fielding a strong team is a worthwhile excersice even when challenging for other honours.

    I also believe that all clubs should be made to sign a mandate stating that a set amount of their income (say 10% as a nice round figure) should be set aside purely for the development of fascilites and youth teams. if you then take the 6+5 rule that the prem is trying to implement then this should improve things across the whole pyramid of the game. Clubs would see an increasing number of players coming through into their team from their surrounding area (which fans love to see) and as they have developed over a period of time would also be benefitting as these guys actually WANT to play for the shirt and the england team would also benefit team over a longer period. all clubs would then be less reliant on bringing players into the club on higher wages in the first place and then going into administration on the back of vast overspending.

    Now this is never going to happen overnight and yes there would be casualties but it would form a much better base across all areas of the game and if you want examples of just how effective this can be just look to spain and athletic bilbao. The club has played in the Primera División of La Liga since its start in 1928. They have won La Liga on eight occasions. played in europe and had many honours is known for its cantera policy of bringing young Basque players through the ranks, as well as recruiting top Basque players from other clubs. It can be done and can be done in the right way and be successfull !!!

  • Comment number 48.

    Yeah, I'm a Newcastle fan (a fan of a team who could easily go down next season and therefore massively benefit from these new rules), and I still think this is a bad idea. It's just not competitive.

    It will be extremely interesting to see if this gets voted in or not. There are obvious reasons for most of the Championship clubs to vote for it, although they are ultimately selfish ones. This is especially true since it's, for the most part, a really tight league. Most of the teams in it stand a chance of at least getting in the play offs every season, and therefore being able to possibly benefit from these new rules. Ergo, I believe the majority of the Championship's chairmen will be giving this matter serious consideration.

    Good blog, by the way.

  • Comment number 49.

    This is an interesting one. It certainly does feel that the Premier League has money it could filter to lower leagues. The parachute payments do seem excessive and are not something I would want to see increased. The point is, where do you draw the line? Fully appreciate the concerns being expressed by League One and League Two clubs about the apparent creation of EPL 2 by this proposed funding formula. However, as a follower of Salisbury City spare a thought for the Conference sides, many of whom have full-time professionals and, like League clubs, are chasing a dream. If the gap grows with League One and League Two, what prospects are their for non-league clubs? As I say, where do you draw the line?

  • Comment number 50.

    I think what most epoeple don't realise is that when a team liek West Brom are relegated and then go back up after one season their parachute payments stop and are put into the pot for the lower divisions.

    Surely the way to balance this out is when a club yo-yo's their additional money should be put into leagues one and two and spread out evenly this would effectively double the amount of money each club gets every year as this will be an extra £12 million per year for league one and two clubs and if they yo-yo again thats another £12 million for the next couple of years in the pot.

    Ryan

  • Comment number 51.

    My club, Nottingham Forest, has been doing it's very best this season to compete at the top end of the Championship with Newcastle and West Brom. They already came down with bigger and better squads than we had so why should they be given a further advantage of parachute payments. Hardly an equal footing.

    Scrap the parachute payments altogether and force premiership clubs to manage their finances properly in case of relegation.

  • Comment number 52.

    I do kind of appreciate why Parachute payments are needed, but I don't think they need to be so high. If they're going to increase it over a 4 year period instead, why don't the payments decrease each season?

    Instead of £48m over 4 seasons, why not make it £24m over 4 seasons:

    Season 1: £12m
    Season 2: £6m
    Season 3: £4m
    Season 4: £2m

    the other £24m x 3 can be given to the championship and leagues One and Two. That would mean this:

    Relegated Championship club in 4th season: £5.2m
    Other Championship Club: £3.2m
    League One Club: £1.325m
    League Two Club: £1.25m

    If that's not a fairer option then I don't know what is!

  • Comment number 53.

    I wish people would stop mentioning this 6 + 5 rule. This has nothing to do with local players. The new rule that comes in means that a foreign 16 year old player can be in the youth set up of a club for 3 years and will then be classed as coming through the youth team set up. It has nothing to do with being from that nation or area. It's just that the team has finished his development that's all.

  • Comment number 54.

    Surely if this creates disparity in the Championship and below, the main consensus seems to be the money. Surely if the relegated clubs get promoted sooner than the 4years then the parachute payments would get dividend among all the clubs in the Football League?

  • Comment number 55.

    This is ridiculous. Every team in the football league should have the same payment otherwise you're just slowly creating a hierarchy of clubs by stealth. The larger clubs already have the benefit of larger attendances and thus derive much more revenue from that. By levelling out the payments and paying a Championship club a little less and a League Two club a lot more, not only would it massively help struggling League Two sides but it would promote greater competition.

    Not that I expect the EPL to take any of this into account, nor the greedy wannabes in the Championship.

  • Comment number 56.

    I can't help but notice that all the clamouring for more money by lower league teams is in effect showing a huge lack of confidence in their current players.

    Football is not all about money, it is about the game itself and how it is played. The FA Cup shows us year in and year out how small teams can and do beat the bigger teams and this happens in European competitions as well, which is why Inter and Bayern are in the final instead of Real Madrid and Man U (or Barcelona etc).

    Yes players need to be bought and better squads will be needed over time to overcome new challenges as a club gets promoted but the focus should always be on simply winning the matches one at a time.

    There should be much stricter rules on how and when clubs can take on debt (if at all) so as to stop clubs risking bankruptcy to effectively buy their position in a higher league. This would make it so that a lot more clubs would get demoted in their first season after promotion, but this continual trend would mean that more and more clubs over time would receive parachute money.

    Only three clubs can go and up every season, so yes the majority will stay where they are, and yes this means less money, but focus on your own game instead of trying to get more money than you have earned on your own to buy players that won't even guarantee you promotion anyway.

  • Comment number 57.

    It's a catch 22, if they stop all parachute payments then those teams who do go down the following season will be stuck with long term expensive player contracts with nothing to back it up & will probably go under. Plus if they don't overspend when they get to the premiership, they will go down anyway and keep yo yo-ing back in. No easy solution on this one, to late if anything.

  • Comment number 58.

    Directors of football clubs carry the dreams of supporters.

    Rule changes should be made, but only to make it more of an level playing field, not less of a level playing field.

    If the rules go through as stated, more and more directors will realise that supporters dreams are just too heavy to carry any more.


    I am a season ticket holder at Bristol City, and I am concerned about the effect that this might have on clubs like Bristol Rovers and many others.


    I hope that those looking after the game look after the many, and not just the few.

  • Comment number 59.

    It's nice to see the reward for playing poorly for thirty-eight games is that you are entitled to a huge payment to put right the losses you incurred. The Football League, in my opinion, should hold out very firmly about the way in which the Premier League is quietly trying to adopt the Championship.

    As an avid follower of the Pyramid system well past the Football League, it is worrying to consider the impact that these parachute payments could make. Any Blue Square Premier team already has a struggle enough to assure League Football status, but this new scheme basically prevents them from progressing in future years.

    Under the new scheme, it would be almost impossible to believe that after a few years, teams could match the efforts of Bolton and Manchester City of yester-year. Surely there should be more clarity across the whole level? Obviously Championship sides are entitled to more money than League One and so on - that's a reward for playing at a higher level.

    But to further recompense 'losing' sides such as Hull and Portsmouth this season seems rightly unfair. If a team lives outside it's means, whether purposefully or by poor investment, the rest of the League shouldn't be penalised to make up for it.

  • Comment number 60.

    Bravo Premier League ... if you were trying to be covert in your actions then I would be worried. However you are blatantly trying to muscle out smaller clubs when the WHOLE game is in dire straits and clubs fold with barely a ripple of protest in the media.

    You own Park Lane and Mayfair and the green set, now you've got your eye on Coventry Steet, Leicester Sq. and that red set just after "Free Parking". Leaving the rest of the national to divide the "Old Kent Road" between them just is not going to fly.

  • Comment number 61.

    This has to happen, but the disparity from Championship to League One could be smoothed out better.

    Right now clubs that are promoted from the Championship are in dire trouble. Survival is too often too expensive. And what is more telling than the number of promoted clubs who go right back down - in the last decade, 43% of teams that got promoted went straight back down, and 57% were down within two years. But perhaps most tellingly, of the teams that have seen relegation, only nine ever made it back to the Premier League, whereas 20 have not. Of that 20, 25% are not even still in the Championship.

    That suggests that promotion and relegation is broken - the pressures of promotion are too high, and the blow of relegation is too steep. Increasing the immediate support for relegated teams and bolstering the overall quality of Championship teams will help stabilize that.

    All the same, it is important not to simply move the gap downwards to the Championship/League One line.

  • Comment number 62.

    I am a fan of both Carlisle and Leeds. This has been a bit of a conflict of interest recently, but I'm 22 and became a fan of both my home-town and my local team in 1997, and even in 2004 it was Premier League v Conference. So I have seen all aspects of the Football League, both financially and on the field.

    Anyway, and this will be unpopular, and is entirely idealistic, but why pretend that the Football League as it stands is in any way workable? From about 4th in League 1 to 13th in the Premiership, the quality of the teams is about the same. Create a closed shop system without relegation, featuring the biggest (not best) 32 teams in the country, possibly including the Old Firm, divided into two divisions. Share the TV revenue equally between each club and have playoffs for the title: more parity, more fan interest, worldwide TV revenue. English football would instantly become the greatest yearly sporting event in the world. This is the Leeds side of me speaking.

    Now the Carlisle side: The smaller clubs will NOT die; there will always be purists and those unable to afford PL ticket prices to keep them afloat. What bankrupts clubs like Chester City and Halifax is being told they are/can be equal to even mediocre Championship teams. The current promotion/relegation structure is a remnant of 1890s sporting ideals, and these days just gives the likes of Munto Finance and Michael Knighton the wrong ideas. The Football League should remain, integrate the Blue Square National, North and South, retain promotion and relegation and aim to promote financially viable community clubs, which should be all about player development and local fans. Ban any PL team from signing an under-21, so that all young talent would have to play in the FL first, and this gives fans a reason to watch the lower-league teams. Then, when a talented player turns 21, he will instantly be wanted by multiple Premier League teams; his transfer fee will therefore be inflated accordingly and the local team he has played for will receive adequate compensation for developing him - no more John Bostock/Danny Rose style thievery.

  • Comment number 63.

    I am sorry to say the Premiership is ruining football there is an elite club at the top that only the richest can really be patr of out side of that elite top six there is no competition other than avoiding relegation. If any club outside theat elite group goes out of their way and wins a trophy it is frowned apon and the perpetrators are called cheats and hounded example being Portsmouth. The club was run into the ground trying to compete and when it's benfactor decided to jump ship it was left high and dryin terrible finacial debt. The fact is a good percentage of the Premier and Football league is buit on sand and onnly the richest will be able to compete. The sooner the elitist club breaks away with thier friend in Europe the better it will be for English football then teams will be able toget back being able to compete on an equal playing field (excuse the pun)

  • Comment number 64.

    The only alternative in the end will be legal action to ensure 'fair competition' in all our football leagues and competitions. For all clubs there needs to be a cap on levels of debt, players wages and a much fairer distribution of the wealth generated by the millions of ordinary football fans who just want to see that their club stands an equal chance of success against all others. We also need to give our English youngsters a better chance as well. Football needs change. We've put up with the stagnant FA and Football League and the money hungry Premier League bodies for too long. It's time for something different just like in politics.

  • Comment number 65.

    Get rid of the parachute payments and give the money to all 72 League clubs.

    more and more lower division clubs are in trouble and surely 48 million is a samll price to pay to ensure that the lower league clubs continue to develop talent for the prem League/National teams?

    I think it is pervers that clubs like Portsmouth should get 48 million quid in 4 yrs for MISMANGEMENT a joke really... and teams like Luton/Bournmouth have problems with finance cause the greedy Prem League does nowt for leagues 1+2...

  • Comment number 66.

    The parachute payment is, and always has been, a disgrace.
    Rewards for failure are no surprise in a country that pays massive sums to the banking industry, golden handshakes to failed execs, etc.
    But a football club is primarily a business. When a company goes to court and is wound up, the court doesn't then award it 30 million quid.
    If you, as a football club CEO, board member, manager, cannot manage your football club further ahead than the next 9 months, with a contingency plan for being relegated and player contracts that reflect that, and you get relegated with no way to pay all salaries next season, that really is your problem, no one else's.

  • Comment number 67.

    It would please me greatly to see the money go to lower division clubs, but as a Brentford supporter I am still seeing the effects of ITV Digital on my club. What happens if the money does start going to lower division clubs, their outgoings increase because suddenly there's more money than they ever knew what to do with, then the money goes away again? Could result in even more teams going to the wall.
    Of course, the Football League itself isn't helping, what with its petty grudges against teams such as AFC Bournemouth, only lifting their transfer embargo AFTER the January window had closed, despite the club being clearly run on a much improved basis, the squad running on empty since the word 'go', having no choice but to risk players' careers by fielding them while injured and often only able to name 3 subs, but did the Football League allow them to sign anyone on emergency, or even a player who wanted to play for free in order to help the club? No!
    One solution to the problem of clubs going to the wall is more stringent auditing processes and setting a hard limit on how much debt they're able to have. This must be done for every single League club in the country, possibly also down to Conference level, in order for the good of the game.
    The funny thing is, clubs are often run most rationally when they're in administration. Perhaps a qualified administrator should be in charge of every League club's finances.

  • Comment number 68.

    #38: Yes, excellent point about mandatory sell-ons, but further sale of players should come under greater scrutiny q.v. the Michael Turner saga!

  • Comment number 69.

    #50 "Surely the way to balance this out is when a club yo-yo's their additional money should be put into leagues one and two and spread out evenly this would effectively double the amount of money each club gets every year as this will be an extra £12 million per year for league one and two clubs and if they yo-yo again thats another £12 million for the next couple of years in the pot."
    The problem with this is that you'll end up with irresponsibly run clubs in the lower divisions taking a gamble on if a relegated team will yoyo back up and budgeting 500k more than they're guaranteed. 500k is A LOT of money in L1 and L2. Brentford's budget is less than 3 times that and what would most L1 and L2 clubs do for 500k?

  • Comment number 70.

    Clearly there is room for compromise. If the Premiership gave parachute payments over three years at £16 million , £12 million and £8 million then there would be a £12 million savin, which could be split as extra payments of £350,000 and £ 150,000 to League One and League Two clubs respectively.

  • Comment number 71.

    The way i see it, the more money that would be split between leagues 1&2 by diluting the parachute payments would only increase the money demanded by the players, agents, WAGS etc... Therefore any fiscal advantage would soon be negated.

    What i would like to see is the gradual decrease of the chute payments as proposed by others on here and the spare millions put into a pot entrusted to the football league.
    Money from this pot could then be applied for by clubs wanting to buy their grounds back, ground improvements, fan ownership schemes and so on. This money should also allow for proper and transparent auditing, so that none of the clubs end up having to sell their grounds to speculators again 5-10 years down the road again.

    This hopefully would secure the underpinnings and the futures of the smaller clubs and make them part of their local communities again.



  • Comment number 72.

    The Premier League should think more about grassroots and making sure such lavish funding makes its way down to the very essence of football and the kids who aspire to play to a better level. It's shocking that teams in the BSP such as Cambridge Utd don't get funding for their youth development centres. Check out http://www.protectfootballsfuture.co.uk/index.shtml.

  • Comment number 73.

    The previous link shouldn't have a . at the end. Also meant to say look at www.cambridge-united.co.uk/page/NewsDetail/0,,10423~2038745,00.html

  • Comment number 74.

    The blog by Dan Roan and discussion is excellent. The anti competitive nature of the new parachute payments threatens to reinforce and impose the boring anti competitive structure on the Championship as well.

    How interesting is it seeing a top 4 team hammer the lower premiership/ team by 4 or 5 goals, similarly, how interesting would be watching a relegated premiership club beating a lower championship team or newly promoted 4 or 5-0 ?

    I don't watch much premiership football anymore because it is predictable and uninteresting.

    It is all about maintaining a monopoly, maintaining profits and money. This cynicism and cold calculation of the top clubs is killing the passion in the game. In the end it will lead to football being ruined in this country.

  • Comment number 75.

    The Premier league is already going stale and the way things are going it isn't going to improve. The only interest in it is how well clubs like Hull, Burnley, etc are going to do and the odd season where somebody different might sneak 4th place. The majority of matches aren't even entertaining to watch.

    The Football League should cast the Premiership adrift. Tell the greedy set of so and sos to go on their way and see how long they can sustain their product with the same few clubs. The Championship is the 4th or 5th most watched league in Europe and in terms of quality it's 4th or 5th best in the world. The Football League has a product that is competitive and I believe capable of standing on its own. It wouldn't be long before the paying public started to move from watching the overpriced, stale PL to watching a far more entertaining and reachable FL.

    This might force the biggest clubs into a European super league, well good luck to them, and good riddance. The few PL clubs left will then be begging for their FL places back in which case they should be told where to go or charged a substantial portion of their gains from the PL to get in.

    Perhaps I'm in dreamland, but I care about football and fear it is already broken possibly beyond repair. Desperate times call for desperate measures.

 

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