The relegation of Newcastle United means that the club will lose out on the proceeds of the first year of the £5.1bn television deal with Sky and BT. The bottom placed club will receive more money than has gone to Leicester City as champions this year.
Newcastle will receive parachute payments of 55 per cent of the share of broadcast revenue in the first year, then 45 per cent and 20 per cent in subsequent years, if they do not win promotion.
The relegation of Newcastle United means that the club will lose out on the proceeds of the first year of the £5.1bn television deal with Sky and BT. The bottom placed club will receive more money than has gone to Leicester City as champions this year.
Newcastle will receive parachute payments of 55 per cent of the share of broadcast revenue in the first year, then 45 per cent and 20 per cent in subsequent years, if they do not win promotion.
The Magpies saved about £13m by slashing the wage bill in 2014-15, a 17 per cent fall compared with the previous season. The club generated pre-tax profits of £36.1m. Money has been spent on players this season, but it has not been spent well.
In contrast at Sunderland, Ellis Short, the Irish-American businessman who founded private equity group Kildare Partners, has spent to ensure that the club won their relegation battle. Sunderland increased its wage bill by 11 per cent in 2014-15, making a pre-tax loss of £25.4m.
Research has shown that the best predictor of a team’s league placing is the club’s wage bill.