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The price of relegation from the Premiership

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It remains to be seen which three clubs will be relegated from the Premier League this season, but they can expect to pay a high price.   Research by Nick Harris shows that the three demoted clubs can expect to see their income fall by at least £20m next season.  Crowds will fall, typically by more than 4,000 per game.  Only five of the 27 relegated teams from the past nine seasons have gone straight back up.

The research shows that the average relegated club's income fell £19.5m, year on year, immediately upon relegation, from £50.3m to £30.8m.   Recent times have seen bigger falls with Bolton, Blackburn and Wolves all taking hits of nearly £30m after dropping in 2012, and Newcastle and West Ham almost £30m each after relegation in 2009 and 2011 respectively.

Gates also fall by an average of 4,365 per game in the first season.   Blackburn, Middlesbrough, Birmingham and Leeds saw attendances drop more than 7,000.   Paradoxically, Norwich saw a 598 increase in the average gate after relegation in 2004-5.

Only one team of the last nine relegated from the Premier League has returned: West Ham.  Just 15 clubs relegated in the past decade have managed to return and it took Leicester 10 years.  Those that have made it took almost four years on average.   Nine of the 30 relegated clubs fell to League One or lower.  One of the reasons is that quality players leave and average players stay.

Bigger parachute payments do not compensate for the loss of the benefits of the lucrative TV contracts.   The ability to attract sponsors and commercial partners is damaged.

Big Hit?

It would be interesting to analyse profits of clubs who have fallen out of the PL. A drop in revenue or gates does not automatically mean a drop in profit, does it? If the best players leave then the wage bill drops (automatically if FFP is honoured).