The Football League failed to reach a decision yesterday on a new parachute payments package offered by the Premier League and has asked for more time to consider the proposal. The Premier League is taking the line that it is a take it or leave it offer. Under the proposal, made possible by increased revenues particularly from overseas broadcasting rights, parachute payments would be extended from two to four years with relegated clubs receiving £16m in each of the first two years and £8m a year for the last two.
The Football League failed to reach a decision yesterday on a new parachute payments package offered by the Premier League and has asked for more time to consider the proposal. The Premier League is taking the line that it is a take it or leave it offer. Under the proposal, made possible by increased revenues particularly from overseas broadcasting rights, parachute payments would be extended from two to four years with relegated clubs receiving £16m in each of the first two years and £8m a year for the last two.
The Premiership thought that they had come up with a deal that would please their smaller clubs wanting insurance against relegation such as Bolton Wanderers and Championship clubs struggling to get promoted. However, the main opposition has come from League One and League Two clubs who fear that the gap between them and the Championship would increase. Under the proposal clubs in the Championship who do not receive parachute payments would get £2.3m a year compared with between £0.75m and £1.4m at the moment. However, ‘solidarity’ payments to League 1 sides would amount to £325,000 and to League 2 sides £250,000 which is not a big advance on what they receive now.
Some Championship clubs also think that the plan would create a two-tier Championship, although it is arguable that that exists already with some clubs making the investment needed to get promotion and others focusing on staying in the Championship and not getting relegated to League 1.
It could be argued that increasing the parachute payments would encourage profligate rather than prudent behaviour among clubs promoted to the Premier League, although even the increased sum would not be enough to cope with the debts of Huil, let alone Portsmouth,
There is no appetite for a breakaway, despite what seems to have been a rather stormy meeting. The matter is likely to be settled by negotiation, for example by increasing the payments to League 1 and League 2 clubs.