At a meeting on Walsall’s ground on May 10th, Football League clubs reluctantly accepted a revised parachute payments structure devised by the Premier League. One might ask why they would be reluctant given that there was more money on the table. However, whereas all the talk up to now has been of the gap between the Premiership and the Championship, there are concerns that an equivalent gap is now opening up between the Championship and League 1. A de facto Premiership 2 may have been created in the view of some Football League bosses.
At a meeting on Walsall’s ground on May 10th, Football League clubs reluctantly accepted a revised parachute payments structure devised by the Premier League. One might ask why they would be reluctant given that there was more money on the table. However, whereas all the talk up to now has been of the gap between the Premiership and the Championship, there are concerns that an equivalent gap is now opening up between the Championship and League 1. A de facto Premiership 2 may have been created in the view of some Football League bosses.
As far as the Premier League was concerned, they say their move as a helpful gesture, although it might be suggested that the real agenda was to reassure their own clubs who thought they might be at risk of relegation and had stared into what they saw as a financial abyss. In recent years clubs relegated from the top flight received £22m in two equal instalments over two years. This was often insufficient as clubs struggled to reduce inflated wage bills, albeit partly caused by their own attempts to return to the promised land of the top flight as soon as possible. Some clubs fell back into League 1, e.g., Leeds, Southampton and Charlton Athletic.
The new plan will give clubs just over £49m over four years: £17.7m in year one, £14.5m in year two and £8.6m in years three and four. In other words, the cash life support machine will be withdrawn more gradually, although this could just encourage continued profligacy.
Championship clubs which don’t receive parachute payments will see their payout from the Premiership increase from £830,000 this season to £2.2m from August. When you add in an average annual payment from the Football League of £2.4m, this takes clubs’ total guaranteed income to £4.6m. That’s a sum they receive without kicking a ball.
South-East London club Charlton Athletic failed to return to the Championship after being defeated by Swindon Town in the semi-final play offs. Writing in the programme for the play off match, Charlton supremo Steve Waggott commented, ‘This will create a worrying divide for clubs in the lower leagues which receive a total income of £968,000 (League 1) or £650,000 (League 2). Some chairmen believe the proposal has shifted the inequality in the English game further down the divisions, while others feel this has created a Premier League 2 in all but name.’