Parachute Payments

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Parachute Payments

Post by Doc on Fri May 04, 2012 6:45 pm

Parachute payments were introduced a few years ago, because of the collapse of the 'Tractor Boys' et al, who gain promotion, then try and compete in the premier league, which means spending big on players. When they fail and get relegated they then have a massive reduction in money but still have expensive players and contracts to deal with. This happened with the likes of Derby, remember the team who broke the all time low points total for the premier league.

So Parachute payments were introduced, and recently were beefed up even more so that £48m is paid out over 4-seasons to teams dropping out of the prem. I think this is grossly unfair, because clubs should manage their finances better, and this season we'll see Wolves dropping out, but will be able to keep their squad together because they're all on affordable contracts. WBA are another well run club who only do enough to stay in the top flight and if they fail, they are able to bounce straight back.

But parachute payments are grossly unfair to the other teams in the championship. Classic case was Blackpool with a bankrupt chairman. The team win promotion, so they go and spend a few million on a new stand and bring in a load of journeymen footballers and a couple of overlooked belters. they do their best but fail at the last hurdle, but because of parachute payments they are straight back in the play-offs, along with West Ham and Birmingham. So each season the favourites are the 3 relegated teams because they each have £12m extra to play with, which the rest don't get in a whole season. Clubs like Wigan are now a much bigger club financially than say a Leeds Utd who will always struggle against big money parachute payments and stop them getting back into the big time.
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