Parachute Payments for next season

[old_eastender]

Now that we know Villa are still in the championship, the following are I believe the championship parachute payment clubs for next season:

WBA, Stoke & Swansea - Approx 40m, to be followed by 34m 2019-20 and 15m 2020-21

Hull & Middlesbrough - Approx 34m, last season of payments (as they were both relegated after one season in Prem), so they could be both in big trouble if they don't go up next season.

Villa & Norwich - Approx 15m, last season of payments (they both got approx £34m this last season, so a £19m drop), again both likely to be in trouble if they don't go up next season.

Be interesting to see which ones of Hull, Boro, Villa & Norwich gamble and spend big to try and get back up, and which keep spending under tight control.

[Sweeneys Penalties]

15 minutes ago, old_eastender said:

Now that we know Villa are still in the championship, the following are I believe the championship parachute payment clubs for next season:

WBA, Stoke & Southampton - Approx 40m, to be followed by 34m 2019-20 and 15m 2020-21

Hull & Middlesbrough - Approx 34m, last season of payments (as they were both relegated after one season in Prem), so they could be both in big trouble if they don't go up next season.

Villa & Norwich - Approx 15m, last season of payments (they both got approx £34m this last season, so a £19m drop), again both likely to be in trouble if they don't go up next season.

Be interesting to see which ones of Hull, Boro, Villa & Norwich gamble and spend big to try and get back up, and which keep spending under tight control.

Saints weren't relegated

[old_eastender]

1 minute ago, Sweeneys Penalties said:

Saints weren't relegated

Haha OK Swansea... will edit post

[RobArnold10]

Interestingly though there’s a lot of noise around Villa and Norwich having to balance the books this coming season. Suggests to me that this season they’ve still been spending big on wages, and that they’ll need to lose the big earners before next season starts. Steve Bruce even suggested so in his post match interview yesterday. Can see them, Boro and Hull looking at a few championship players that they could still pay more than their current clubs. Ie, us, Brentford, QPR etc. 

The teams that have come down, I can see all three teams spending prudently, but who knows!

[Bristol Rob]

4 minutes ago, RobArnold10 said:

Interestingly though there’s a lot of noise around Villa and Norwich having to balance the books this coming season. Suggests to me that this season they’ve still been spending big on wages, and that they’ll need to lose the big earners before next season starts. Steve Bruce even suggested so in his post match interview yesterday. Can see them, Boro and Hull looking at a few championship players that they could still pay more than their current clubs. Ie, us, Brentford, QPR etc. 

The teams that have come down, I can see all three teams spending prudently, but who knows!

Terry was rumoured to be on 100k a week with Villa.

[Miah Dennehy]

Parachute payments, the filthy rich looking after their own. 

Come the revolution Premier League members will be first up against the wall

[Bristol Rob]

6 minutes ago, Miah Dennehy said:

Parachute payments, the filthy rich looking after their own. 

Come the revolution Premier League members will be first up against the TENT 

There you go.

[RedM]

1 hour ago, Bristol Rob said:

Terry was rumoured to be on 100k a week with Villa.

Well that’s money saved/freed up if he does as he says he will and now goes abroad as they didn’t get promoted. 

[123red1]

I can see Norwich going down next season. Struggled at times this year. Had a quality keeper on loan, Maddison is sure to get big offers and go. Can see this being a bad year for Norwich. 

[Davefevs]

6 hours ago, old_eastender said:

Now that we know Villa are still in the championship, the following are I believe the championship parachute payment clubs for next season:

WBA, Stoke & Swansea - Approx 40m, to be followed by 34m 2019-20 and 15m 2020-21

Plus the £6-7m per season  from the Championship.

Hull & Middlesbrough - Approx 34m, last season of payments (as they were both relegated after one season in Prem), so they could be both in big trouble if they don't go up next season.

They’ll get another £34m in 18/19 and £14m in 19/20

Villa & Norwich - Approx 15m, last season of payments (they both got approx £34m this last season, so a £19m drop), again both likely to be in trouble if they don't go up next season.

Yep, a big reduction....Terry cost £5m in wages alone this season just gone, plus a rumoured £2m signing on fee!

Be interesting to see which ones of Hull, Boro, Villa & Norwich gamble and spend big to try and get back up, and which keep spending under tight control.

Norwich have already started their cut backs in January.  Pritchard left for Huddersfield.

What none of us know is whether any of the clubs have already borrowed against future parachute payments.  If Villa have, gambling they’d go up this season, then they are under huge financial pressure, let alone recruiting for 18/19 season.  Leeds are servicing a huge debt, and that us holding them back.  Their wage bill isn’t dissimilar to ours (16/17 accounts).

We’ll soon see who the “haves” are and who are the “have nots” as we start to see summer recruitment.  There will be a lot of pressure on some managers to get off to a good start.

[JamesBCFC]

7 minutes ago, Davefevs said:

What none of us know is whether any of the clubs have already borrowed against future parachute payments.  If Villa have, gambling they’d go up this season, then they are under huge financial pressure, let alone recruiting for 18/19 season.  Leeds are servicing a huge debt, and that us holding them back.  Their wage bill isn’t dissimilar to ours (16/17 accounts).

We’ll soon see who the “haves” are and who are the “have nots” as we start to see summer recruitment.  There will be a lot of pressure on some managers to get off to a good start.

Comments on a Villa forum suggest that they have.

Theres been talk on there saying "could sell Grealish for £30m to raise some money"

There was a Telegraph article from before the Fulham match that suggested Villa might even have to sell their training ground.

[Lanterne Rouge]

9 minutes ago, JamesBCFC said:

Comments on a Villa forum suggest that they have.

Theres been talk on there saying "could sell Grealish for £30m to raise some money"

There was a Telegraph article from before the Fulham match that suggested Villa might even have to sell their training ground.

They`re starting to sound like another Bolton in the making. Not going up this year could be more devastating than we think for them.

[And Its Smith]

If there was no parachute payments, teams that went up would not spend and therefore not compete. It would make the Premier League awful. I can see the frustration with them but it is better than not having them at all.

[Harry]

This is a very interesting topic, thanks @old_eastender  

Looking at the 2016/17 wage bills for those teams makes interesting reading :

Swansea were 11th top payers in the Prem with annual wage budget of £98.7m. Clearly that’ll be reduced next season with offloading high earners and relegation clauses, but it’ll likely still be well in excess of the £40m parachute. 

Stoke were 13th highest payers at £84.9m. Again, even with clauses they’ll easily breach the £40m parachute. 

West Brom were 16th highest payers at £79.1. They’re certainly a few mil better off than the other 2 coming down. 

For perspective, Sunderland were at £84.4 when they came down and had very little to spend on new players. I’m likening Stoke & Swansea to their financial situation. They’re not quite the basket that Sunderland were but I can’t see them spending large and they’ll need to make do with the average squads they’ve currently got and try to buy some decent Champ players on average wages using funds they may get from selling their best players. 

WBA, for me, are in a better position. Their squad is better, but I don’t think they’ll lose too many (Evans will likely go for good money). I think they will cope with the wage bill and be able to invest in quality too. 

For the others, Boro have £34m coming. Their wages in 16/17 were £64.9. Again, this would have come down a fair whack last season. Their transfers last year were pretty much on balance - circa £50m spent, circa £48.5 received. I’d imagine their transfers out will not reach those heights again this year, and so you’d think the £34m covers their wages and their transfer spend will be based on pretty much what they accrue. 

Hull are also receiving £34m. Their wages in 16/17 were £61.3m. They spent approx £20m last year on signings, whilst recouping approx £45m, so had a gain of around £25m. Again, they won’t receive anywhere near that for outgoings this year, so I’d imagine they’ll also cut back on incomings. Although my guess would be that their wages are healthier than they were last year as they’ve brought in a fair amount of younger lads on lower wages (well, more reasonable wages at least). 

Villa’s wage bill in 16/17 was £61.5m. We all know they’re on their last parachute of £15m and have made it clear they need to cut back. Their transfers last year were actually a net gain of around £14m (the season before was when they spent bigger). I can see a few big departures, and with the likes of Terry leaving, their wage bill will be more sustainable. Will they spend big? Unlikely. But they’ll still have a very good squad and still be able to attract the better Champ players should they desire. Even with reduced budget, they’ll still be able to pay more than the majority of the league, so I’d expect them to try to pick up 3 or 4 good Champ players but lose 4 or 5 of their highest earners. 

Norwich had a wage bill in 16/17 of £55.1m. They spent approx £15m on players last year and recouped approx £34, so had a net gain of around £19m. They’ll lose Maddison for sure, but I think they’ve probably recovered their wage bill to a level that would be consistent with their turnover. I’d expect them to make a couple of decent signings and again would be able to pay a bit more than at least half the division. 

What does all that mean? I don’t know. I haven’t drawn conclusions from it all to be honest, just thought it’d be interesting to put the figures into the thread for others thoughts. I think it probably means that West Brom will be the best placed financially, Boro, Norwich & Hull should all be coping ok. Villa are the ones who have the most to prove. Swans & Stoke will just need to re-balance their books for a season or two I think. 

Final piece of context. Our wage bill in 16/17 was £20.9m. 

[Davefevs]

1 hour ago, RedDave said:

If there was no parachute payments, teams that went up would not spend and therefore not compete. It would make the Premier League awful. I can see the frustration with them but it is better than not having them at all.

Is a better option to give them money on promotion?  £55m to go up, £45m if they stay up, and £20m the third season.  You could just do the first year, but clubs might stockpile the money, although they’d earn enough.  At least that way you wouldn’t see relegated clubs getting an unfair advantage.  Clubs might become more disciplined in contractual terms, e.g. relegation clauses, release clauses.  What parachute payments are doing at the mo’, other than the unfair advantage, it giving relegated clubs a false sense of security, and also making them more prone to gambling on coming straight back up.

Thoughts?

[Silvio Dante]

The issue all the clubs have will be not being able to move players on.

If you’re talkIng an average prem wage it’s what - £40k per week? Take that and you’re paying £2m a year for a player. Add bonuses, clauses - nearer £3m. You go down, that player doesn’t want to be there and a la Sunderland, you let players go but still play them. Do that for 5 players and you’re £5m down. You then have the ones you can’t move - hello Rodwell.

I posted elsewhere that the gap between L1 and Champ is bigger than prem and champ. One of the reasons for that is the parachute payments may seem a lot, but when you deal with the unmotivated players, paying those you loan and the loss of ancillary income, it isn’t that much and you still need to cut back - particularly Y2 onwards. And that’s why a lot of teams struggle. 

[Bristol Rob]

Suppose the other issue some of these relegated clubs might have is attracting Championship players on Championship money.

If half their squad are on premier league money and have been under performing for the last couple of years then someone coming in to strengthen the squad is going to expect a salary on a par with their colleagues.

[Mr Popodopolous]

15 hours ago, Davefevs said:

What none of us know is whether any of the clubs have already borrowed against future parachute payments.  If Villa have, gambling they’d go up this season, then they are under huge financial pressure, let alone recruiting for 18/19 season.  Leeds are servicing a huge debt, and that us holding them back.  Their wage bill isn’t dissimilar to ours (16/17 accounts).

We’ll soon see who the “haves” are and who are the “have nots” as we start to see summer recruitment.  There will be a lot of pressure on some managers to get off to a good start.

Always assumed Leeds were one of the better placed- if not this summer then next.

Fairly low losses, big gates, excellent commercial revenue for this level...in the event of a load of sides getting hit by FFP, along with us I would have thought Leeds would have a decent chance to take an opportunity- not forgetting of course their wages 61% of turnover as of last season!

[Lanterne Rouge]

26 minutes ago, Mr Popodopolous said:

Always assumed Leeds were one of the better placed- if not this summer then next.

Fairly low losses, big gates, excellent commercial revenue for this level...in the event of a load of sides getting hit by FFP, along with us I would have thought Leeds would have a decent chance to take an opportunity- not forgetting of course their wages 61% of turnover as of last season!

I must admit, I`ve been thinking this could be Leeds` year. A good squad on paper and they seem to have some stability now. It depends a lot on this debt thing that @Davefevs has mentioned though I guess.

[Coxy27]

15 hours ago, Harry said:

WBA, for me, are in a better position. Their squad is better, but I don’t think they’ll lose too many (Evans will likely go for good money). I think they will cope with the wage bill and be able to invest in quality too.

Jonny Evan's contract with West Brom stipulated that he could leave the club for £3m if they were relegated. Therefore, no 'good money' for him I'm afraid.

[Davefevs]

4 minutes ago, Coxy27 said:

Jonny Evan's contract with West Brom stipulated that he could leave the club for £3m if they were relegated. Therefore, no 'good money' for him I'm afraid.

Ouch

[123red1]

It's amazing the money in going up or coming down, only yesterday there was someone on Sky, saying Yaya Toure who has played less than 20 games in the last two years at Man City has been offered a 2 year contract worth £10m at Wolves. It just shows what you have to compete with to get out of this league. We simply have no chance unless Lansdown sells up to some Middle Eastern Billionaire. Our project will help us as a business, and become better self funding, but the reality is every year we're further away from the Premier League. 

[WolfOfWestStreet]

16 hours ago, RedDave said:

If there was no parachute payments, teams that went up would not spend and therefore not compete. It would make the Premier League awful. I can see the frustration with them but it is better than not having them at all.

If only there was a salary cap and we could finally introduce some parity into football. 

[Bristol Rob]

27 minutes ago, 123red1 said:

It's amazing the money in going up or coming down, only yesterday there was someone on Sky, saying Yaya Toure who has played less than 20 games in the last two years at Man City has been offered a 2 year contract worth £10m at Wolves. It just shows what you have to compete with to get out of this league. We simply have no chance unless Lansdown sells up to some Middle Eastern Billionaire. Our project will help us as a business, and become better self funding, but the reality is every year we're further away from the Premier League. 

Until it all implodes and the top 6 decide that a European Super League is far more lucrative and we end up with a Prem 1 and a Prem 2 which won't get the television revenue of the current set up and about 15 clubs go to the wall with crippling debts.

[Ska Junkie]

1 hour ago, Red Right Hand said:

I must admit, I`ve been thinking this could be Leeds` year. A good squad on paper and they seem to have some stability now. It depends a lot on this debt thing that @Davefevs has mentioned though I guess.

They've also had investment from the US where the owner of San Francsco 49'ers bought a 10% stake in Leeds Utd. I would guess that means they've got a fair few £££ to spend.

I'm another who expects Leeds to be right up there this coming season.

[Lanterne Rouge]

11 minutes ago, Bristol Rob said:

Until it all implodes and the top 6 decide that a European Super League is far more lucrative and we end up with a Prem 1 and a Prem 2 which won't get the television revenue of the current set up and about 15 clubs go to the wall with crippling debts.

I`ve been saying this for years, it`s only a matter of time IMO. Fortunately, I think we would be one of the clubs best placed to ride out the storm unlike Forest, QPR et al.

[Bristol Rob]

8 minutes ago, Red Right Hand said:

I`ve been saying this for years, it`s only a matter of time IMO. Fortunately, I think we would be one of the clubs best placed to ride out the storm unlike Forest, QPR et al.

The football will still be marketable, but not on multi billion quid television deals.

And imagine what the parachute payments would be like if they found a way to relegate people from some European league.

[Lanterne Rouge]

2 minutes ago, Bristol Rob said:

The football will still be marketable, but not on multi billion quid television deals.

And imagine what the parachute payments would be like if they found a way to relegate people from some European league.

It would never happen. Imagine the nightmare scenario of Real or Man Utd having a bad season and going down. It doesn`t bear thinking about, it would be the end of civilization as we know it.

[Mr Popodopolous]

1 hour ago, Red Right Hand said:

I must admit, I`ve been thinking this could be Leeds` year. A good squad on paper and they seem to have some stability now. It depends a lot on this debt thing that @Davefevs has mentioned though I guess.

Depends on how much of their debt is split between long term, short term and medium term perhaps. They have a decent set of indicators on paper.

 

12 minutes ago, Red Right Hand said:

I`ve been saying this for years, it`s only a matter of time IMO. Fortunately, I think we would be one of the clubs best placed to ride out the storm unlike Forest, QPR et al.

In this League? I think us, Leeds, Brentford because of their very profitable transfer model and maybe Millwall and Sheffield United would be reasonably placed in that sense.

QPR- certainly not though they are making big efforts to be run correctly post the PL excess I believe. Still in a hole however.

[Mr Popodopolous]

18 minutes ago, Ska Junkie said:

They've also had investment from the US where the owner of San Francsco 49'ers bought a 10% stake in Leeds Utd. I would guess that means they've got a fair few £££ to spend.

I'm another who expects Leeds to be right up there this coming season.

Kind of irrelevant in an FFP context the takeover, although infrastructure can get unlimited investment.

As per the rules, 13 million a year for 3 seasons can be lost- that is 8 million shareholder loss, 5 million natural.

That said Leeds well within FFP, so on paper one of the best placed in the League this year or next (IMO of course).