Parachute payments

[Robbored]

Every Championship club that doesn’t receive them all see them as unfair and a huge financial benefit to the relegated clubs.

I posted awhile back about every PL club should have relegation clauses in their players contracts that apply the average Championship wages.That way these relegated clubs would have no financial bonus over other Championship clubs.

That way there’d be not need to have the PP system in place.

This policy wouldn’t affect the majority on the PL clubs.

So why not?

[Major Isewater]

24 minutes ago, Robbored said:

Every Championship club that doesn’t receive them all see them as unfair and a huge financial benefit to the relegated clubs.

I posted awhile back about every PL club should have relegation clauses in their players contracts that apply the average Championship wages.That way these relegated clubs would have no financial bonus over other Championship clubs.

That way there’d be not need to have the PP system in place.

This policy wouldn’t affect the majority on the PL clubs.

So why not?

In theory I agree however Players would have to sign the contract. If you were a newly promoted club or a smaller Prem club you may have even more problems in signing the quality players needed. 
Concerning parachute payments of course it is grossly unfair to the clubs in the Championship who don’t have them but football, like life ,  has never been fair. 
The bigger question is why clubs need so much money to operate and why they can’t, at least , break even. The sport is completely unsustainable as it stands. 
 

[ExiledAjax]

1 hour ago, Robbored said:

So why not?

Not that this needs another thread, but it wouldn't work.

1) if you force PL teams to reduce wages to the average Championship wage then you're putting them at a disadvantage as inevitably half of the other teams will be paying more than them.

2) this assumes that you even know what the average is. Yes agents and players will have an idea of it, but if the average is publicly known then that probably means clubs have published their wages. Which they won't do.

3) is it just players that stay with the club or is it new signings as well? Manager? Coaches? Office staff? Canteen staff? Who else are you going to impose a wage cut on during a cost of living crisis?

4) will PL agents/players accept this? Might they simply switch to being released on relegation, which wouldn't solve the problem. Most already have singularly negotiated wage reductions (that still see them paid well above the "average" championship wage) anyway, but that's very different to a block blanket cap.

5) related to 4 above, have fun fighting the PFA and their lawyers. They're powerful, they're well resourced (by the millionaire players that make up their membership), and Maheta and his mates won't let this through.

It's a noble idea, but imo you've not thought through the full repercussions.

Edited May 5 by ExiledAjax

[Lrrr]

My idea was that you take their wage bill at the point of relegation, they then get this amount but it’s paid monthly essentially covering their wage pay out each month, if a player leaves their wage is subtracted from the amount the club receives each month and therefore they can’t just bring in a new player on the same wage amount, it means any incomings will have to be carefully judged financially and covered by the clubs outgoing transfers meaning they can’t pay big fees and stupid wages when coming down 

[Sir Geoff]

42 minutes ago, Robbored said:

Every Championship club that doesn’t receive them all see them as unfair and a huge financial benefit to the relegated clubs.

I posted awhile back about every PL club should have relegation clauses in their players contracts that apply the average Championship wages.That way these relegated clubs would have no financial bonus over other Championship clubs.

That way there’d be not need to have the PP system in place.

This policy wouldn’t affect the majority on the PL clubs.

So why not?

Most do

[Port Said Red]

18 minutes ago, Robbored said:

Every Championship club that doesn’t receive them all see them as unfair and a huge financial benefit to the relegated clubs.

I posted awhile back about every PL club should have relegation clauses in their players contracts that apply the average Championship wages.That way these relegated clubs would have no financial bonus over other Championship clubs.

That way there’d be not need to have the PP system in place.

This policy wouldn’t affect the majority on the PL clubs.

So why not?

I am not sure if employment law would be involved with a reduction of an individuals wages based on a teams performance? A player could easily argue that relegation was not down to them as an individual with a variety of statistics.

[IdliketoRogerMoore]

1 hour ago, Robbored said:

Every Championship club that doesn’t receive them all see them as unfair and a huge financial benefit to the relegated clubs.

I posted awhile back about every PL club should have relegation clauses in their players contracts that apply the average Championship wages.That way these relegated clubs would have no financial bonus over other Championship clubs.

That way there’d be not need to have the PP system in place.

This policy wouldn’t affect the majority on the PL clubs.

So why not?

The top 6 don’t have these types of clauses in them, but most clubs have relegation payment clauses in them already, and have done for decades! 

[Mr Popodopolous]

What about..

Parachute Payments plus Solidarity Payments into a pot. Along with EFL TV money 

Then you pool all 3 and split flatly by the current divisional weightings. 

This at a stroke removes the TV chasm between Parachute and Solidarity, reduces the cliff edge between PL and Championship.

There are probably some flaws to it but it feels a better solution than the current scenario, it would he in conjunction with wage reductions on relegation etc.

[sh1t_ref_again]

I have made this point a number of times before and cannot see why it would not be a solution-

You allow the parachute payments as it is now or modify slightly, but if the relegated club takes the offer of the payments they start the season with a points deduction, (would be simple to work a formula that equates PP to points). The amount they take can be on a sliding scale, so the bigger the PP the bigger the deduction.

This simply puts the onus on the relegated club to decide can they afford to keep players or sell them, it may help to encourage clubs to put a trap door clause in players contracts

This then levels the playing field and non PP clubs will be on more of an equal footing, or relegated clubs can cut the cloth to suit their business plan.

It works in golf and horse racing with handicaps, why not football?

[ExiledAjax]

1 minute ago, sh1t_ref_again said:

You allow the parachute payments as it is now or modify slightly, but if the relegated club takes the offer of the payments they start the season with a points deduction, (would be simple to work a formula that equates PP to points). The amount they take can be on a sliding scale, so the bigger the PP the bigger the deduction.

Interesting.

There is some chat in the industry to the effect that this is basically what is starting to happen with PSR/FFP fines. The recent Everton and Forest cases have both discussed the danger of imposing a fixed ratio of -points:£breach.

That danger being that if clubs know that a breach of £6.5m means -1 points, then a nefarious but talented club can calculate how much it can breach the PSR/FFP rules by without suffering a points deduction that results in relegation (from either the league or European places).

So my fear would be that you'd see, for example, Leicester come down, and they'd say "we reckon we would normally finish 9 points clear of 3rd place". So they gamble, and take a -8 penalty, and get a truckload of cash in return. They hit par, still go up, and have softened the blow. 

You also still warp the general pay structure of the division, so causing clubs like us to half to either risk bankruptcy/breach of FFP in chasing the wages, or limit ourselves to those players who will take what we can offer. So you still get the disparity and concentration of talent in the rich teams.

I don't think it's a shit idea in principle, but I think it's very prone to being gamed and this not actually solving anything.

[IAmNick]

Surely the solution is to restrict the premiership, rather than allow such crazy spending you then have to have contingencies in the championship? 

Parachute payments (or the relegation clauses in the OP) are treating the symptom, not the cause imo.

We need proper wage caps and restrictions in the premiership, which then allow new teams to be more competitive without having to spend tens/hundreds of millions to finish 1 place above relegation when they get there - or face oblivion if/when they get relegated.

Edited May 5 by IAmNick

[sh1t_ref_again]

2 minutes ago, ExiledAjax said:

Interesting.

There is some chat in the industry to the effect that this is basically what is starting to happen with PSR/FFP fines. The recent Everton and Forest cases have both discussed the danger of imposing a fixed ratio of -points:£breach.

That danger being that if clubs know that a breach of £6.5m means -1 points, then a nefarious but talented club can calculate how much it can breach the PSR/FFP rules by without suffering a points deduction that results in relegation (from either the league or European places).

So my fear would be that you'd see, for example, Leicester come down, and they'd say "we reckon we would normally finish 9 points clear of 3rd place". So they gamble, and take a -8 penalty, and get a truckload of cash in return. They hit par, still go up, and have softened the blow. 

You also still warp the general pay structure of the division, so causing clubs like us to half to either risk bankruptcy/breach of FFP in chasing the wages, or limit ourselves to those players who will take what we can offer. So you still get the disparity and concentration of talent in the rich teams.

I don't think it's a shit idea in principle, but I think it's very prone to being gamed and this not actually solving anything.

Sorry not sure I really get the point, if all you are doing is taken what is done now, i.e giving a prem club money so they can afford players contracts with no consequence, but we all agree this gives them a big advantage over non PP clubs, by introducing a penalty to level the playing field makes sense. The clever bit will be getting the points deduction so its not to severe that any prem club will be looking at relegation, but also taking away the huge advantage they have now and making it fairer to the rest of the division.

I have not looked over the last few seasons, so would need a lot more calculation, but if you said that a prem clubs takes 100% of PP so starts the season on -20 points the 3 relegated clubs would still have been around the playoffs, so perhaps deduction needs to be 25 points, but a formula could be worked that gives a deduction but with a good season would still be near the top and promoted back. 

Of course a lot of number crunching will go on to work out if I am better off with 50% and lower deduction, or 25% of PP, but this will encourage the prem clubs to come in line

 

[Mr Popodopolous]

39 minutes ago, ExiledAjax said:

Interesting.

There is some chat in the industry to the effect that this is basically what is starting to happen with PSR/FFP fines. The recent Everton and Forest cases have both discussed the danger of imposing a fixed ratio of -points:£breach.

That danger being that if clubs know that a breach of £6.5m means -1 points, then a nefarious but talented club can calculate how much it can breach the PSR/FFP rules by without suffering a points deduction that results in relegation (from either the league or European places).

So my fear would be that you'd see, for example, Leicester come down, and they'd say "we reckon we would normally finish 9 points clear of 3rd place". So they gamble, and take a -8 penalty, and get a truckload of cash in return. They hit par, still go up, and have softened the blow. 

You also still warp the general pay structure of the division, so causing clubs like us to half to either risk bankruptcy/breach of FFP in chasing the wages, or limit ourselves to those players who will take what we can offer. So you still get the disparity and concentration of talent in the rich teams.

I don't think it's a shit idea in principle, but I think it's very prone to being gamed and this not actually solving anything.

 

22 minutes ago, sh1t_ref_again said:

Sorry not sure I really get the point, if all you are doing is taken what is done now, i.e giving a prem club money so they can afford players contracts with no consequence, but we all agree this gives them a big advantage over non PP clubs, by introducing a penalty to level the playing field makes sense. The clever bit will be getting the points deduction so its not to severe that any prem club will be looking at relegation, but also taking away the huge advantage they have now and making it fairer to the rest of the division.

I have not looked over the last few seasons, so would need a lot more calculation, but if you said that a prem clubs takes 100% of PP so starts the season on -20 points the 3 relegated clubs would still have been around the playoffs, so perhaps deduction needs to be 25 points, but a formula could be worked that gives a deduction but with a good season would still be near the top and promoted back. 

Of course a lot of number crunching will go on to work out if I am better off with 50% and lower deduction, or 25% of PP, but this will encourage the prem clubs to come in line

 

Got a loose starting point for a formula here as it stands now.

Parachute Payments minus Solidarity Payments=Well it depends but freshly relegated it's £35-45m.

You lop that off the FFP calculations and then the club can either make that up by March or take a points deduction based on the Forecast Overspend with that excess excluded.

Either would improve the competitiveness of the League.

By way of example, your 3 Year Loss Limit to the first season down is £83m plus Allowables.

You are forecast to have £20m in headroom with all revenue counted in full so £63m.

Remove that, you have a shortfall of £15-25m to make up by March. 12 point deduction in the Spring if you can't, more sales, offloads and restraint if you can.

This £63m and £20m within becomes £98-108m and therefore will restrain a club, present and future monitoring would need to come into play too.

Perhaps even 15 points if losses rise as Birmingham got plus 3.

The Premier League points deductions are improving but too soft so far, they need a formula with no notable Upper points cut off. I liked the sound of the 6 points as a starting point then 1 point per £5m.

I've got 2 or 3 different plausible figures for the Leicester current position.

Edited May 5 by Mr Popodopolous

[milo1111]

6 minutes ago, IAmNick said:

Surely the solution is to restrict the premiership, rather than allow such crazy spending you then have to have contingencies in the championship? 

Parachute payments (or the relegation clauses in the OP) are treating the symptom, not the cause imo.

We need proper wage caps and restrictions in the premiership, which then allow new teams to be more competitive without having to spend tens/hundreds of millions to finish 1 place above relegation when they get there - or face oblivion if/when they get relegated.

This is of course the optimal common sense solution to remedy this nonsensical situation.

it won’t happen though as common sense was discarded long ago, the premiership was in fact created to satisfy greed and the top clubs care not about the wider game.

so we are where we are. A race to the bottom where clubs are constantly looking for new ways to evade sanction snd overspend and throw more and more obscene sums of cash at players and even more annoyingly , their agents.

the game went down the pan years ago. I still love city but football as a whole makes me want to puke. 
 

I can’t wait for the day the top third of the prem joins the Saudi backed world league for tens of billions and ignorant  fans bleat on about sporting merit and integrity which in reality went years ago.

[ExiledAjax]

48 minutes ago, sh1t_ref_again said:

Sorry not sure I really get the point, if all you are doing is taken what is done now, i.e giving a prem club money so they can afford players contracts with no consequence, but we all agree this gives them a big advantage over non PP clubs, by introducing a penalty to level the playing field makes sense. The clever bit will be getting the points deduction so its not to severe that any prem club will be looking at relegation, but also taking away the huge advantage they have now and making it fairer to the rest of the division.

I have not looked over the last few seasons, so would need a lot more calculation, but if you said that a prem clubs takes 100% of PP so starts the season on -20 points the 3 relegated clubs would still have been around the playoffs, so perhaps deduction needs to be 25 points, but a formula could be worked that gives a deduction but with a good season would still be near the top and promoted back. 

Of course a lot of number crunching will go on to work out if I am better off with 50% and lower deduction, or 25% of PP, but this will encourage the prem clubs to come in line

My point is purely one of being careful of unforseen consequences. 

As soon as you place a £value on a single point, you enter a world where points can effectively be bought or sold, even if that's a club buying/selling points to itself in future seasons.

If we're going to down something like a handicap then I'd be more in favour of handicapping the points that a relegated PL team wins for a win/draw. Maybe they only get 2.5 for a win and .5 for a draw?

I don't love that idea, as I don't want to link financial clout to sporting success any more than it already is, but my gut feeling is that it's less open to manipulation than your system.

Edited May 5 by ExiledAjax

[Sir Geoff]

2 hours ago, sh1t_ref_again said:

I have made this point a number of times before and cannot see why it would not be a solution-

You allow the parachute payments as it is now or modify slightly, but if the relegated club takes the offer of the payments they start the season with a points deduction, (would be simple to work a formula that equates PP to points). The amount they take can be on a sliding scale, so the bigger the PP the bigger the deduction.

This simply puts the onus on the relegated club to decide can they afford to keep players or sell them, it may help to encourage clubs to put a trap door clause in players contracts

This then levels the playing field and non PP clubs will be on more of an equal footing, or relegated clubs can cut the cloth to suit their business plan.

It works in golf and horse racing with handicaps, why not football?

Better still and much easier to implement would be redistribution of 'unused payments.' Take this season for example, Leicester are technically owed another 2 years PP's. This money goes back into the PL pot. Why not distribute that money evenly between the 20 clubs not promoted.

This season could be a double bonus if Leeds or Southampton go up.

This way all clubs then benefit from PP's and over time the 'cliff edge' will become less severe.

[sh1t_ref_again]

5 minutes ago, Sir Geoff said:

Better still and much easier to implement would be redistribution of 'unused payments.' Take this season for example, Leicester are technically owed another 2 years PP's. This money goes back into the PL pot. Why not distribute that money evenly between the 20 clubs not promoted.

This season could be a double bonus if Leeds or Southampton go up.

This way all clubs then benefit from PP's and over time the 'cliff edge' will become less severe.

Think that should happen, but does not really address the issue as that money shared between all the non PP clubs would have little impact.

[RoystonFoote'snephew]

I've never had a problem with parachute payments per se as it was always my understanding that they were designed to ensure that clubs relegated from the PL could meet the contract commitments (not just player contracts) they had entered into in order to compete in the PL. My problem with PP is that many clubs do not use the payments for these continued existing commitments but view PP as an additional pot of money for new commitments. I therefore believe that at the end of the season in which the club has been relegated the PP they receive is to be only that to meet current commitments, which is to be ring fenced in the accounts, and not a penny more. I have no problem with payments being made over the lifetime of the current commitments, obviously to cease if  promoted back to the PL with any unused PP passed back to the FA for redistribution. Any use of PP for new commitments is to deemed illegal and the club will receive a £1 million pound fine and a minimum 12 point deduction. 

[formerly known as ivan]

Easiest solution is the cap wages at all levels surely?

[ExiledAjax]

5 minutes ago, formerly known as ivan said:

Easiest solution is the cap wages at all levels surely?

Good luck getting it past the PFA https://www.thepfa.com/news/2021/2/9/pfa-welcomes-withdrawal-of-salary-cap-rules

[Robbored]

5 hours ago, ExiledAjax said:

It's a noble idea, but imo you've not thought through the full repercussions.

No I haven’t thought it through fully which is why I started this thread. There are posters on here who understand the issue far more than I and their take is a valuable to me on the matter.

I’ve seriously considered phoning TalkSport to hear what Simon Jordan has to say, I appreciate that SJ is a marmite character but he certainly understands the complexity of the football industry.

[Robbored]

5 hours ago, Sir Geoff said:

Most do

Do they? Why the PP then?………..

[ExiledAjax]

24 minutes ago, Robbored said:

Do they? Why the PP then?………..

Ask yourself who voted for parachute payments?

[Mr Popodopolous]

6 hours ago, Sir Geoff said:

Most do

 

28 minutes ago, Robbored said:

Do they? Why the PP then?………..

 

3 minutes ago, ExiledAjax said:

Ask yourself who voted for parachute payments?

The thing is both these statements are true.

For a relegated side it is usually somewhere between 25-50% in cuts. Not all sides of course.

TV money falls by 90% if you are talking PL to Championship  perhaps more.

Granted player sales, replacement with cheaper, letting contracts expire etc are already part of the process but I just wonder if Parachute Payments were abolished or cut to the level of Championship Solidarity Payments.

[Sir Geoff]

13 hours ago, Robbored said:

Do they? Why the PP then?………..

To protect the integrity of the Premier League.

Don't think of it as an 18 team league but a 24 team league.

When clubs are relegated they should be able to keep their better players, so that when promoted they remain competitive ( which is basically Forest's argument for spending big over the past 2 years).

It's all about maintaining the PL as the leading brand worldwide. 

[Robbored]

2 minutes ago, Sir Geoff said:

To protect the integrity of the Premier League.

Don't think of it as an 18 team league but a 24 team league.

When clubs are relegated they should be able to keep their better players, so that when promoted they remain competitive ( which is basically Forest's argument for spending big over the past 2 years).

It's all about maintaining the PL as the leading brand worldwide. 

And there was silly old me thinking that PPs were to prevent relegated clubs from getting lumbered with PL player contracts………..

[Sir Geoff]

41 minutes ago, Robbored said:

And there was silly old me thinking that PPs were to prevent relegated clubs from getting lumbered with PL player 

That's the smokescreen that was sold.

It's all about keeping the PL as competive as possible which in turn boosts income from overseas tv deals.

[Davefevs]

2 hours ago, Sir Geoff said:

To protect the integrity of the Premier League.

Don't think of it as an 18 team league but a 24 team league.

When clubs are relegated they should be able to keep their better players, so that when promoted they remain competitive ( which is basically Forest's argument for spending big over the past 2 years).

It's all about maintaining the PL as the leading brand worldwide. 

Often said the same, it’s a 24 team league, where they let 20 play each season.

[sunningdalered]

20 hours ago, RoystonFoote'snephew said:

I've never had a problem with parachute payments per se as it was always my understanding that they were designed to ensure that clubs relegated from the PL could meet the contract commitments (not just player contracts) they had entered into in order to compete in the PL. My problem with PP is that many clubs do not use the payments for these continued existing commitments but view PP as an additional pot of money for new commitments. I therefore believe that at the end of the season in which the club has been relegated the PP they receive is to be only that to meet current commitments, which is to be ring fenced in the accounts, and not a penny more. I have no problem with payments being made over the lifetime of the current commitments, obviously to cease if  promoted back to the PL with any unused PP passed back to the FA for redistribution. Any use of PP for new commitments is to deemed illegal and the club will receive a £1 million pound fine and a minimum 12 point deduction. 

I like this approach - although it would need some form of cap, or a club could spend excessively in the prem knowing that they would be covered for the next couple of seasons. Bigger problem is that the people voting for it have nothing but their own interests in mind. 

Not sure that there is any obvious incentive for the PL to change things voluntarily, or where an external pressure to change comes from. Hoping that the government steps in seems a very long shot. 

[EmersonsKev]

On 05/05/2024 at 10:35, Robbored said:

Every Championship club that doesn’t receive them all see them as unfair and a huge financial benefit to the relegated clubs.

I posted awhile back about every PL club should have relegation clauses in their players contracts that apply the average Championship wages.That way these relegated clubs would have no financial bonus over other Championship clubs.

That way there’d be not need to have the PP system in place.

This policy wouldn’t affect the majority on the PL clubs.

So why not?

Never going to happen, the FA and the Premier league no interest in assisting football in general.  Premier league clubs would also need to vote for any changes, so anything that isn't in there interest will never get passed. 

 

We only have to see that changes to the FA Cup to show that The FA have no interest in football as a whole in this country. 

 

Lovely idea, but will never happen.  If anything, the intro of Premier League 2 and then close the shop is a more likely option.