Parachute Payments

[Stuliasz]

The whole Ross McCormack transfer got me thinking a bit about parachute payments and I thought it was worth a separate discussion. My understanding is they are intended as a safeguard or buffer to help clubs which have been working on a different financial plain to survive the drop, not to give them a competitive advantage over the rest of the league. Therefore the amounts should only be high enough to help sustain a club but still at a level which forces those clubs to reduce the wage bill.

It is obvious from the past few seasons that the amounts distributed are so high that relegated clubs have little incentive to use this money as a buffer, and instead are able to dish out literally millions on NEW players and the wages that come with it. They are generally advantaged enough already with the superior quality players they should have (not always the case I know), so to be able to financially outmuscle the league's existing teams is an additional advantage.

Could a system work where transfers are only allowed based on income generated through wage reductions and players sold? Maybe clubs could be made to apply for parachute payments in circumstances where they are financially under threat because of relegation, with the finances reviewed at the time to distribute to them a more appropriate amount.

I don't know what the answer is and none of these solutions would probably work, but the current system does appear to be massively flawed. Perhaps the problem is wider and the whole financial structure of English football is to blame. Gambling on promotion is often seen as worth the risk of going bust because of the huge income that goes with Premier League football.

[Guest MattP]

It was a good idea, but like FFP has now been abused to the point where it's actually becoming the opposite of it's intention.

The amount is the problem, a helping hand has become 90million quid, which just goes to show you he absolutely obscene spending of football clubs and just how far beyond their means they are going to try and 'survive' in the top flight.

You see it with people all the time now. Someone spends an absolutely ridiculous amount on someone and idiots are queuing up to tell us that 'it's worth it if he gets them up' - which in reality isn't true as no one player should be able to make that difference, you saw with us and Burnley last year who both went up with sides built on ethic and young talent.

What the solution is I have no idea, the Premier League is something like 2billion in debt. They just keep getting a bigger shovel whenever the TV rights come up for sale, when it does come crashing down it's going to be worth watching.

[Trav Le Bleu]

MattP in absolutely obscene spending shocker.

Sorry, just thought it was ironic

[Guest Col city fan]

It was a good idea, but like FFP has now been abused to the point where it's actually becoming the opposite of it's intention.

The amount is the problem, a helping hand has become 90million quid, which just goes to show you he absolutely obscene spending of football clubs and just how far beyond their means they are going to try and 'survive' in the top flight.

You see it with people all the time now. Someone spends an absolutely ridiculous amount on someone and idiots are queuing up to tell us that 'it's worth it if he gets them up' - which in reality isn't true as no one player should be able to make that difference, you saw with us and Burnley last year who both went up with sides built on ethic and young talent.

What the solution is I have no idea, the Premier League is something like 2billion in debt. They just keep getting a bigger shovel whenever the TV rights come up for sale, when it does come crashing down it's going to be worth watching.

Says the man who spent what? A grand on a shot in a Vegas Casino.

You do know Matt, that the side 'Pearson built' was actually started by Sven. Nugent, Kasper, Konch.. None of them exactly 'young talent'. In fact, many would argue that the final catalyst to success this season was actually the introduction of 'old talent' (or 'tubby talent'). In addition, some of the players Pearson had at his disposal this time round, were there before he left.

He turned it around, but not quite in the romantic way I think you are suggesting. Ethic..for sure, absolutely. Every Pearson side has that.

[Guest MattP]

Says the man who spent what? A grand on a shot in a Vegas Casino.

You do know Matt, that the side 'Pearson built' was actually started by Sven. Nugent, Kasper, Konch.. None of them exactly 'young talent'. In fact, many would argue that the final catalyst to success this season was actually the introduction of 'old talent' (or 'tubby talent'). In addition, some of the players Pearson had at his disposal this time round, were there before he left.

He turned it around, but not quite in the romantic way I think you are suggesting. Ethic..for sure, absolutely. Every Pearson side has that.

We all do silly things.

Sven signed 42 players so you would expect a couple to have been decent It took a real manager to mould a team around them though, let them build and develop and then see it off with a bit of experience added for the season after.

Our team is built on young talent, make no mistake about that. Drinks, James, RDL, Vardy, Mahrez, Knocky will be the base of our squad for years hopefully.

[Guest Col city fan]

We all do silly things.

Sven signed 42 players so you would expect a couple to have been decent It took a real manager to mould a team around them though, let them build and develop and then see it off with a bit of experience added for the season after.

Our team is built on young talent, make no mistake about that. Drinks, James, RDL, Vardy, Mahrez, Knocky will be the base of our squad for years hopefully.

But I don't think it works like that mate. It never really did, but certainly not now. Say Drinkwater (possibly our most promising younger player for years) has a great season in the next campaign? It would be likely that one of the big boys come knocking on City's door with an huge sum and the promise of greater riches. We'd probably sell him Matt, don't you think?

Then he'd go to Man City, sit on the bench for a season, get paid a fortune and finally leave, going to Sunderland or West Brom et al. This is the current reality is it not? I hope I'm wrong and your panacea of the long term development of a together group of youths comes to fruition. That would be nice.

[Captain...]

The fair thing to do would be instead of just giving clubs money would be to offset wages agreed in the premiership against a parachute pot.

For example if we assume that wages are double in the prem, then any contract signed in the prem, on relegation the premier league will subsidise the remainder of the contracts wages by 50%.

This would obviously be abused in any way possible and clubs would be more likely to offer big contracts without relegation clauses, but it is actually tackling the issue rather than just handing out money.

The other option is just making a 50% pay cut mandatory in all premiership contracts on relegation, whilst also triggering a standard release clause/buy out clause on relegation, so rather than clubs having to negotiate a relegation clause for every contract, or perceived bigger clubs getting caught out by a shock relegation, it is just a mandatory clause in all contracts.

The better solution though would be to ensure there is a greater distribution of wealth through out the football league, but we all know that will never happen...

[ozleicester]

hmm sounds almost like a socialist league structure... a better distribution of wealth. Now if we can just do that with the rest of society