Parachute Payments

[scottsdad]

There are plans afoot in England to examine these (https://www.bbc.co.uk/sport/football/articles/c9vn8r2zwyno). 

So - what about here in Scotland? We have a system where the teams relegated into the championship both get these payments - for 1 year if they are promoted and for 2 years if not. Should we keep these? Or look at changing the model. 

The key part of the article above is:

Quote

What does the bill say on parachute payments?

As with the original legislation, the regulator will have 'backstop powers' to mediate a financial settlement if the Premier League and English Football League (EFL) continue to fail to reach agreement on a new funding deal that would see more money make its way down the football pyramid.

But it will now be able to consider parachute payments when deciding how much money the Premier League should redistribute. They were excluded from the regulator's scope in the initial draft bill.

The EFL believes the payments - worth tens of millions of pounds to relegated clubs - distort competition and wants them scrapped so that it gets a greater share of the wealth generated by the top flight. But the Premier League insists the payments are essential to give club owners the confidence to invest.

The disagreement is among the reasons the two leagues have been unable to reach a new financial settlement worth an average £125m per year extra, despite years of negotiations and pressure from politicians.

In a statement, the Department of Culture Media and Sport (DCMS) said: "Excluding these payments would have significantly reduced the ability of the regulator to take a full view of financial stability and resilience across the football pyramid."

However, the parachute payments will be assessed "only if the regulator considers them to be of systemic risk to financial sustainability", and the bill will require that clubs "continue to be protected from the risks that come with relegation".

 

[Bairn in Exile]

Cheap parachutes for sale - no strings attached.

[HoBNob]

Imo, they're the one of the biggest issues with the Championship. It feels like the majority of the time the team getting relegated from the premiership will bounce back up within a couple of seasons, aided by this massive advantage. 

I find it ridiculous that they're a thing in the first place, why do we have a parachute payment for relegation from the Premier, but none for relegation from the Championship, League 1 or 2?

You also have the double dunt that teams getting relegated are also getting money from how teams do in Europe? So by the time the season kicks off they're at a massive financial advantage. Bin the parachute payment off, distribute it as prize money in the lower leagues. 

[Zen Archer (Raconteur)]

I think there is a parachute payment in place in the Pyramid.

[HoBNob]

3 minutes ago, Zen Archer (Raconteur) said:

I think there is a parachute payment in place in the Pyramid.

Aye there is, apologies on that. 

[HibeeJibee]

19 minutes ago, Zen Archer (Raconteur) said:

I think there is a parachute payment in place in the Pyramid.

 

15 minutes ago, HoBNob said:

Aye there is, apologies on that. 

There is: £40k in Year 1 (plus continued LC entry) and £20k in Year 2... fixed to be about 100% and 50% of bottom-end SPFL2 prizemoney, albeit as SPFL income has grown, eroded to more like 70% and 35%. (Initially they were paid by SFA as and when required not by SPFL: unsure if that still happens or was only for initial couple of years).

[Jeff Venom]

22 minutes ago, HoBNob said:

Imo, they're the one of the biggest issues with the Championship. It feels like the majority of the time the team getting relegated from the premiership will bounce back up within a couple of seasons, aided by this massive advantage. 

I find it ridiculous that they're a thing in the first place, why do we have a parachute payment for relegation from the Premier, but none for relegation from the Championship, League 1 or 2?

You also have the double dunt that teams getting relegated are also getting money from how teams do in Europe? So by the time the season kicks off they're at a massive financial advantage. Bin the parachute payment off, distribute it as prize money in the lower leagues. 

They do, and mainly since the SPFL took over the running of things. 

The SPL was literally a closed shop briefly, but movement between the two divisions was far more varied since reconstruction in 1994 til end of 2012-2013 season, compared with after when the SPFL took off (13-14) and now. It's something like 3 times between 1994 - 2013, to 7 times between then and now. I might be out a year but the story remains the same.

I'm sure renegotiated parachute payments have affected this. 

[Pie Of The Month]

The parachute payments being at the level they are (and the majority of gate money from the Premiership playoffs going direct to the SPFL to help fund them) was part of the deal which involved the playoffs being brought in. Not really sure we have the ability to tell the Premiership clubs the benefit to them if they go down is being taken away but we'll keep the good parts for us, they'd rightly tell us to f**k off. 

 

[LIVIFOREVER]

Off the top of my head Accies, Partick, and ICT didn't bounce back up, in fact they've all had relegations to the 3rd tier, so i think the massive financial advantage the parachute payment gives teams to get straight back up is a myth, and the teams that did go back up had income from other places to get them promoted. Hearts, Hibs, Utd, Killie, County etc, had investment from either owners or the size of their support to get them back up.

This is like most things concerning money, the teams not benefitting from the parachute payment will be all for scrapping it, the ones that are more likely to need it will want it to stay.

It's quite a drop in income in the 2nd tier, there would have to be some sort of study done to see if clubs could cope without a parachute payment, even with the payment it's a lot to deal with changing the structure a club had to operate with to compete in the Premiership, to what they can afford dropping down a tier. 

Edited Thursday at 14:11 by LIVIFOREVER

[eez-eh]

42 minutes ago, Pie Of The Month said:

The parachute payments being at the level they are (and the majority of gate money from the Premiership playoffs going direct to the SPFL to help fund them) was part of the deal which involved the playoffs being brought in. Not really sure we have the ability to tell the Premiership clubs the benefit to them if they go down is being taken away but we'll keep the good parts for us, they'd rightly tell us to f**k off. 

 

Are you ok with that though? Why should the Premiership teams need effectively bribed in order to have more than one lousy relegation spot?

30 minutes ago, LIVIFOREVER said:

Off the top of my head Accies, Partick, and ICT didn't bounce back up, in fact they've all had relegations to the 3rd tier, so i think the massive financial advantage the parachute payment gives teams to get straight back up is a myth, and the teams that did go back up had income from other places to get them promoted. Hearts, Hibs, Utd, Killie, County etc, had investment from either owners or the size of their support to get them back up.

This is like most things concerning money, the teams not benefitting from the parachute payment will be all for scrapping it, the ones that are more likely to need it will want it to stay.

It's quite a drop in income in the 2nd tier, there would have to be some sort of study done to see if clubs could cope without a parachute payment, even with the payment it's a lot to deal with changing the structure a club had to operate with to compete in the Premiership, to what they can afford dropping down a tier. 

Just because some teams hilariously mismanage the huge amount of extra funds they get does not mean it isn’t a huge advantage.

And if only there was some way A. to stop there being a huge gulf in prize money between divisions and B. for relegated clubs to cut their cloth accordingly.

[Bairnardo]

18 minutes ago, eez-eh said:

Are you ok with that though? Why should the Premiership teams need effectively bribed in order to have more than one lousy relegation spot?

Yeah, its about having a credible football product. Cant be on board with the idea that the big boys are somehow doing us a favour by allowing playoffs. The league as it stands would be f**king shite otherwise.

[Silvio Tattiescone]

1 hour ago, Bairnardo said:

Yeah, its about having a credible football product. Cant be on board with the idea that the big boys are somehow doing us a favour by allowing playoffs. The league as it stands would be f**king shite otherwise.

They probably think they're doing us a favour allowing a promotion spot 

[mrpaddyx]

2 hours ago, Jeff Venom said:

They do, and mainly since the SPFL took over the running of things. 

The SPL was literally a closed shop briefly, but movement between the two divisions was far more varied since reconstruction in 1994 til end of 2012-2013 season, compared with after when the SPFL took off (13-14) and now. It's something like 3 times between 1994 - 2013, to 7 times between then and now. I might be out a year but the story remains the same.

I'm sure renegotiated parachute payments have affected this. 

It still feels like a closed shop, only 7 clubs that are in the currently in the lower leagues have been in the top flight since 1994.

[HoBNob]

2 hours ago, LIVIFOREVER said:

Off the top of my head Accies, Partick, and ICT didn't bounce back up, in fact they've all had relegations to the 3rd tier, so i think the massive financial advantage the parachute payment gives teams to get straight back up is a myth, and the teams that did go back up had income from other places to get them promoted. Hearts, Hibs, Utd, Killie, County etc, had investment from either owners or the size of their support to get them back up.

This is like most things concerning money, the teams not benefitting from the parachute payment will be all for scrapping it, the ones that are more likely to need it will want it to stay.

It's quite a drop in income in the 2nd tier, there would have to be some sort of study done to see if clubs could cope without a parachute payment, even with the payment it's a lot to deal with changing the structure a club had to operate with to compete in the Premiership, to what they can afford dropping down a tier. 

Honestly doubt I could disagree more. 

How do three sides make a rip roaring c**t of it make it a myth, but all those sides that bounced up with the parachute payment don't verify it's existence? Since the playoffs were introduced Dundee x2, Dundee United, Kilmarnock, Hearts, Ross County, St Mirren, Hearts

The only sides as far I can tell that have been promoted without parachute payments are Dundee United, Livingston, Hibs and Rangers, and with Hibs and Rangers you had a freakish set of circumstances that I doubt you'll see recreated in our lifetime. The occurances are also drying up, Dundee United and then yourselves was a while ago. It isn't a healthy league structure where this is becoming the norm. 

As for your last paragraph I just find it laughable, if there's such a drop then why don't we try spread out the money more fairly so the drop isn't so severe? Why don't clubs in the Premier have clauses in place so they can cope? Why is the solution for clubs coming down, to give them a massive advantage to pop back up?  The drop from the Premier is Championship impossible but full time teams are left to go from the Championship to League One? Is that not also a drop in income? 

On the verge of hoping Falkirk win the league here so Livingston can suffer a few seasons down here so I can see what you reckon to the parachute payements then. 

[GMBairn]

3 hours ago, LIVIFOREVER said:

Off the top of my head Accies, Partick, and ICT didn't bounce back up, in fact they've all had relegations to the 3rd tier, so i think the massive financial advantage the parachute payment gives teams to get straight back up is a myth, and the teams that did go back up had income from other places to get them promoted. Hearts, Hibs, Utd, Killie, County etc, had investment from either owners or the size of their support to get them back up.

This is like most things concerning money, the teams not benefitting from the parachute payment will be all for scrapping it, the ones that are more likely to need it will want it to stay.

It's quite a drop in income in the 2nd tier, there would have to be some sort of study done to see if clubs could cope without a parachute payment, even with the payment it's a lot to deal with changing the structure a club had to operate with to compete in the Premiership, to what they can afford dropping down a tier. 

Given that teams outside the top flight get most of their money from ticket sales and that livi have some of the lowest home attendances in the championship if the parachute and European solidarity payments and much higher prize money don't give clubs an advantage how do you explain your ability to pay for one of the best squads in the division? 

[craigkillie]

2 hours ago, HoBNob said:

How do three sides make a rip roaring c**t of it make it a myth, but all those sides that bounced up with the parachute payment don't verify it's existence? Since the playoffs were introduced Dundee x2, Dundee United, Kilmarnock, Hearts, Ross County, St Mirren, Hearts

These would all be amongst the biggest clubs in the Championship and would have the biggest budgets regardless of the parachute payments.

 

5 hours ago, Jeff Venom said:

The SPL was literally a closed shop briefly, but movement between the two divisions was far more varied since reconstruction in 1994 til end of 2012-2013 season, compared with after when the SPFL took off (13-14) and now. It's something like 3 times between 1994 - 2013, to 7 times between then and now. I might be out a year but the story remains the same.

I'm sure renegotiated parachute payments have affected this. 

The financial gap between the Premiership and Championship is much smaller than the gap between the SPL and SFL was during that era. The top teams in the Championship get something like 10 times as much prize money now compared to the SFL era.

[Ray Patterson]

2 hours ago, craigkillie said:

The financial gap between the Premiership and Championship is much smaller than the gap between the SPL and SFL was during that era. The top teams in the Championship get something like 10 times as much prize money now compared to the SFL era.

Think it's even more now - Ross County won the First Division in 2011-12 and received £69,500 for their efforts - the winners of this year's Championship are set to pick up roughly £900,000 - or 2.25% of the total prize pot. In fact every SPFL member will be earning more than County did that season - Club 42 is set to receive about £70,000.

And that's before discussing the massive increases in League Cup Prize Money in recent years as well.

[HoBNob]

3 hours ago, craigkillie said:

These would all be amongst the biggest clubs in the Championship and would have the biggest budgets regardless of the parachute payments.

Cool, let's bin them off then. 

[RandomGuy.]

Is the argument from top flight clubs not that the decrease in income is so huge between divisions that clubs would be ruined if they didn't have them?

Feels like increasing prize money in the Championship, and reducing the parachute payment in terms of amount and how long you get it (2 years isn't needed), would help balance things.

[RAITHROVERS84]

15 hours ago, HoBNob said:

On the verge of hoping Falkirk win the league here so Livingston can suffer a few seasons down here so I can see what you reckon to the parachute payements then. 

I’d wager it very likely that if Livi doesn’t get up this season or next they’re in for a world of pain. 

It’s a credit to them they survived so long in the top flight and for me their natural level is beneath the level they’re currently at.