The full force of the Premier League was in clear view last year when the Football League was forced into accepting a new financial agreement. The League One and Two clubs had initially rejected the proposals over concerns that it would create a second Premier League in all but name. However there were fears at the time that if they not did agree, the Championship would form a breakaway division. This made it almost impossible to reject a deal when the Premier League made them a take it or leave offer.

This new deal has reduced the amount paid to Football League clubs from £88 million to £65 million. As part of this agreement, clubs relegated from the Premier League will now receive £48 million in parachute payments over four years instead of £16 million a year for two years as they received previously.

Looking back, the concerns of the lower league clubs at the time were understandable. Already this season we have witnessed the financial clout of the likes of Leicester City who have spent vast amounts of money in comparison to some of the smaller teams in the teams like Coventry and Watford, who both have financial problems.

The fact that a team relegated from the Premier League now receives £48 million while a team going in the opposite direction to League One will actually lose £3.7 million shows the sort of disparity that exists between the two leagues. This makes it extremely difficult for the relegated team to bounce straight back unless they actually have the financial aptitude as Norwich and Leicester showed. It will be even harder for the smaller teams to get back into the Championship but much easier for teams coming down to get out it.

The difference in central payments in the Championship and League One is already substantial. The television and solidarity payments that come into the football league are split 80 per cent Championship, 12 per cent League One and eight per cent League Two. Although the money the other two leagues receive has increased, it is nothing in comparison with that of the Championship.

Every year, we hear about clubs spending beyond their means to remain in or try to reach the promise land of the Premier League before seeing them go into financial trouble when this does not materialise. What is the Premier League doing to prevent this situation apart from giving them even more of an incentive to spend with the fall-back of parachute payments?


The biggest danger is that a divide takes place – leaving the clubs outside of the top two divisions isolated in no man’s land, taking away the dream of one day playing in Premier League. I am not suggesting that parachute payments shouldn’t be given to relegated teams – they are needed to ensure a smooth transition to the Championship. But with this sudden increase, these teams will now benefit for four years. How is this fair on other teams in the league and those outside it? The fixation with making the Premier League the best in the world is just encouraging teams to spend more money while reducing the chances of the smaller teams ever reaching the Premier League.

How long will it be until there are two separate tiers of English football, where promotion and relegation does not exist? We seem to be going more and more towards the American example of the franchise system where Television and money completely dominate the game.

It would seem that Premier League Two is not too far off.

This could lead to the death of the traditional English football clubs and the game outside of the top two divisions. The loyal fans would probably remain at these clubs but would the money still come in from the richer elite leagues? If this was divide was to take place, the long-term future of lower league football clubs outside the top two divisions would be very bleak indeed.

Follow me on twitter @aidanmccartney for more thoughts and views about the beautiful game.


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  • whumylo
    3 years ago

    Considering a club that gets relegated from the premier league loses 40 million there is no substance in this article league one and two clubs getting more and premier league wages, losing players on the cheap as you’re now a second tier club, if you get relegated from championship league one or league two you may lose players but nothing like premier league to championship, the summer transfer window has seen 26 players leave West Ham with 12 coming in I could argue we have a better team now than last year but if a championship – league two club lost 26 players I doubt they’d exist the next year, its a reality and its nothing like America – in America players out of Contract go into a draft the team that finishes bottom gets first pick from the draft for example west ham finish bottom rooney is out of contract west ham have first pick, so I think that case about coming like america is false as we don’t have Ad breaks when there is a free kick, you just need to look at the financial reality of football top clubs need the money when you see Man city spending hundreds of millions then wolves lucky to spend 20 million shows the difference

    Reply
  • cb
    3 years ago

    If you do away with parachute ayments then you can pretty mmuch forget two things

    1) No team relagated from the premier league will likely ever play there again due to the huge crippling losses involved, many more teams will go out of business

    2) No team promoted from the Championship will ever stay up as their board will not be willing to spend much money in case they go back down

    It’s not the Parachuite payments that are giving West Ham an advantage, it’s the fact they are lucky enough to have two extremely rich owners who are stumping up 4 million a month to cover losses and ensure that even if they don’t go up the club will be in no financial problems

    Reply
  • Structured settlement sales professionals
    3 years ago

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    3 years ago

    The Special Investigative Unit (SIU)is a part of every insurance company in the US, but when the insurance adjuster tells you that he or she is referring your damages or personal injury claim to SIU, what exactly does that mean? It means that something in your claim has raised an alert to the insurance company that fraud might be involved. This might be an alert against you or another person involved in the claim.

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    3 years ago

    With four young children, a wife with a modest income, a mortgage and some business debt, Mike Rowe had an obvious need for life insurance. But the family budget was stretched thin, and Mike didn’t think he could afford it.

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    3 years ago

    When Jackie Blanchard’s husband died at a young age, with only enough life insurance to pay for his funeral, Jackie vowed that her young daughters, Ebony and Shanna, would be financially secure if anything ever happened to her. To keep this promise, Jackie immediately scheduled an appointment with insurance agent Virginia Acosta, FICF. “She said she wanted the best insurance she could buy, and I made sure her family would be protected,” says Virginia.

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  • lump sum annuity settlement
    3 years ago

    Sadly, Missy Junk’s first encounter with life insurance came at age 14 when it paid her father’s funeral expenses. Her next encounter came all too quickly. A year and a half later her mother was diagnosed with cancer and died soon afterward. “You can’t take for granted tomorrow’s going to come; you have to make sure the future is safe,” says Missy, now 26 and wise beyond her years.

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    Today, Missy teaches second grade in West Bend, Wisc., and is preparing for a life together with Ryan, her high school sweetheart. The insurance benefits are in a trust fund and are paid out periodically as Missy gets older. They helped her with educational expenses and living costs while she was in college, and recently they covered the down payment for a condo. “I own a place and have a car, a great job and a great future husband,” she says. “You just hope for it someday, and actually it has happened. It makes me happy.” That’s exactly as Missy’s parents would have wanted it.

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    3 years ago

    A medical student interpreting her own ER bill figures out insurance claim codes and errors—but then what?

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    3 years ago

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    3 years ago

    My beautiful 17-year-old daughter, Nataline, died last December after being denied twice by our family’s insurance company, CIGNA, for a liver transplant that was recommended by a panel of doctors at UCLA Medical Center,” recalls Hilary Sakozi.

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