Parachute payments

[Fernhurst]

Anyone have the details?

How much did we get over how may seasons?

With the increases in Tv revenues, how much will the teams coming down this season be entitled too??

Thanks in advance

[MJG]

We were paid £24m last season
£19.2m this year
£9.6m in 16/17
and another £9.6m in the final year.

If a team goes up it does not get paid for any remaining seasons.

As you can see we are already £5m down on income before a ticket is sold or ball is kicked.

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[MJG]

The new regulations for the 2015/16 season mean that Premier League clubs who are relegated at the end of the 2015/16 season will receive starting in the 2016/17 season:

•             parachute payments over three, not four, seasons; but

•             if a promoted club is then relegated in its first season, it will only be entitled to two years' worth of parachute payments. For example, if recently promoted clubs Bournemouth, Watford or Norwich are relegated at the end of this 2015/16 season, they will receive only two parachute payments.

Until the final new cumulative global Premier League broadcasting figures are known, it is difficult to speculate as to the value of the new parachute payments to be distributed to relegated clubs come the following 2016/17 season.
Nonetheless, the excellent Swiss Ramble (albeit before the new parachute payment formula was announced by the Premier League)estimated that the bottom placed club in the 2016/17 season could earn around £92m per season in the Premier League with parachute payments for three years totalling £86m .
It means the 2015/16 play-off final could be worth a staggering £178m to the winner.



Practical Example

Watford are promoted and participate in the Premier League in the 2015-16 season. Unfortunately, they are relegated at the end of the season. For the 2016-17 season they compete in the Football League Championship. They will receive the first of two parachute payments following relegation. In year one, the club receives 55% of the equal share of broadcast revenue paid to Premier League clubs and in year two, 45% of the equal share of broadcast revenue paid to Premier League clubs. Based on the equal share figures in the 2014/15 season being almost £48m and the likely uplift from the new broadcasting deal, the club could expect to receive a similar amount to Burnley, QPR and Hull will receive (£60m+) but over a two year period[1].

Similarly, if Swansea for example, were relegated at the end of the 2015-16 season, they would receive the first of three parachute payments. In year one, the club receives 55% of the equal share of broadcast revenue paid to Premier League clubs and in year two, 45% of the equal share and in year three 20% which could equal around £70m+ over three years.

 

 

[1] This figure may well be at odds with the above Swiss Ramble numbers due to the new calculation methods used by the Premier League. Additionally, the final figures cannot be verified until the equal share figures for the 2016/17 season are communicated by the Premier League.

Written by Daniel Geey



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[Fernhurst]

Absolutely excellent, as always MJG.

Thank you.

[Neil D]

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