With Wigan, Reading and QPR all dropping down into our division, not only do they bring the class of a lot of the players they had in the Premier League, but they come down with substantial amounts of money. Why is this? Well I will hope to explain to you about the importance of parachute payments.
For you that don’t know what parachute payments are, I will give you an example. As Reading got relegated from the Premier League last season, the Premier League will pay Reading millions to help keep afloat whilst adjusting to the Championship.
Parachute payments are changing, and as I am an Ipswich fan, it is not for the good. In the 2010 season teams that got relegated each got £32,000,00 for 2 years. Which in my opinion is a lot more money than they should get. They will have a few class players who they purchased when in the top flight, so why can’t they sell them and bring in players on lower wages?
After 2010 though the payments started to rise! The following season, teams relegated from the Premier League would receive £48,000,000 over a 4 year period. That’s a rise of £16,000,000. But it gets worse. Now the Premier League have decided to pay teams £59,000,000 in a 4 year period. I am unsure on the figure they will receive for the first year, but if you average it out over the 4 years, that’s £14,750,000.
Obviously teams won’t spend all of that money, but they will probably put 40-50% towards the transfer budget. That would be about £6/7,000,000. if you think that every Championship side could get that money, then I think it wouldn’t matter at all. In my opinion there are quite a few managers in the league that can spend that money more wiser than the current 3 managers in charge of the 3 relegated sides.
Parachute payments have helped Wolves a lot this year. They still have Ebanks-Blake, Kevin Doyle and Bakary Sako, all players that could be in top 6 Championship sides or bottom half Premier League teams. How are they affording to keep these players? Yes, it is all down to the parachute payments. If I had to guess, I would say all 3 players are on 20-30k per week.
Going back to talking things Championship based though, with QPR having a good manager in Redknapp, Reading having a experienced man in Adkins, I feel these two will be amongst the top 6. So with these teams taking them spots, that leaves 4 places available. Ever since around the 2010/2011 the Championship has become such a tough league, that this year, there are around 12 teams that have the belief they can make it into the promised land.
Do parachute payments need to be significantly reduced? As you would of gathered I certainly think so, and the payments should be shortened to 1-2 years.