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What Parachute Payment Changes Mean To The Football League

This just about sums things up…

If you have seen the news recently regarding parachute payments, you may have also heard that many clubs originally were against the proposal, mainly those who were in league’s one and two. It could appear that the football league has somewhat been bullied into accepting this offer, and the implications of such a deal could create a number of problems for teams in the football league by creating a much larger gap between the leagues and also giving a lot of teams an easy way out. You may have read something I wrote recently regarding the situation at future Championship dwellers Portsmouth and their money problems, and although it would appear that the Premiership is attempting to follow the trend of money in football, it would appear they’re almost encouranging teams to build up more risk and spend more money to have a shot at the Premiership, when in truth they should be going in the opposite direction and making it so that clubs don’t have to spend ridiculous amounts of money in order to compete in leagues once they are promoted. This season should have been a wake up call, but instead it hasn’t.

You may have heard lately claims that Newcastle United have no desire to spend in the summer after a confusing statement was released by the club’s board, and much of the media have reported it in this way after reading the statement ‘there is no plan for new capital outlay’. The statement is extremely hard to read and there is an altered version here from George Caulkin which may be a better read for you, but what that statement supposedley means is that Newcastle do not plan on spending money they don’t have – e.g: no paying in installments, such has been the way of football in the past several decades. And this is the way football should be, because you see teams like West Ham and Hull in the Premiership who have spent ridiculous amounts of money and then realised that they don’t have those funds, and what success did they gain? They both fought a relegation battle and one got relegated. There is pressure from the fans today to spend money and bring players in, but this has been created due to the nature and culture of the clubs that has been created over the past few years and now there are a number of what would be considered badly managed businesses. Man Utd and Liverpool have a ridiculous amount of debt, now Liverpool aren’t in the Champions League next season, it would appear that things can only get worse. Newcastle are a club that are famous for spending vast amounts of sums in the Premiership, and before Ashley took over they were destined to go into administration, in one facebook group dedicated to rubbish Premiership players, I believe one person described Newcastle as ‘the king’s of rubbish Premiership players’. It is good to see that there is a change in emphasis, but there is still a fear that the gap between the two leagues due to the money being spent by a number of sides could see them relegated once again, as there is too much pressure to spend money.

But the best example I can give you is West Bromich Albion, who have again been promoted this season. They’ve been promoted and relegated for a number of seasons now, and they’ve never really spent a massive amount of money other clubs have once they have been promoted, with most of the same board in place I don’t expect them to do so this season either. But why is it fair that West Brom who are a club that spend their money correctly and have a manageable debt can’t compete, against a load of clubs that are spending money they don’t have in chase of an unrealistic dream, and the thing is, the majority of these teams are eventually crumbling. Sheffield Wednesday chairman Lee Strafford made a point of this before his team was relegated at the hands of Crystal Palace, and although he didn’t exactly say that they should be relegated as the Guardian quoted, he did make a point of there needing to be greater punishments for clubs and I agree with this only to scare them into not taking up unmanageable risk and if they do, they will just face the consequences.

Now that the parachute payments have doubled, it means teams that are relegated have a greater chance to establish themselves in the league, thus diminishing a league one sides potential at competing in the Championship. It is also encouranging clubs to spend ridiculous amounts of money they don’t have, safe in the knowledge that they will get that money. The biggest danger is that all of a sudden the English leagues get split into two, and although there will always be a gap between the Championship and the Premiership, a huge gap between league one and the Championship could spell disaster for the English game. Imagine if you supported a team in league one or league two, what would your dream be for your club? I bet it would be to some day see your side play in the top flight of English football, but these changes could make that unlikely. The greatest possibility of achieving this would be guess what? Spending loads of money the club does not have. I’m not saying don’t give teams parachute payments, they’re necessary for the game and they were at the right level before this game, but the Premier League’s obsession with being ‘the best league in the world’ is starting to hurt English football a bit now. At the least, clubs should be encouraged not to spent wild amounts of money they don’t have, if anything for the fans who will ultimately just suffer in the end. Germany is a prime example of how finances should be controlled in football, but I fear that this approach will never be taken in this country unless something terrible happens in order to force the hierarchy. This unfortantley is bad news for much of the English game.

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  1. Shakira

    May 12, 2010 at 1:24 am

    Why doesn’t the EPL just tell the FL which 6 teams it wants to go up and each year just rotate them and any other team that has the gall to break into the top 6 should be banned from being promoted. This is more harmful to the FL then they could imagine.

    • Rob McCluskey

      May 12, 2010 at 7:09 am

      it encourages high spending and it will create a much larger divide, I have a feeling that the league one and two sides were bullied into the decision somewhat. There solution to the current money problems in football is to throw more money at these sides, when in truth it should be regulating or atleast making great punishments for lack of financial control

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