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Apr 18, 2013

Parachute payments defended

The Premier League has moved to defend increased parachute payments for relegated clubs after details emerged of the sums to be paid over the next three seasons.

With the new UK television deal swelling Premier League pockets by 70% from this summer, parachute payments are automatically increased.

Blackburn Rovers, Bolton Wanderers and Wolverhampton Wanderers are in the first year of their parachute payments, which stood at a total of £48 million over four seasons made up of £16 million in the first two years and £8 million in the final two.

That figure will rise from next season, meaning Queens Park Rangers and Reading, who seem certain for the drop, will receive £59 million - an increase of 23%. Relegated clubs will receive £23million in the first year, £18 million in the second and £9 million in years three and four.

That means in season one there is a 43.75% increase in monies paid, and 12.5% in years two to four.

A Premier League spokesman said: "Parachute payments are based on a formula that is part of the Premier League's constitution and have proven a necessary mechanism for clubs both coming up and down over the years.

"There is no evidence to suggest they prevent non-parachute payment receiving clubs getting promoted from the Championship - the contrary in fact. Over the past 15 seasons two-thirds of clubs promoted to the Premier League did so without parachute payments.''

Only one of last season's relegated clubs, Bolton, stand any chance of an instant return to the top flight while Blackburn and Wolves both face a fight just to stay in the Championship.

Premier League solidarity payments attempt to pass some of the wealth down the divisions, but the sums paid are a mere fraction of the parachute payments.

The proposal is that from next season Championship clubs will receive £2.3 million (an increase of £116,000), League One clubs £360,000 (£22,000) and League Two £240,000 (£12,000).

The combined increase in payments to Football League clubs is £3.6m over three seasons and follows the new Premier League TV deal which brings in an extra £1.236bn. The rise is an average of around 5.7% for Football League clubs, compared to 70% for Premier League sides.

Championship clubs receive more in solidarity payments than they do for their own television deal, with each club receiving a basic fee of around £1.8 million, though there are then further payments each time a game is broadcast. It means clubs will receive just over £4 million next season, while relegated Premier League teams will already have £23 million from the first instalment of their parachute payments.

The meagre rise for the Football League has been met with an angry reaction from some clubs, with League One outfit Preston North End issuing a statement earlier this month.

It read: "Let no one doubt that the Premier League do not give a damn about the Football League. It is now one of those pivotal moments in the history of the game. Now is the time to stand up and be counted.

"To win the play-off final to the Premier League guarantees circa £120 million and yet a Championship club who do not receive parachute payments receive circa £4 million. This is financial suicide.

"League One and League Two clubs don't stand a chance of surviving, let alone competing, without a benefactor. Owners/directors of Football League clubs are continually being reminded of their responsibilities to run their clubs in a financially responsible way.

"At a time when there is more money coming into football than ever before there appears to be less and less of the financial cake being distributed to the Football League.

"We are now faced with yet another devastating widening of the gap in terms of cash being given to relegated Premier League clubs - an increase of between 40.6% and 47.5% per season [sic].

"A mixture of the Premier League and the Football League's lack of ability to exploit the Football League brand is driving a wedge between the football haves and have nots that will see the disintegration of the Football League sooner rather than later.

"Our board representatives now need to rise to the occasion and use every method to get a better financial outcome for clubs."

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