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Apr 23, 2010

Hull City "receive £10m of parachute payments"

Concern over Hull City's finances are set to intensify after the Hull Daily Mail reported that the club have already received £10 million of their post-relegation first-season parachute payments.

• Pearson hits out at Duffen

On Wednesday, in his programme notes for the Premier League defeat at home to Aston Villa, chairman Adam Pearson slammed the free-spending ways of his predecessor, Paul Duffen, and warned the club faced an uncertain future if they failed to remain in the Premier League.

The Tigers could effectively be relegated if they lose at home to Sunderland on Saturday, and West Ham pick up three points against Wigan Athletic at Upton Park, due to their vastly inferior goal difference.

Hull are due £11.2 million as a first-season parachute payment following relegation to the Championship, a figure which may rise to £16 million if new plans are approved at the Premier League's AGM in June, but it is claimed that the club have already received most of that figure to stave off the threat of financial meltdown.

No-one at the club was making any comment on the reports in Hull's local newspaper.

The club's wage bill stands at £38.9 million, which is unsustainable in the Championship, with reports of the overall debt ranging from £25-35 million. It is thought the actual debt is £25 million, with the additional figure being the advanced parachute payment which, if they stay up, will have to be repaid.

If, as seems inevitable, Hull are relegated then their ability to trade out of the current situation would be hampered by the fact that they have already been paid the parachute payment which would normally come through in August. The East Yorkshire club will need to be completely restructured financially and some form of Company Voluntary Arrangement (CVA), or administration, would surely be unavoidable.

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