With the new massive incomes assured by the domestic and international television rights deal that go into effect next season the impact of remaining in the Premier League is greater than ever. The parachute payments for teams that enter and leave the Premier League will impact the lower leagues as well.
Previously when teams were relegated from the Premier League, they would receive what are called parachute payments over the 4 years following their run in the top flight. These payments were split out over 4 seasons, but new rules mean that these payments are now divided over 3 seasons. With the massive incomes at stake, the relegation battle in the Premier League is more important than ever for both a clubs’ stature and bottom line.
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So, for example, should the current teams in the relegation places (Newcastle United, Sunderland, and Aston Villa) go down to the Championship, they would receive payments of at least £64M (but most likely a lot more) split over the following 3 seasons, if they remain in the lower leagues. Obviously if/when they return to the Premier League, they would simply receive the normal league payments that are split throughout the league.
Teams that operate as ‘yo-yo’ clubs, bouncing between the Premier League and Championship year by year will be affected by the influx in TV money, and the league has addressed this as well. If a club reaches the Premier League only to fall back to the Championship the following season, they would receive the parachute payments for just 2 years rather than the standard 3.
"From the 2016/17 season, relegated clubs will receive 55 per cent of the equal share of broadcast revenue paid to Premier League clubs in the first year after relegation, 45 per cent the following year and 20 per cent in year three. Clubs relegated after a single season will receive 55 per cent and 45 per cent over two seasons with the third payment eliminated entirely.- per SkySports"
Based on the roughly £64M payment divided over the seasons, the current plan would see clubs netting 35.2M in year 1, 28.8M in year 2, and 12.8M in year 3 following relegation. By comparison, the money teams in the lower leagues of England will get from the new TV deal (without parachute payments) works out as follows:
Championship: £2.3m a season
League One: £360,000 a season
League Two: £240,000 a season
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The extra money from parachute payments significantly dwarfs these current numbers, meaning even 1 season in the Premier League can completely change the financial shape of English clubs. Therefore, the pressure to avoid relegation and gain promotion has become even more important.