Points Deduction AGAIN

[Winston Biscuit]

Can people stop being nobs about this, making our fan base look like every other nobby football fan base out there?

[Sutekh]

Feels like the fix for the financial mess that is the Championship is for there to be a big rethink on the distribution of money so the Premier League gets less and the EFL gets more, thus allowing parachute payments to be stopped at the same time.

Ergo it will never happen.

They’ve ruined the championship. Prem league is only reasonably interesting as a number of teams have a managed to break through the norm - Brighton, Brentford, Fulham - have all been excellent, and to a lesser extent Arsenal

Honestly think that has as much to do with it as Readings own failings. The league is shit, predictable, doped by parachute payments and full of dodgy owners

Parachute Payments, per se, aren't a bad thing, however the rate is insane due to it being directly linked to Premier League broadcasting revenue.

At present, I believe clubs get 55% of the basic Premier League broadcasting payment (the basic Premier League broadcasting payments relate to the parts of the TV deal which is distributed equally between clubs: half of the domestic TV deal and all of the international TV deal) in the first season, 45% in the second season and 20% in the third season (if the club spent two or more consecutive seasons in the Premier League prior to relegation).

As broadcasting revenue continues to increase, especially the international revenue, the parachute payments have ballooned - especially when the Football League TV deal has mostly stagnated. The Football League TV deal is ~£23.8m per season total (covering all three leagues, play-offs, League Cup and League Trophy).

Especially in an era of FFP (the helpfulness of FFP itself could be debated), clubs cannot compete financially if they don't have these parachute payments without getting sanctioned by the League. I believe the parachute payments to clubs are greater than any current Championship club's 'organic' revenue (non-broadcasting); the parachute payments are ~£45m in the first season. Leeds would've had around ~£48m in 'organic' revenue in their 2019-20 promotion season had Covid not come into play - no other club was within £15m of that.

There are parachute payments between the Football League divisions. You don't hear about them due to them being a more reasonable payment - 11.1% of the basic Championship payment for clubs relegated to League One, 12.6% of the basic League One payment for clubs relegated to League Two and 100% of the basic League Two payment in season one and 50% in season two for clubs relegated to the National League. I believe that equates to around £280,000 for a club relegated from the Championship.

Of course, a much more even distribution from the Premier League to the lower leagues would allow for parachute payments for relegated Premier League clubs to be reduced heavily reduced, or even removed.

Perhaps the league’s FFP rules on the relegated clubs should be more stringent for the 1/2/3 years after their relegation so that right from their return to the FL they can’t just carry on playing out zillions for the playing cream of the FL, foreign non-entities and their PL “has beens” and so encourage reducing their wage bills and getting shot of players asap.

[Pepe the Horseman]

Can people stop being nobs about this, making our fan base look like every other nobby football fan base out there?

Takes one to know one.

[Elm Park Kid]

The core principle behind parachute payments is that without them, there would be an even bigger gap between the big 6 and rest of the PL. That's because every club would have to budget on the basis of the possibility of relegation and the loss of 80% of their revenue. It's impossible to have a £80m a year wage bill in the PL if your income might fall to £20m the following - There's no way of guaranteeing that you can sell your higher wage players, and players simply don't like signing contracts with relegation clauses.

PL clubs would argue that even £45m is barely enough to reflect the fall in income and the difficulty of lowering wage bills when relegated. You look at how much long it's taken Reading to get their wages down, and that was only with Championship wage levels. Like, the average salary of a player at West Ham right now is about £3m a year - if they get relegated then under FFP rules they would struggle to field even 11 players with only Championship revenue.

I agree that we should be looking at a new system. One that evens out PL/Championship incomes a bit, mandates relegation release clauses and 'buys out' player contracts to get them off the clubs books. But lets not pretend these are easy things to do.

[Sutekh]

The core principle behind parachute payments is that without them, there would be an even bigger gap between the big 6 and rest of the PL. That's because every club would have to budget on the basis of the possibility of relegation and the loss of 80% of their revenue. It's impossible to have a £80m a year wage bill in the PL if your income might fall to £20m the following - There's no way of guaranteeing that you can sell your higher wage players, and players simply don't like signing contracts with relegation clauses.

PL clubs would argue that even £45m is barely enough to reflect the fall in income and the difficulty of lowering wage bills when relegated. You look at how much long it's taken Reading to get their wages down, and that was only with Championship wage levels. Like, the average salary of a player at West Ham right now is about £3m a year - if they get relegated then under FFP rules they would struggle to field even 11 players with only Championship revenue.

I agree that we should be looking at a new system. One that evens out PL/Championship incomes a bit, mandates relegation release clauses and 'buys out' player contracts to get them off the clubs books. But lets not pretend these are easy things to do.

And enforces that EVERY SINGLE player contract at EVERY SINGLE FL and PL club has wage reduction on relegation clauses included.

[Elm Park Kid]

I agree that some kind of mandatory, universal relegation clause system makes sense. But, the extent of the wage reduction would need to be huge for it to work. Like - probably 80% reduction in wages.

The argument against it is that it makes it much harder for smaller clubs who are at risk of relegation to sign players. Say you get to January and find yourself in the relegation zone - it's going to be a lot more difficult to go out and buy that striker you need to get out of trouble if they are forced to accept a relegation clause meaning their salary could be massively cut in 6 months time.

[Snowflake Royal]

The reason for parachute payments was nothing to do with the big 6, it's because competing to not be in the bottom 3 and failing led to being crippled on relegation even with a firesale. And the risk of clubs ceasing to be ss a result. And parachute payments were the easy sticking plaster compared to fixing football's finances.

Most of the PL can't even remotely compete with the big 6 anyway.

[Winston Biscuit]

Fun fact - Notts County & Luton are the only 2 clubs to have never played in the Premier League but still received parachute payments

[Elm Park Kid]

The reason for parachute payments was nothing to do with the big 6, it's because competing to not be in the bottom 3 and failing led to being crippled on relegation even with a firesale. And the risk of clubs ceasing to be ss a result. And parachute payments were the easy sticking plaster compared to fixing football's finances.

Most of the PL can't even remotely compete with the big 6 anyway.

But that is, in around about way, about protecting the PL as a remotely competitive league. The top 6 don't want the rest of the league having to be conservative in their purchases/wages as it would become a procession. They like maintaining the status quo where each game is still a genuine competition, whilst their overall finishing positions are fairly secure.

[Snowflake Royal]

The FL can't have that many compliance investigators, so I wonder if our stuff got shelved for a bit to deal with Wigan and start prepping for Huddersfield's potential Administration because they were new issues and ours was historic.

[From Despair To Where?]

Not a lot to investigate with Huddersfield, they're either in administration or not and that's not something assessed by the FL. They just apply the sanction.

Likewise Wigan, there's a clear breach.

I reckon with is its either marginal and there's a lot of legal shizzle being thrown back and forth, hence the silence or the original report was based on someone putting 2 and 2 together and getting it wrong.

What concerns me is there's absolutely no consistency in the reports of what the breach is regarding. If its historical, it should be clear cut. If its based on the submitted accounts, we were doing everything with FL approval.

If we've overspent, then there's a case for making an adjustment for rising costs and that should be applied to every club, either by adjusting the losses down or increasing the threshold for losses. With inflation at 10% every club is going to see an increase in costs. Would make sense to have some element of the considered costs index linked.

[Brogue]

where the fcuk is Mark Bowen in all this, when was the last time he did an interview about anything? He said one of the things he was going to focus on was communication with the fans.

[From Despair To Where?]

Personally I dont think its his or Ince's responsibility to be club spokesman on this situation.

Problem is, until there's something tangible to report, the club and the EFL are going to stonewall us, regardless.

[Hendo]

Would also imagine they've been advised by lawyers to keep quiet while everything is going on.

[Hound]

Yep the club have communicated out as much as I expect they can, and tbf they did it the day it all blew up

Can’t have Bowen or ince coming out and saying a load based on rumour etc

Expect it is a debated case. Prob something marginal

Good point on inflation above btw, obvs energy costs will have sky rocketed and expect the whole set up is quite energy hungry

[From Despair To Where?]

I assume wages are fixed costs but yeah, energy and even stuff like hospitality is going to be significantly higher. You could increase the price charged for hospitality packages but I presume these are fixed at the start of the season.

I've seen various figures for the cost of running a stadium but the general ballpark is that the matchday electricity bill will have increased by about £0.5m in the past year just through priced rises.

[morganb]

Never mind where's Mark Bowen - where's the bloke from the Daily Mail? You can't go around breaking a story weeks ago then going totally silent on it

[blythspartan]

I want the EFL to oxf*rd off now. We’ve been punished enough. Maybe not in terms of a points deduction but we’ve been under a transfer embargo for 3 seasons now and all of that has probably taken 2k off the turnstiles, plus prevented us offering longer term deals to players we could have gotten a fee for.

We have been badly run but at least we’ve been in open dialogue with the EFL for years now and they’ve scrutinised every player we’ve signed this season. It’s not helpful to the fans or players having this hanging over us for so long.

[YorkshireRoyal99]

Yeah it is annoying to not have heard anything for a number of weeks now and yes agree that being under restrictions for a few years hasn't helped us (even the year we bought Puscas, Joao and Ejaria* we were under a soft embargo for a few weeks) and it hasn't allowed us to be competitive and offer players like Richards or Olise better contracts so we could get larger fees for them potentially if they signed.

Having said that, the argument against that would be we missed our opportunity to do that with the likes of Moore and Swift and possibly a couple of others a few years ago. If we'd have just sold those players when we had the chance, we wouldn't be in half as bad shape as we have been over the last few years.

[Mid Sussex Royal]

Someone posted something on here at the time that maybe someone at the EFL in touch with Mail guy got hold of the headline numbers in the financials and put 2 & 2 together....starting to think there could be a lot in this argument....