As a Premier League season nears its end, the battle at the top takes centre stage. The top clubs fight it out for the ultimate prize. However, more is at stake towards the bottom half of the table.
Relegation and promotion is a striking feature in European football, not seen in other sporting leagues. In the Premier League, finishing in the bottom three places results in the dreaded drop to the lower EFL Championship. Finishing bottom in the Championship results in yet another step-down, and this continues till the fourth tier of English football.
No offence to the lower tiers, but there is tremendous disparity when it is compared to the Premier League. Quality and popularity are the two main aspects in which this disparity is evident.
Where does the money come from?
Since the advent of the Premier League in 1992, relegation has never been so costly. The prime reason for this is the huge broadcasting deals. A new deal was signed in the 2016-17 season, which is estimated to be worth in excess of £5 billion. This results in an insane £10 million per game. Championship clubs get a mere £3 million each season.
The reason for these staggering TV deals is the ever increasing popularity of the Premier League. It is the most watched football league in the world, boasting of a TV audience of a whopping 4.7 billion. This number has risen due to popularity outside Europe, mainly in Asia and America.
This season, every top flight club is sure to pocket £100 million in the least. Aston Villa, who finished 20th last season got £66 million. £100 million is what champions Leicester City received in May. Come next May, the new champions will get a whopping £60 million in excess. The Championship winners, on the other hand, receive a mere £100,000 in prize money, which is one tenth of a million.
Why is all the money in the Premier League?
So, what is the origin of this staggering financial gap? Before 1992, the TV income was spread out quite evenly. The First Division got 50%, 25% went to the Second Division and the remaining 25% went to the Third and Fourth Divisions. However, the upper clubs wanted to grab the profits which were to arrive courtesy of satellite broadcasting and payTV. They decided to form a separate league, a decision which was opposed by the Football League.
In the aftermath of this decision, the Football League sued the First Division clubs unsuccessfully and the Premier League came into being. Fast forward 23 years, and the top clubs’ TV rights have risen by incredible numbers. Not so much for the lower leagues.
The Premier League does share some of the money with the lower clubs, perhaps due to ill-feeling regarding the separation in 1992. This amount, penned as ‘solidarity’ money by the League, was £161 million in the years 2013-16. Prior to 1992, the amount shared was 50%, but now that has been whittled down to a meagre 3%.
The relegated clubs, however, receive special payments from the Premier League which are entitled as ‘parachute payments’. Each club which drops down receives £25 million in their first season in the lower tier. This amount reduces to £20 million the following year, and to £10 million in the third and fourth seasons.
This system provides a definite advantage to the three relegated clubs over the rest of the Championship to bounce back immediately to regain their top-flight status. This practice, however, is not received well by the rest of the Championship for obvious reasons.
Effects of the drop
The huge cut in the annual income is visible both on and off the pitch. Luring quality players proves to be a Herculean task. The clubs are unable to afford either the transfer fees or the weekly salary which the player demands. The wages of existing players are also inevitably cut, which may prompt them to leave for Premier League suitors. Relegation may result in significant changes to the squad as well as the coaching staff. This makes it difficult to develop chemistry on the pitch.
Off the pitch, the community feels the pain as well. Hundreds of jobs are lost, and many more see their wages cut. The disgruntlement among the fans is evident. Perhaps relinquishing Premier League status is harder for the supporters than the club itself. The pain is compounded for the fans when the local rivals survive instead. Case in point: Newcastle United.
The Premier League is like a safe haven which all Championship clubs crave and all Premier League clubs don’t want to let go of. Relegation thrusts the club into a period of uncertainty and failure to bounce back results in huge losses financially. Three ill-fated clubs will go down despite their greatest efforts, but ultimately, the time is never right.
