'Sheffield United's spending gamble shows why parachute payments must stop'

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Camden Blade

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Rod Liddell having a pop at us in today's Sunday Times column. I know he's a Millwall fan but sure he has some affinity with Boro. I know he relocated to Cleveland with his family.


www.thetimes.co.uk

Sheffield United’s spending gamble shows why parachute payments must stop

The Premier League is preparing a new proposal for the English Football League regarding the, uh, controversial issue of parachute payments — those bungs that clubs get for failure. My guess is that they will not find the Sky Bet Championship clubs in a terribly amenable state of mind, this...
www.thetimes.co.uk www.thetimes.co.uk
 



In what way have we spent wildly? Getting rid of parachute payments just makes the Premier League a closed shop or guarantees clubs go bust as there's no realistic way to survive in the Championship while carrying leftover Premier League wages. You'd end up with a bunch of mercenaries on one year deals hopping from club to club at the bottom end of the PL as no promoted side would ever be able to offer a competitive long-term contract without parachute payments to cover them.
 
Camden Blade said:
Rod Liddell having a pop at us in today's Sunday Times column. I know he's a Millwall fan but sure he has some affinity with Boro. I know he relocated to Cleveland with his family.


www.thetimes.co.uk

Sheffield United’s spending gamble shows why parachute payments must stop

The Premier League is preparing a new proposal for the English Football League regarding the, uh, controversial issue of parachute payments — those bungs that clubs get for failure. My guess is that they will not find the Sky Bet Championship clubs in a terribly amenable state of mind, this...
www.thetimes.co.uk www.thetimes.co.uk
Click to expand...

You got to subscrtibe to read it?

If you can cut and paste that would be good CB.
 
"They have enjoyed an average attendance of 28,669 this season and have also coined an extra £2 million from their cup run. Added to that, they received almost £16 million at the start of the season — the third and final leg of their parachute payments which accrued from being relegated in 2020-21."

Don't we receive our final parachute payment next season?
 
Camden Blade said:
Rod Liddell having a pop at us in today's Sunday Times column. I know he's a Millwall fan but sure he has some affinity with Boro. I know he relocated to Cleveland with his family.


www.thetimes.co.uk

Sheffield United’s spending gamble shows why parachute payments must stop

The Premier League is preparing a new proposal for the English Football League regarding the, uh, controversial issue of parachute payments — those bungs that clubs get for failure. My guess is that they will not find the Sky Bet Championship clubs in a terribly amenable state of mind, this...
www.thetimes.co.uk www.thetimes.co.uk
Click to expand...

What spending gamble? we have barely bought a player since relegation.
 
The Bear said:
You got to subscrtibe to read it?

If you can cut and paste that would be good CB.
Click to expand...

The Premier League is preparing a new proposal for the English Football League regarding the, uh, controversial issue of parachute payments — those bungs that clubs get for failure. My guess is that they will not find the Sky Bet Championship clubs in a terribly amenable state of mind, this season even more than most. They may well point the Premier League in the direction of Turf Moor — and even more egregiously, Bramall Lane.
Sheffield United and Burnley occupy the top two positions in the league, with Burnley running away with the title. Burnley have just been placed under a transfer embargo for failing to file their accounts on time, blaming a change in auditors for the delay. They “expect” the accounts to be filed sometime next month, which is thoughtful of them. They had parachute payments of about £40 million this season. But it is the situation at Sheffield United that really beggars belief.

They have enjoyed an average attendance of 28,669 this season and have also coined an extra £2 million from their cup run. Added to that, they received almost £16 million at the start of the season — the third and final leg of their parachute payments which accrued from being relegated in 2020-21.
How, then is it remotely possible that they have — as Steve Bettis, their chief executive, put it — the sort of “cashflow problems” which led one national newspaper to suggest that they might not be able to pay their players? Bettis poured scorn on this last suggestion, but did confess that there were unpaid bills and plenty of suppliers who have yet to receive payment — and one does wonder a little if he had his fingers crossed behind his back. He added that most of their Championship rivals were also living on a knife edge.
Perhaps they are. But few of his rivals were handed £16 million at the start of the season, in addition to the approximately £75 million the club has received in previous years as part of the same scheme.
The truth is that Sheffield United have spent wildly beyond their means, gambling on a swift promotion to restore the cashflow. In other words, they are the very antithesis of “sustainability”.
But what happens if — as is looking increasingly more possible — they do not go up? How will they pay their creditors or players then, when a new season beckons with no subsidy coming from the top tier?
 
The Premier League is preparing a new proposal for the English Football League regarding the, uh, controversial issue of parachute payments — those bungs that clubs get for failure. My guess is that they will not find the Sky Bet Championship clubs in a terribly amenable state of mind, this season even more than most. They may well point the Premier League in the direction of Turf Moor — and even more egregiously, Bramall Lane.

Sheffield United and Burnley occupy the top two positions in the league, with Burnley running away with the title. Burnley have just been placed under a transfer embargo for failing to file their accounts on time, blaming a change in auditors for the delay. They “expect” the accounts to be filed sometime next month, which is thoughtful of them. They had parachute payments of about £40 million this season. But it is the situation at Sheffield United that really beggars belief.

They have enjoyed an average attendance of 28,669 this season and have also coined an extra £2 million from their cup run. Added to that, they received almost £16 million at the start of the season — the third and final leg of their parachute payments which accrued from being relegated in 2020-21.

How, then is it remotely possible that they have — as Steve Bettis, their chief executive, put it — the sort of “cashflow problems” which led one national newspaper to suggest that they might not be able to pay their players? Bettis poured scorn on this last suggestion, but did confess that there were unpaid bills and plenty of suppliers who have yet to receive payment — and one does wonder a little if he had his fingers crossed behind his back. He added that most of their Championship rivals were also living on a knife edge.

Perhaps they are. But few of his rivals were handed £16 million at the start of the season, in addition to the approximately £75 million the club has received in previous years as part of the same scheme.

The truth is that Sheffield United have spent wildly beyond their means, gambling on a swift promotion to restore the cashflow. In other words, they are the very antithesis of “sustainability”.

But what happens if — as is looking increasingly more possible — they do not go up? How will they pay their creditors or players then, when a new season beckons with no subsidy coming from the top tier?

Sheffield United may not win promotion, despite their wage bill being around £19 million higher than the likes of Rotherham

It is thought that the Premier League is cognisant of the problems with parachute payments, even if they wish them to continue in some form. The English Football League is opposed to them, of course, and the government’s “fan-led” review of football governance, under the aegis of the Conservative MP Tracey Crouch, also advised that they should be scrapped.

Sheffield United’s annual wage bill is nearly £25 million, which would be unaffordable without parachute payments. Their near neighbours Rotherham United, also in the Championship, by contrast have an annual wage bill of not much over £6 million — and still come closer to turning a profit. At the moment relegated clubs get 55 per cent of the equal share of broadcasting revenue in their first year out of the top tier, dropping to 45 per cent the next year and 20 per cent in the third season. That equates to payments of about £40 million, £35 million and £15 million. Of course, it horribly skews the division, removing any notion of a level playing field — which was of course the reason for the payments in the first place: to enable the evicted members of that executive club to get back in.

It is thought that the Premier League wishes to enjoin relegated clubs to manage their finances rather more wisely than is often the case at present and that they would prefer that the parachute payments didn’t get splurged on expensive transfers and huge wages. It remains to be seen what kind of deal, then, the Premier League can place before the EFL.

For its part the Premier League has also rejected the most important conclusions of the government’s review, particularly with regard to parachute payments and an independent regulator. In the meantime the demented spending of clubs desperate to get their paws on the Premier League’s riches seems set to continue, with bankruptcy hovering ever closer to the most egregious spenders.
 
Realistically with the gulf in funding from the Premier league to the Championship unless a team is willing to loan players that are reaching their time at their parent club, Championship clubs could not afford to pay the wages or fees needed to boost their squad in the Premiership. Also the risk goes up of selling assets on relegation and not being able to invest in infrastructure or the academy which in turn, helps the Premiership
 



Dkc said:
"They have enjoyed an average attendance of 28,669 this season and have also coined an extra £2 million from their cup run. Added to that, they received almost £16 million at the start of the season — the third and final leg of their parachute payments which accrued from being relegated in 2020-21."

Don't we receive our final parachute payment next season?
Click to expand...

Yes, we do. It is just one of several errors that the prat makes in the article.
 
I think the proposed sale is the reason for the problems. Trying to leave the new owner with the debts rather than paying them now.
 
jono_t2000 said:
You get slated by Simon Jordan for having no ambition if you are like Norwich and don't spend

And get slated for 'gambling' if you do.

Can't win.
Click to expand...

You can if you realise that it is absolutely possible to ignore the opinions of people like Simon Jordan.

Social media has a lot to answer for in regards to the thinking, or lack of, people today.
 
I’m not reading the article because it will be a load of bollocks and will wind me up but:

  • We had the lowest PL wage bill in the two seasons we were in the PL (I think we were lower than Norwich the 1st season). Therefore we actually should have spent more in order to compete.
  • We haven’t bought anyone and the players will have been on relegation reductions, this is what the parachute payments are for.

Basically Rod needs to get himself fucked off and write about a subject he knows something about. Like what it’s like to be a cunt or summat.
 
FATTYFOULKE said:
I think the proposed sale is the reason for the problems. Trying to leave the new owner with the debts rather than paying them now.
Click to expand...

Wasn't it originally mooted that the sale price was £115 million?

Has it been reduced to £90 million to take account of the debts being paid by Dozy?
 
I would advocate the opposite view and not just because I am a United fan.

He may have a point in some cases about parachute payments but we are not that example.

1. Got relegated.
2. Sold Ramsdale for up to 30m. Failed to sell anyone else probably because we were so bad. Clearly we were hawking Berge around but failed to get a bidder that didn't want us to give him away. Released higher earners like Jags.
3. Sent around 14 senior players out the door in some way, shape or form and welcomed 9 players, 6 on loan, one free and Davies for a nominal fee plus youth in Starbuck. Big spenders, eh?
4. Following summer, sent 9 players out the door from the senior set up including higher earners like Didzy and Burke, in favour of blooding younger ‘home grown’ players like Ndiaye and Jebbison and brought in just 5, 4 on loan of which one got terminated. The only spending 'blemish' is the slight gamble which has paid off, on Ahmedhodžić for around 4m. Millwall laid out 2m on Flemming. Which is more lavish? 4m by a team getting almost 29k gates or 2m by a team getting less than half that?
5. Not a single player came in during January.
6. In the meantime we’ve used the money to honour the contracts of the players who still remain with the club whilst actively looking to cut the overall playing staff and essentially signing just the one player for a non-nominal fee.

It seems Rod had the article in mind and just decided to pick on us. There are plenty of other clubs no doubt, who came down and hoovered up much talent upon relegation like a Newcastle or West Ham but I’d say United are probably one of the worst examples to support the ‘teams abusing parachute payments’ narrative.

The only reason we haven’t probably cut our cloth more is due to lack of interest. Yes we could have offloaded Berge for 10m perhaps or Ndiaye for 15m but I wouldn’t consider not selling players for half their market value to be somehow lavish. In Ndiaye’s case he’s a player we’ve at least to a degree developed from lower down. Plus of course, Hecky giving more debuts to young players than any prior manager doesn’t exactly fit the narrative of a club who is relying on splashing the cash.

The parachute payments have allowed us to keep up with obligations we had to take on in the Premier League. The big disparity between the top and second tier is the main issue here, not clubs needing support to make the transition from top to second top tier.

What is his actual proposal? You sign a player on a 3 year deal in the PL. You go down as three teams inevitably will. You lose the PL TV money. How does numb nuts aim to pay the remaining 2 years of the player’s contract if you don’t get any takers?
 
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Dkc said:
"They have enjoyed an average attendance of 28,669 this season and have also coined an extra £2 million from their cup run. Added to that, they received almost £16 million at the start of the season — the third and final leg of their parachute payments which accrued from being relegated in 2020-21."

Don't we receive our final parachute payment next season?
Click to expand...
I find RL quite funny in his articles in the main paper but I think he has his facts wrong on this one. As I understand it we get 3 seasons of parachute payments as we stayed for seasons in PL. These are 55% of what PL pays in TV money in season 1(last season) about £45 mill. This season (our second after relegation) we get 45%, about £40 mill and next seasin (unless promoted back to PL) 20%.
How does he know our wage bill is £25 mill as our accounts for this season have not been published yet?
 
What,s that silly cunt riddle is on about. The Blades have not spent much in the transfer market since we were relegated. mostly loan players have come in.
 
Dkc said:
Don't we receive our final parachute payment next season?
Click to expand...

Maybe he‘s referring to us already taking out a loan this season based on nexts seasons parachute money.
So in effect.…we’ve already spent nest years Sky money.
 
Camden Blade said:
For its part the Premier League has also rejected the most important conclusions of the government’s review, particularly with regard to parachute payments and an independent regulator. In the meantime the demented spending of clubs desperate to get their paws on the Premier League’s riches seems set to continue, with bankruptcy hovering ever closer to the most egregious spenders.
Click to expand...

Think one needs to consider the reasons why the PL clubs voted to pay out parachute payments to relegated clubs.

The answer is to improve the competitiveness in the PL and that’s one of the reasons it’s so successful.
Even the small clubs in the PL are wealthy with some top talent, so every game is a spectacle.
Every promoted club is encouraged to compete due to FFP.
Take FFP away and then we’ll be like other leagues where the bottom 2 or 3 are whipping boys losing 6-0 every week.
Also without FFP you’ll find that every single season the 3 promoted clubs have zero chance and are relegated in their 1st season because they’ll need to implement massive relegation clauses, so they’ll struggle to attract decent talent.

Now…all promoted clubs can afford to gamble and sign players on high salaries because even if that club is relegated they can still afford to pay most of their agreed salary.

There’s little chance of bankruptcy and no relegated club has come close to this.
That’s what FFP or Profit and Sustainability is far….the answer is to make FFP stricter (accounts reviewed every year) with stiffer penalties.

The real issue is those clubs who haven’t been in the PL for a few years being unable to compete financially with the relegated clubs
so it’s these clubs that need protecting like Sheff Wed and Derby who are breaking the rules, gambling risking going bankrupt.
 
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