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Overhaul for parachute payments

Published 02/06/2015

Richard Scudamore has reiterated the Premier League's commitment to lower league funding
Richard Scudamore has reiterated the Premier League's commitment to lower league funding

Promoted clubs who are relegated after just a single year in the Premier League will no longer benefit from full parachute payments from the 2016/17 season.

The change in the rules means that promoted clubs Bournemouth, Watford and Norwich will miss out on a year of parachute payments if they go straight back down.

The parachute payments system is also changing so that the money - at least £64million - will be distributed to relegated clubs over three years rather than four. Clubs who go back down after a single year in the Premier League will only get the first two years of payments rather than the full three years.

The new rules will not affect the three clubs most recently relegated from the top flight - Hull, QPR and Burnley. They will receive £64million split over four years - £24million in the first year, then £19.3million, then £9.6million for each of the next two years.

Parachute payments are likely to rise significantly from the 2016/17 season, however, when the new Premier League TV rights deal takes effect. The £5.3billion domestic rights package is 65 per cent higher than the current deal and the overseas rights have still to be agreed.

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.

Shortly after the Premier League announced the deal for domestic rights, it revealed that 20 per cent of that would go to grass-roots football, solidarity payments to lower-league clubs, participation and education and disadvantaged groups.

And it has now revealed its plans for solidarity payments, with the hand-outs linked to a mechanism to broadcast deals.

Championship clubs currently receive £2.3million a season with League One clubs getting £360,000 a season and third-tier outfits being handed £240,000.

Under the new arrangements, the solidarity payments will be based on a percentage of a third-year parachute payment with Championship sides getting 30 per cent, League One 4.5 per cent and League Two three per cent.

With the final value of the broadcast deal unknown, exact figures cannot yet be put on the payments from 2016/17 but if the new system was now in place, Championship clubs would get around £3miilion, League One around £450,000 and League Two £300,000.

"The Premier League and our clubs are committed to sharing a significant amount of revenue for the development of football outside of the League," said Premier League chief executive Richard Scudamore.

"The increase in solidarity payments to Football League clubs across seasons 2016/17 to 2018/19 is an important part of that, as is our continued support for community facilities, sports participation programmes, and other groups and projects."

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