Dan Plumley: West Brom could face big future challenge with 50% cut on £90million parachute payments
We’re delighted to welcome football finance expert Dr Daniel Plumley as our exclusive columnist. Each week he’ll be giving his views on the biggest talking points at West Brom...
West Brom are currently into the second of three years of their parachute payments worth up to £90million but that could all be about to change in the future.
Dan Plumley has shared that those payments are set to drop to £44million over three years in the near future, a figure that clubs currently get in the first year alone after relegation [Times].
The Finance Expert admitted it will be a big challenge for clubs who follow the route of West Brom, who would argue that they need to pay wages and transfer fees in line with Premier League clubs, as the Baggies have done.
“You have to look at that from both sides,” he exclusively told West Brom News.
“I think I saw the figure they were speaking about was being cut to £44million, if I’ve got that right. That’s where you question mark the figures – it’s worth about £90million over three years, so my reading of that is if it was cut to £44million, that’s a three-year package.
“That’s roughly cutting it by half, so the clubs coming down have got a challenge, they would argue that they need to pay wages and transfer fees that are in line with Premier League averages to compete in that league, so there is a challenge.
“If they then get relegated, you’re not getting half that money that you would have got, that is a particular problem for those clubs.”
Problem.
West Brom are currently in their second year of the total £90million package, so if split into three, may have received more than £60million since dropping out of the Premier League.
Of course, that is nothing compared to the riches of the top-flight, with TV rights alone worth upwards of £100million each year for each club.
The Baggies have sold the likes of Matheus Pereira since returning to the Championship and look to have balanced the books well, although Guochuan Lai does still owe money back to the club.
Steve Bruce will know more about the financial ruin of dropping out of the Premier League after his multiple promotions, with that much sweeter than the dread that may follow.
The New Deal is being discussed by Premier League clubs, but thankfully, West Brom should see out their payments with no problems before next summer.
In other West Brom news, Steve Bruce is now set for urgent transfer talks after a major development at The Hawthorns