Cost of Premier League relegation: How much will Leeds United lose after dropping to Championship? - YEP 28/5/23
How Leeds United will be impacted financially after being relegated from the Premier League.
By Georgia Goulding
Leeds United are headed for the Championship after suffering
a final Premier League defeat to Tottenham Hotspur. Fans’ hearts broke as
Everton earned their safety, sending both the Whites and Leicester City into the
bottom three with Southampton.
Of course, facing relegation is any club’s nightmare but the
impact it has is far beyond the players simply swallowing their pride and
dropping into a lower league. Championship football is not an alien concept to
Leeds but they will be disappointed to have lost their Premier League spot and
will know all too well how a team is impacted financially as a result.
Here’s a look at how the subject of money will change now
that Leeds have lost their place in England’s top flight.
Premier League prize money and endorsements
Leeds will still scoop a decent amount of money for their
efforts this season, despite the overall outcome. Based on last season’s prize
pot, they will pocket £104.6 million, which is the same amount 19th-placed Watford
earned last year.
However, despite the bittersweet prize money, relegated
teams will enter a league where they will earn significantly less in television
and endorsement deals. In the Championship, it is as low as £8 million but it
skyrockets to £100 million after being promoted to the Premier League,
according to football finance expert Kieran Maguire.
“If you talk to commercial directors, they say they can
charge 10 times as much for a 30-second advert on the pitch side perimeters in
the Premier League than in the Championship because it’s going out to a global
audience,” he said in an interview with The Mirror.
“For example Leeds got an extra £6 million in commercial
income once in the Premier League. And you will probably add in more from
matchday income, although not a lot, as remember, there are fewer games.”
Player wages
Another adjustment relegated teams must make is to their
squads. After paying Premier League wages to players, clubs often have to
offload a few of them in order to free up some funds. However, this may not be
the case for Leeds as there is a clause which will decrease players’ wages by
50 percent once in the Championship.
While this will save some headaches over finances, there is
still risk of an exodus as players may not want to stick around on a heavily
reduced salary.
Parachute payments
Parachute payments were introduced to help clubs avoid
suffering financially after being relegated from the Premier League. It is
worth a total of £100 million each season, which is distributed throughout the
league.
Payments are issued over three years, or two years for those
only in the Premier League for one season prior to their relegation. Clubs that
earn promotion again within three years of relegation do not receive the
parachute payments.
