Cost of relegation: The financial impact of dropping out of the English Premier League?

  London, Monday @PeopleSport11

Stoke were condemned to the Championship on Saturday and Swansea host Southampton in a relegation six-pointer on Tuesday night with all to play for, for both teams. But just how much will it cost the clubs financially after they drop out of the English Premier League?

A late defeat against Crystal Palace meant Paul Lambert’s men were the first side whose fate was sealed this season but with West Brom still clinging on, attention turns to a high-pressure clash at the Liberty Stadium that pits the third-bottom Swans against the fourth-bottom Saints.

With the pair level on points, defeat would leave either team on the brink of relegation with one game to play, as well as sending the Baggies down in the process.

Both clubs have been established in the Premier League for some time – and the financial shock of dropping into the Championship could be significantly damaging.

Deloitte Sports Business Group estimate relegation to cost either club approximately Sh6.8 billion (£50m) in Premier League distributions alone. Premier League clubs receive roughly a Sh12.2 billion (£90m) share from the league each season. That’s money generated from TV revenues from domestic and foreign markets. While relegated teams receive a Sh5.4b (£40m) parachute payment, there is still a large shortfall for clubs to make up. Those parachute payments equal to 55 per cent of the broadcast revenues in the first year after relegation. In year two it goes down to 45 per cent (£35m) and in year three it is 20 per cent (£15m).

However, if a club has only been in the Premier League for one season – such as Brighton or Huddersfield – they would only receive the first two payments of the parachute money.      -AFP

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