Cost of Premier League relegation: How much could Everton lose if they go down this season?
How Everton could be impacted financially if they are relegated from the Premier League this season.
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Relegation is a very tough, bitter pill to swallow for any club and as it stands, Everton is staring it right in the face. Anything but a win against Bournemouth today puts the the Toffees at risk of dropping down from the Premier League.
Three points will guarantee their safety, but less than that puts both Leicester City and Leeds United into play to scramble out of the drop zone. Of course, no team wants to suffer relegation but two teams must join Southampton in the Championship next season.
Facing relegation impacts much more than a club’s pride, in fact, the financial damage caused by dropping down a tier is a lot more than many might think. Here’s a look at how this season’s relegation candidates would be impacted financially if they were to go down.
Premier League prize money and endorsements
Last season, Premier League clubs split a prize pot of about £2.6 billion, meaning that even the lowest ranked teams earned a handsome amount for their efforts. For example, the breakdown of prize money last year showed that champions Manchester City pocketed £161.3 million, 17th-placed Southampton won £113.3 million, and bottom of the table Norwich City earned just over £100 million, despite being relegated.
There is also the matter of televised fixtures and advertisements, which of course bring in a pretty penny. Last season, football finance expert Kieran Maguire said teams who are promoted from the Championship make the huge leap from £8 million in TV deals, to a whopping £100 million.
“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 told 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.”
Another big outgoing is wages. Clubs must adapt to no longer being in the top flight, but their players may still be on Premier League contracts with salaries to match.
Players don’t just leave sides because they don’t want to play in the Championship, clubs are often forced to sell their star players in order to balance the books and make back some much-needed cash.
Parachute payments were introduced to help relegated clubs avoid suffering financially after moving down from the Premier League. The parachute money is worth a total £100 million each season, which is distributed throughout the league.
Payments are given over three years, but for those only in the Premier League for one season before relegation, payment is spread across two years. Clubs that bounce back up to the first tier within three years of relegation do not receive the parachute payments.