The Cost of Premier League Relegation

Birmingham City Relegation

If you weren’t able watch any of the Premier League action on Sunday or at least catch the Premier League Review Show, you really missed out. Heading into kickoff, Manchester United had already secured the title while 6 clubs on the bottom of the table battled for 4 spots in the Premier League next year with 81 possible outcomes. With all kickoffs synchronized, each goal sent shock waves across England as teams flip flopped in and out of safety.

After late goals for Wolves and Wigan kept them up, it was ultimately Birmingham City and Blackpool who paid the ultimate price, being relegated to the Championship next season. While it may be hard for American sports fans to understand, relegation in English soccer is about more than just pride. Teams being sent down from the Premier League, especially the larger clubs, are devastated financially when they no longer receive their share of Premier League TV revenues which at this point equal nearly £40 million per year.

While the Premier League does provide parachute payments for four years to ease the blow, some big clubs with high payrolls feel the pain immediately. For the first two years, the payment is £16m per year; for years three and four it drops to £8m per year.

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