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Football, Finance and the Future: A Bubble About to Burst?
The cost/benefit of Premiership status.
Promotion to the Premiership is currently worth about £12 million, as a result of the revenue boost that has come from the increased TV contract. The scale of the boost is estimated to rise to £25 million in 2002-03 season.
Revenues also tend to rise through what are known as 'match-day' payments, in other words, money taken through the turnstiles. Attendances for top league clubs increase by an average of 5% as a result of promotion, even though there are 4 fewer games played in the top flight.
But as we have seen, Premiership clubs face an increased wage bill as they attempt to retain their positions in the top league. Total wages paid in the game were up by 18% in 1998-99, against a 10% increase in turnover. In the Nationwide League, wage bills rose by only 3%.
Having said all this there is one area in which clubs relegated from the Premiership have a big advantage over other Nationwide pision 1 sides - the TV money that they take with them.
When Wimbledon FC were relegated at the end of the 1999-2000 season, they were guaranteed payments of £4.3 million, comprising a 'merit award' of nearly £700 000 and an equal share of the Sky TV money, which at that time worked out at £3.65 million per club.
In addition, they receive a 'parachute payment', equivalent to 50% of the equal share of the Sky money, for the next two years after relegation. Clubs entering the Premiership anew have to make do with far lower TV cash sums. This hinders them as they try to build squads strong enough to survive in the top league.
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