Relegation is a real dogfight – and you can't rely on your parachute

The Weekend Dossier

Saturday 07 April 2012 01:11 BST

Sam Allardyce has had to undertake a rebuilding programme at West Ham following their relegation last season (Getty Images)

They call it the relegation dogfight and, as handles go, that feels pretty apt. Falling out of the Premier League these days could signal the end of your club, not just the end of those luxurious annual jaunts to Old Trafford and the Emirates.

There is a reason why Blackburn fans have marched through the streets around Ewood Park this season and why Wolves supporters can be found in as vociferous voice after a game as during it. Those on the terraces know only too well the price of relegation and just how far and treacherous the road back to the promised land really is. Fear stalks those scrapping for their lives right now, and with good reason.

Portsmouth will always be held up as the example of what happens when it all goes wrong. Their very existence remains in doubt. They look set to follow a path trodden by three other clubs (Norwich, Manchester City and Sheffield United) of following one relegation with another, but Premier League survival for those at Fratton Park has given way to Championship survival, which has in turn given way to an almighty struggle for any form of survival.

It is called the parachute payment, the pot of money given to clubs who tumble out of the land of the golden goose in May each year, but who on earth came up with that name? Of the 30 clubs relegated over the last 10 years, fewer than half have returned to the top flight. Who would fancy jumping out of an aeroplane with odds of that sort?

The payment in 2006 was £6.5m per relegated club for two seasons. That rose to £16m over the same length of time, as a way of further softening the financial blow of demotion.

By the summer of 2010, after lengthy talks, the figures were reset so that any team tumbling out of the big-time was guaranteed £48m in parachute payments, split into instalments of £16m in year one and year two, then £8m for year three and year four.

That is still not proving enough to soften the blow. Wage bills are slashed and new teams put together in haste (note the rebuilding jobs that had to be undertaken by Sam Allardyce at West Ham and Chris Hughton at Birmingham following demotion last May).

"You're probably looking at somewhere around the £40m mark being taken from a club's annual turnover when they get relegated from the Premier League," says Vinay Bedi, a football finance expert from the investment firm Brewin Dolphin. "There is a huge reduction in their income from the Sky television deal but other revenue streams, like corporate income and gate receipts, go down as well. The parachute payment is a help but it can't go anywhere near bridging the gap.

"There has to be a huge restructuring and it has to be done pretty quickly in order to have a new team on the pitch and a new financial plan in place for the following season. What we are seeing now is a lot of big-earning players being sold to ease the financial burden. That makes it hard for a manager to put together a team on the field of play to be competitive.

"Clubs know they need to get back up as quickly as possible, but the financial constraints of life outside the Premier League make it very difficult. Relegation can be disastrous for clubs and it is why the fight at the bottom of the table is so vital.

"Those in the boardroom know the price of not being a Premier League club these days. It is huge."

Margaret Byrne, Sunderland's chief executive, adds: "Football, and the Premier League in particular, is a global game, watched in over 200 countries. This presents a huge number of opportunities to increase the profile of a club like Sunderland and, from a financial perspective, the Premier League is the only place you want to be playing football. If a club is relegated and doesn't gain promotion whilst having the benefit of parachute payments, it can become difficult for them. After a period of being classed as somewhat of a yo-yo club we have now enjoyed five consecutive seasons of top-flight football and we can see the rewards commensurate with that, in terms of both the improvements to our squad and the progress we have made in the league.

"The guaranteed income from Premier League football allows clubs to grow and develop year on year. When clubs are recognised as Premier League clubs, there is also much more interest worldwide – from players aiming to play in this great league to sponsors wanting to utilise the effect of a global audience to promote their brand."

At present, as we head into the home straight of the season, there appear to be four clubs in serious danger – Bolton, QPR, Blackburn and Wigan. The side currently bottom, Wolves, with eight defeats in their last 10 league games, are on the brink of the last rites being read; two more, Aston Villa, five points above the drop zone, and West Bromwich, eight points clear, might be having the odd sleepless night.

At least West Bromwich know how to bounce back. After their three relegations, they have returned to the top flight at the first time of asking twice and on the third occasion within two seasons. That is increasingly becoming a rarity and will offer little comfort to those scrapping for their lives.

Of the 30 teams relegated in the last 10 years, only eight have returned immediately (or just under 27 per cent). The figure for eventually getting back is more healthy at 14 out of the 30 (or just under 47 per cent). Of more consternation to those dreading the drop at the moment is the fact it is clearly getting harder to return; either the cost of clearing wage bills, as those who fall have to do, is too great or Championship clubs are getting hungrier. In the last four seasons, of the 12 teams that were relegated, only three (25 per cent) have returned to the Premier League. It is too early to second-guess whether any of the three relegated from the 2010-11 season will make an immediate return, but the safe money would probably suggest that only one of Birmingham, Blackpool and West Ham might breathe an almighty sigh of relief when the Championship campaign has finally kicked its last, spine-tingling kick in what everyone now understands to be the most valuable, one-off game of football in the world, the play-off final on 19 May.

For the other two (and perhaps all three), the future will be hugely uncertain, as those in the lower reaches of the Premier League are only too aware.

@martinhardyindy

Five Asides

1 There's more to making a good signing than the stats

Stewart Downing, Jordan Henderson and Charlie Adam were three of the top 12 players in the Premier League last season for creating goalscoring opportunities. Liverpool, where Damien Comolli and statistical analysis are important, signed all three last summer for a combined £45m. All three took corners and free-kicks (thus creating goalscoring opportunities) for their clubs last season. Did anyone not realise this would be impossible if they all played for the same team?

2 A gloomy view of England prospects is good news

Two years before reaching a World Cup semi-final on foreign soil, England were crushed in the European Championship. Six years on (from Italia '90) there was a woeful friendly with a Hong Kong XI, the dentist's chair and a lengthy drought for Alan Shearer before England again charged through to the semi-final of a major tournament. The pessimists at present refuse to acknowledge the collective potential of Tom Cleverley, Jack Wilshere, Phil Jones, Ashley Young, Joe Hart, Kyle Walker, Micah Richards, Daniel Sturridge and Leighton Baines. Low expectations, however, are not usually a bad thing.

3 Ben Arfa's no giant, but he has been woken from sleep

It was revealing to learn from Newcastle's chief scout Graham Carr this week that Hatem Ben Arfa fell asleep on the substitutes' bench during a game for Lyons. It explains why Alan Pardew has been on Ben Arfa's case this season – and it's worked. Pardew and his back-room staff have woken up one of the most exciting talents currently playing in the Premier League.

4 If Ferguson takes title, it will set them all a-Twitter

I made my debut on Twitter eight days ago (@martinhardyindy in case you missed it) and I'm still here and still able to enjoy a quiet pint in my favourite pub. So far, so good. One debate, about the manager of the year, stirred me. Well done Brendan Rodgers, Alan Pardew and Paul Lambert, but if Manchester United go on to win the title then Sir Alex Ferguson, for me at least, walks it, having taken on and beaten the might of the City money men with so little tinkering, and a weakened team (see European failure for proof of that).

5 Let him who is without sin cast the first aspersion

Moral outrage is always a precarious business. Roberto Mancini has come in for huge criticism this season for brandishing imaginary yellow cards, while players who dive, appeal for throw-ins which are not theirs, foul, handle on goal-lines and launch verbal warfare with referees for 90 minutes escape, in the main, pretty much scot-free.

Relegation rollercoaster: Ups and downs

Teams relegated from the Premier League between 2000-01 season and 2009-10 season and whether they returned to the division.

2009-10

18 Burnley (no)

19 Hull City (no)

20 Portsmouth (no)

2008-09

18 Newcastle (yes, immediately)

19 Middlesbrough (no)

20 WBA (yes, immediately)

2007-08

18 Reading (no)

19 Birmingham (yes, immediately)

20 Derby County (no)

2006-07

18 Sheffield United (no)

19 Charlton Athletic (no)

20 Watford (no)

2005-06

18 Birmingham (yes, immediately)

19 WBA (yes, two years later)

20 Sunderland (yes, immediately)

2004-05

18 Crystal Palace (no)

19 Norwich (yes, six years later)

20 Southampton (no)

2003-04

18 Leicester City (no)

19 Leeds United (no)

20 Wolves (yes, five years later)

2002-03

18 West Ham (yes, two years later)

19 WBA (yes, immediately)

20 Sunderland (yes, two years later)

2001-02

18 Ipswich Town (no)

19 Derby (yes, five years later)

20 Leicester (yes, immediately)

2000-01

18 Manchester City (yes, immediately)

19 Coventry City (no)

20 Bradford City (no)

This weekend's team news...

Sunderland v Tottenham

Odds Home 23-10; Draw 12-15; Away 6-5.

Kick-off Today, 12.45pm (Sky Sports 2; Highlights BBC 1, 10.20pm)

Team news Sunderland's Fraizer Campbell and Lee Cattermole (both knee) are doubts, while Titus Bramble (Achilles) and Wes Brown (knee) remain long-term absentees. Spurs have no new injury concerns, but Tom Huddlestone and Michael Dawson (both ankle) will continue their lengthy rehabilitation.

Bolton v Fulham

Odds Home 8-5; Draw 23-10; Away 7-4.