At an EGM earlier today, Football League clubs voted to increase the parachute payments made to clubs relegated to the National League from the beginning of the 2016/17 season.
The two clubs relegated from Sky Bet League 2 currently receive 50% of the equivalent Basic Award payment to League 2 clubs for one season, but from next season onwards will be paid:
· 100% of the equivalent Basic Award payment made to League 2 clubs in the first year following relegation.
· 50% of the equivalent Basic Award payment made to League 2 clubs in the second year following relegation (unless a club achieves promotion back to The Football League at the first attempt).
The Football League's Chief Executive, Shaun Harvey said: “In recent seasons we’ve seen a number of clubs suffer severe financial trauma following relegation from The Football League and in some cases fold altogether. As a result, it became increasingly clear that we needed to review existing arrangements and address our approach to managing the financial transition for clubs in these circumstances.
"I would like to pay tribute to our clubs for taking this decision which is testament to their collective solidarity, given that the League's financial distribution formula means that the bulk of this money will come from funds that would otherwise be provided to Championship clubs, who are ultimately the least likely to benefit from it."
Clubs also voted to amend the existing parachute payment regulations within The Football League which will see:
· Clubs relegated from the Sky Bet Championship receive 11.1% of the Basic Award payment to Championship clubs for one season.
· Clubs relegated from Sky Bet League 1 receive 12.6% of the Basic Award payment to League 1 clubs for one season.
This change will ensure that clubs receive an enhanced figure that is proportionate to the wider increase in financial distributions to clubs emanating from the League’s new broadcasting agreement. For illustrative purposes, this would have equated to £230,000 and £85,000 respectively for the current season (whereas relegated clubs actually received £120,000 and £50,000 respectively under the previous regulations).
Clubs have also introduced a new regulation requiring them to ensure that their ground and playing squad are available for a period of 4 days following the end of the regular league season to play or complete any previously postponed or abandoned matches. Additionally, existing regulations relating to clubs that default on transfer payments to their fellow clubs were strengthened.