Game of high stakes

As the relegation battle reaches a climax, for struggling Premiership clubs the price of failure has never been so high, reports Stuart James

As the bitter fallout from the Premier League's decision not to deduct points from West Ham rumbles on, one glance at a Championship balance sheet reveals why the debate has become so rancorous. An understandable sense of injustice festers among the relegation-threatened clubs that West Ham have escaped with a fine but behind the grievances also lies the realisation that dropping out of the top flight has never been so costly.

Nothing makes football chairmen more uneasy than the prospect of surrendering money, and relegation from the Premiership this season will be the most expensive setback of all. Parachute payments payable over two seasons, climbing from £7.5 million to £11 million a year, should cushion the fall into the second tier but dramatically reduced television revenue - each Championship club will receive less than £1 million next season compared with £30 million in the Premiership - is a conclusive factor.

"This is the most costly time to drop out of the Premiership," said Dan Jones, who leads the Sports Business Group at Deloitte, City accountants.

"In terms of the difference between being in the Premiership this year and the Championship next year it's the biggest relative gap there has been. The working figure I would use for the cost of going down, in terms of the revenue difference between being in the Premiership and in the Championship next year, would be £25-30 million."

That sobering shortfall is not one that can be easily bridged, as Charlton, West Ham, Wigan and Fulham are all acutely aware. "We will have to do what everybody does and that's cut your cloth according to what you can afford," said Dave Whelan, Wigan's chairman.

"Across the board, with every member of staff, not just the playing staff, they have all got in their contract that if Wigan Athletic go down there will be a reduction in their basic wage, even the groundsman."

Jones would expect other clubs to have similar contingency plans in the event of relegation. "Lessons have been learned from the bad experiences of certain clubs when they have gone down," he said.

"It is a fact of life that three clubs will be relegated and, if you take a view that seven or eight clubs have never been out of the Premiership since it started, your odds become even tighter. So it would be foolhardy to bury your head in the sand and pretend it couldn't be you."

For those clubs established in the top flight, however, putting clauses in players' contracts to enforce a salary cut in the Championship can be much more problematic. Take the example of Birmingham City. They were forced to pay Premiership wages to a small number of players in the Championship this season.

"If you are buying a top player he is not going to come to you on a restricted contract," said David Gold, Blues' chairman - and Charlton face a similar predicament next term.

Richard Murray, the London club's chairman, revealed "many of our players will take a reduction if we get relegated" and admitted, "you have to say many of our players will probably leave the club". But he also said that there would, in some cases, be a need to honour Premiership pay deals. "If you have been in the Premiership five years and you go and sign another player from a Premiership club on a four-year contract they are not coming to you assuming you are going down."

Fulham are likely to be in the same position, and West Ham, the top flight's biggest spenders in the January window, can expect a fair degree of financial pain - quite part from their £5.5 million fine - to accompany relegation even if the burden will be eased through a combination of escape clauses in several players' contracts and an expected Upton Park clear-out.

At Wigan, one place above the bottom three, Whelan expects a few departures rather than a mass exodus.

"I'd think 10 per cent-20 per cent of the players will want to stay in the Premier League. You can't blame them for that," said the Wigan chairman. "If they go to the boss [ Paul Jewell] and say, 'I want to stay in the Premier League', I can't see him trying to persuade them to stay and play for us in the Championship."

Like Murray, Whelan is able to take solace from the increased parachute payments, although that revenue is no guarantee of success. Since the Premier League's inception in 1992 there have been only 12 occasions when relegated clubs, including Birmingham and Sunderland this season, have secured an immediate return to the top flight. Increasing parachute payments might have been expected to make the task easier but last season, for example, the six clubs receiving those monies - Crystal Palace, Leeds, Leicester, Norwich, Southampton and Wolves - all failed to win promotion.

Murray, nonetheless, is encouraged by the £11 million promise. "It makes a big difference," added Charlton's chairman. "What it does mean is that we are able to keep quite a few of our better-paid players, which you couldn't even consider to do without it. On one hand, with a Championship hat on, you would have to say that it's a bit unfair that the three clubs get that benefit, but I can assure you you just can't get your costs down in one year or even two years to what they were.

"I think the differential in television income between a parachute payment and a team ending up in the bottom half of the table [ next season] is going to be around £20 million. You will lose that to start with and you will lose all your sponsorship and other things which you may not get as much of in the Championship as you do in the Premiership, and then the extra load that many clubs have to bear is that their lenders, ie the banks, do not consider you to be such a good risk.

"Banks don't like to take too many risks anyway in football, but you are considered a much better risk in the Premiership. In our case, I think we have to try to reduce our overdraft at the same time as coming to terms with the reduced income. But I think one area we are going to be okay with is attendances. We are pretty innovative with our season-ticket offers, where we have offered a free season-ticket if we go down and come straight back up again."

Indeed, more than 17,000 season tickets have already been sold at Charlton, almost as many as Wigan's average attendance in the Premiership . Not that Murray is trying to paint relegation in a good light. "As far as reduced wages for non-football staff, it will be more a case of not reducing the wages but losing some people," he said.

"I think the footballers don't see that side. They are obviously disappointed if they get relegated but they don't realise that a receptionist goes."

Gold understands what his boardroom colleagues are going through. The Birmingham chairman remembers the end-of-season dinner 12 months ago - "it was almost like going to a wake" - when he apologised for slipping out of the top flight.

"I had to get up on a stage and I stood up in front of 1,000 people and said sorry," he recalled. "Relegation is the most devastating thing."

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