Can the Rams jump through Hoops to claim £120m prize?
22 May 2014
Winning the Football League Championship Play-off Final on Saturday 24 May will offer the biggest financial prize in world football, worth at least £120 million to Derby County and at least £80m to Queens Park Rangers. This revenue uplift is lower for QPR because they would otherwise continue to benefit from parachute payments following their relegation from the Premier League at the end of the 2012/13 season.
QPR will need to overcome the statistics for an immediate return to the top flight. The team finishing fourth in the Championship, as Rangers have this season, have not won promotion to the Premier League via the play-offs since Charlton Athletic at the end of the 1997/98 season, a staggering 16 years ago.
Derby County hope to return to the Premier League after a six year absence, joining Championship winners Leicester City and runners-up Burnley who have both already secured the automatic promotion places.
Adam Bull, Senior Consultant in the Sports Business Group at Deloitte, commented: “The winners at Wembley on 24 May can expect a significant revenue increase in 2014/15, their first season following promotion to the Premier League. This will be at least £60m for Derby County and at least £40m for QPR, who are already in receipt of Premier League parachute payments. The vast majority of this uplift will be from broadcast income as the Premier League enters the second year of its greatly enhanced three year TV deals. Based on existing distribution methods, even if a club is relegated after one season in the Premier League, it will be entitled to parachute payments over the following four seasons of at least £60m.
“The newly promoted clubs are often the bookies’ favourites to be relegated, but in every one of the past six seasons, at least two of the three promoted clubs have successfully retained their Premier League status in that crucial first season. Recent history also shows play-off winning clubs have nothing to fear; in the last three seasons not only have they all avoided relegation, they have also finished in the highest position of the three promoted clubs. The success stories of Swansea City and Crystal Palace should only serve as motivation for this year’s play-off winners.”
Over the past decade the value of promotion to the top flight has increased three-fold. This is largely due to the increase in broadcast income and greater parachute payments, both in terms of value and length.
Bull added: “The continued increase in the value of promotion to the Premier League provides newly promoted clubs the opportunity to make strategic investment on and off the pitch. Inevitably, the short term priority is usually investment in the playing side of the business, but clubs need to also look to the medium and long–term.”
After the end of the current season, the 23rd edition of the Deloitte Annual Review of Football Finance will be published, providing analysis of football’s finances in England and around Europe.
Finishing position for clubs in the first year following promotion to the Premier League
Note: Teams in bold avoided relegation in their first season following promotion to the Premier League.
Notes to editors
About the Sports Business Group at Deloitte
Over the last 20 years Deloitte has developed a unique focus on the business of sport. Our specialist Sports Business Group offers a multi-disciplined expert service with dedicated people and skills capable of adding significant value to the business of sport. Whether it is benchmarking or strategic business reviews, operational turnarounds, revenue enhancement strategies or stadium/venue development plans, business planning, market and demand analysis, acquisitions, due diligence, expert witness, audits or tax planning; we have worked with more clubs, leagues, governing bodies, stadia developers, event organisers, commercial partners, financiers and investors than any other adviser.
For further information on our services you can access our website at www.deloitte.co.uk/sportsbusinessgroup
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
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“The winners at Wembley on 24 May can expect a significant revenue increase in 2014/15, their first season following promotion to the Premier League." - Adam Bull, Senior Consultant