Queens Park Rangers chief executive Lee Hoos has defended the parachute payment system and says the salary cap he believes is necessary in the Championship must make allowances for teams adjusting to life back in the second tier.
English Football League (EFL) chairman Rick Parry has criticised the payments given to clubs relegated from the Premier League, describing them as “an evil which must be eradicated” and claiming they are one of the causes of wage inflation in the Championship.
A report from the Digital, Culture, Media and Sport committee published last month that looked at the impact of the coronavirus pandemic on sport agreed with Parry that parachute payments “must become a thing of the past”.
However, Rangers CEO Hoos says they are a vital lifeline for clubs who come down from the Premier League.
“When you come down from the Premier League, it’s very difficult in terms of trying to make the numbers work,” he told the PA news agency. “Even with pay reductions and relegation clauses in players’ contracts, you are still struggling to make ends meet. So if you’re looking at the number of clubs who get relegated and still suffer losses, you’ll see it’s the exception to turn a profit even with a parachute payment.”
Hoos favours the introduction of a salary cap at Championship level, but insists allowances must be made for clubs coming down from the Premier League. It has been reported that an £18 million cap has been proposed.
“You can’t punish people retrospectively, especially if, as the Premier League says, we don’t wish you to come up and pocket the money, we wish you to come up and add to the competition in the league. So, therefore, you are expected to sign players, you are expected to pay Premier League wages so that you can enhance that competition.
“From a competitive standpoint you need [promoted clubs] to be able to go out and sign players, but when they do come down, the parachute payment is a soft landing.”
QPR agreed a settlement with the EFL in 2018 after an arbitration panel dismissed the club’s claims that financial fair play rules were unlawful. Hoos and his management team have worked hard to reduce the club’s wage bill and now believes they are in a good position to work within a salary cap.
Cost controls are vital in the Championship, Hoos argues, though he thinks it is extremely unlikely a cap will be in place for the 2020-21 season.
“I would be shocked, because you would have to do something that football is not very good at, which is move quickly,” he said. “You’ve got 24 teams, and if you ask 24 teams you get 45 different opinions. It’s difficult to know where it is going to go. I would like to think common sense would prevail and where we have working models from other sports that we could actually implement.
“I just think that if football wants to survive, and be here in four or five years’ time in a similar format to what it is now, it has to get hold of this.”