Kieran Maguire makes ‘huge’ Leeds United claim as £90m payout looms
Leeds United will feel ‘huge benefits’ from £90million parachute payments if they are relegated to the Championship this season.
That is the view of finance expert Kieran Maguire, who exclusively told Football Insider why parachute payments are essential for relegated sides.
Football Insider revealed on May 4 that Leeds United are among a number of Premier League clubs who have made it clear that they are not willing to compromise on the future of parachute payments.
The Premier League and EFL are currently inching closer to an agreement that will change how money is distributed across the English football pyramid, with the EFL set to receive a larger share.
The EFL are also pushing for parachute payments to be scrapped, with the current terms providing relegated clubs £30million per season for three seasons when relegated to the second tier.
Maguire insists that parachute payments still have a place in football as they can help clubs such as Leeds to avoid administration after a demotion.
“Given that Leeds have a significant chance of relegation this season, parachute payments do give them a degree of certainty,” Maguire told Football Insider.
“It allows them to sign players while they’re in the Premier League on contracts which will have relegation clauses including a 25 per cent pay cut.
“Those clauses are harder to promise without parachute payments – it’s very difficult to attract a player with an 80% pay cut embedded into his deal.
“So Leeds will feel huge benefits from parachute payments should they be relegated this season, and it will allow them three years of acclimatisation in the Championship as they push to come straight back up.
“They’ll also be able to use payments in terms of not going into administration.
“That was the purpose of parachute payments in the first place.“
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