When Hull City was last relegated in 2014/15 from the Premiership it saw turnover from Hull City decreasing by £25m in 12 months and with the betting to get promoted to the premiership next season at 3/1 you back this and many more football bets with one of the leading football bookmakers, which will not be positive news for Hull City Fans.
The £25million it cost in 14/15 could be a lot more as they might not be lucky enough to bounce straight back to the premier league. Because everyone knows it can be impossible ask some Leeds Utd or Sheffield Wednesday fans.
“Turnover has decreased substantially from £90m to £65m with the club moving into the Championship,” Allamhouse said in a report following an audit of the company up to December 31, 2015.
“Continued investment has been made in the club and the team continues to perform well.
“The company continues to operate the stadium for both football and rugby together with the arena for mixed sporting and entertaining events. Improvement of the stadium facilities has continued, with an excess of £2.5m being spent on infrastructure.
“At a trading level sales were down by 20 per cent, due to the football club moving into the Championship.”
One has to think that the downfall of Hull City started back in July when Steve Bruce was sacked when he fell out with vice-chairman Ehab Allam and Mike Phelan was but in charge, he only won one of the next 18 league games after winning the manager of the month award in August when he got two wins. He was eventually sacked in January but the damage was done and Hull was unable to fight off relegation and the 4-0 defeat to Crystal Palace on Monday was the final nail in their coffin.
Although the Premier League clubs wanted to create a massive financial gap with the Football League, they retained relegation and promotion. They recognised relegated clubs would have much less income but still have players on contracts earning Premier League wages. So the Premier League agreed to pay relegated clubs “parachute payments” to give them more income to pay those wages until the contracts ended.
Relegated clubs receive four years of parachute payments: £25m in the first year, £20m the season after, £10m in the third year, £10m in the fourth.
That £65m total obviously eases the impact of relegation for those individual clubs. However, in past seasons, many have had such high wage bills that despite the parachute payments they have suffered financial difficulties. The parachute payments are also resented by other clubs in the Championship, who receive only £3m in TV and “solidarity” money.
Steve Bruce had said that Hull’s player contracts agree a “huge reduction” in salary if they fall into the Championship, with most players’ wages dropping 40% or 50%. That does help to compensate for the drop, and is seen as prudent. Newcastle have not said whether they have drop clauses in their high-earning player contracts, but John Carver has said backroom staff could lose their jobs, which suggests relegation would be a severe financial blow.