Premier League parachute payments under review

Blackpool were relegated from the Premier League after a 4-2 defeat against Manchester United
Blackpool were relegated from the Premier League after a 4-2 defeat against Manchester United
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There is likely to be a review into the amount of parachute payments given to clubs relegated from the Premier League over fears the system is being misused.

The example of Blackpool was cited as an example after the club was accused of pocketing the money they earned from their 2010/11 season instead of investing in their squad to stay up.

The Seasiders spent only £3.5 million on new players when they moved up to the Premier League.

According to the Daily Mail, executive from the 'big six' clubs are questioning whether the payments of up to £90 million for relegated sides are not encouraging clubs to invest in players to make the league more competitive.

Informal discussions are expected to take place when chief executives meet at a Premier League shareholders meeting on Thursday.

Parachute payments were introduced to safeguard clubs who dropped into the second tier having spent heavily on transfer fees and wages. Amounts have risen rapidly in the last decade from £32m to the £91m earmarked over three years for clubs who are relegated.

Hull are also being cited as an example, selling Jake Livermore and Robert Snodgrass in January to record an overall transfer profit of £7.7 million since winning promotion.

Other clubs have been mentioned as ‘playing the system’ and not investing the payments.