Relegation from the Premier League has severe financial consequences for clubs who drop into the Championship. However, they’re not always immediate, and the help of parachute payments typically aids forward-thinking clubs in staying on the right side of profit and sustainability rules (PSR) for the three seasons they are available.
In Burnley's case, however, time is slightly more pressing as the Clarets were only in the Premier League for one season after promotion, meaning that they will receive parachute payments for two seasons and not three.
In short, Burnley will have to either go up in 24 months or begin finding ways to fund a side capable of achieving promotion with drastically reduced resources. This isn’t a doomsday scenario though as clubs have found ways to build promotion-winning squads without relying solely on cash flow.
Alternative ways of paying
The inescapable reality is that all relegated clubs - and not just Burnley, have to get quite creative with their finances after a second season in the Championship ends without promotion. In other words, they have to find alternative ways of paying for new additions to the squad.
To draw a parallel, consider real-life examples such as flights paid for with Air Miles, hotels that accept Bitcoin, or even online casinos that accept PayPal. These examples highlight the various ways money can be moved around to acquire a service without direct cash transactions.
In the football industry, clubs can adopt similar innovative approaches. One effective strategy is player swaps, which can assist in amortising transfer costs and removing large wages from the books while still adding quality to the dressing room.
Ultimately, the wider point is that by creatively managing their resources, relegated clubs can maintain competitiveness and work towards promotion even with financial constraints.
Putting their faith in Parker
The encouraging news is that this isn’t Burnley’s reality just yet. Instead, the club’s owners ALK Capital will be hoping that new head coach Scott Parker can make the most of a healthy transfer budget by returning the Clarets to the Premier League at the first time of asking.
Further positive news is that Parker has two promotions on his CV already after guiding Fulham and Bournemouth to the Premier League.
Essentially, Parker is not an unknown quantity and has a track record for delivering promotions. So, can he take the Turf Moor outfit back to England’s top flight before the financial hourglass runs out?
At 15/8 in the latest outright promotion market, it would be fair to say that the expectation from the bookies is that Parker will take this Burnley side up sooner rather than later.
Time is ticking
One point to consider, however, would be that fallout does also tend to follow Parker around. This was the case at Fulham and especially Bournemouth where Parker was fired three days after a 9-0 drubbing against Liverpool at Anfield.
Parker used his post-match press conference to lambaste the owners for their lack of investment which resulted in a swift dismissal 72 hours later.
The Cherries were rooted to the floor of the Premier League at the time and relegation looked inevitable but Gary O’Neil pulled off the impossible by staving off the dreaded drop. The resulting suggestion was that perhaps the squad wasn’t as poor as Parker had made out and instead, the pressure of the job got to him.
This isn’t to say that the same will happen at Turf Moor, but that Parker - a very decent manager, will be coaching in an environment where the sound of a ticking clock will only get louder.
Yes, there is some margin for error, but not much before Burnley will have to usher in a new era of austerity.
