Baroness Brady (Con)

As the noble Lord pointed out, wages have increased. Newly promoted Premier League clubs have an average wage bill of £115 million and transfer fees have gone through the roof. That is why the costs are fixed. If a club is relegated, it cannot terminate its players’ contracts; they are honoured, as clubs are obliged to pay those contracts. The parachute payment helps soften that blow. Parachute payments put restructuring responsibly at the forefront of clubs’ minds. Relegated clubs have to sell players, but they also have to buy players, reduce their wage bill and recalibrate costs to adapt to life in the Championship. What these payments really do is help clubs avoid wholesale disinvestment, panicked fire sales or, worse, administration. Parachute payments work. They do not distort competition; they enable it. That is why versions of parachutes are used all over Europe and throughout the EFL system. Clubs such as Brentford, Brighton, Nottingham Forest and Crystal Palace have all demonstrated that well-run, innovative clubs can rise through the Championship without parachutes and build competitive, successful teams in the Premier League. Parachute payments are a stabiliser for relegated clubs, not a barrier to promotion. Without these payments, the competitive balance, investability and appeal of both the Premier League and the Championship would be put at risk. Investors in the Championship recognise that parachute payments provide the essential scaffolding for strategic investment. These payments enable clubs to build towards promotion with confidence, knowing that there is a safety net. Parachute payments create the conditions for clubs to invest in players, infrastructure and long-term strategic plans, with the assurance that one challenging season in the Premier League will not unravel their progress and render all that investment worthless.