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Football League to increase relegation parachute payments

The Football League announces that it will distribute more money to clubs relegated from League Two in an attempt to prevent "financial trauma".

The Football League has announced that it will increase parachute payments to clubs relegated from League Two to the National League from 2016-17.

The two clubs relegated from the fourth tier of English football currently receive 50% of the equivalent Basic Award payment that League Two teams are given for a season in the division.

However, from the start of next season, they will instead be awarded 100% of that payment in their first year following relegation, and 50% the following year, unless instant promotion back to the Football League is achieved.

The Football League's chief executive, Shaun Harvey, revealed that this change was being made in an attempt to prevent clubs falling into "financial trauma" after losing their League status.

Harvey said: "In recent seasons we have seen a number of clubs suffer severe financial trauma following relegation from The Football League and in some cases fold altogether.

"As a result, it became increasingly clear that we needed to review existing arrangements and address our approach to managing the financial transition for clubs in these circumstances.

"I would like to pay tribute to our clubs for taking this decision. It is testament to their collective solidarity, given that the League's financial distribution formula means that the bulk of this money will come from funds that would otherwise be provided to Championship clubs, who are ultimately the least likely to benefit from it."

Dagenham & Redbridge and Yeovil Town currently occupy the two League Two relegation spots, with both clubs three points adrift of safety.

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A general view of Home Park ahead of the Johnstone's Paint Trophy second round match between Plymouth Argyle and Swindon Town at Home Park on October 7, 2014
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