Dundee United will bank a maximum of £300,000 as a parachute payment following their relegation from the Premiership.
The Tangerines are counting the cost of a disastrous campaign as they prepare for at least one season in the Scottish Championship.
And while the financial realities of life in the second tier will be inevitably stark, the SPFL do provide a slight financial cushion, as outlined in their Articles of Association.
To cover their first season in the Championship, United will be due “the lesser of £300,000 and 2.43% of the (SPFL’s) Net Commercial Revenues”.
As a reference point, Courier Sport has seen documentation showing the SPFL’s Net Commercial Revenues for the 2021/22 campaign was £8,500,000.
So, 2.43% of that would be £206,550.
As such, barring a massive upsurge in the SPFL’s income from broadcast partners and sponsors since then, United will receive less than £300,000.
Should the Tangerines remain in the Championship for a second season, they will receive another modest sum — “the lesser of £125,000 and 1.01% of the Net Commercial Revenues”.
Again, using the 2021/22 season as a reference point, the latter would have been the relevant amount: £85,850.
Ross County’s parachute
Relegation via the playoffs, albeit a similarly galling outcome, would have been a more lucrative proposition.
Should Ross County succumb to the drop in their playoff final against Partick Thistle, the Highlanders’ parachute payment is guaranteed to be £500,000 in the first season down.
They would receive £250,000 in the subsequent campaign if they fail to bounce back at the first time of asking.
Financial challenges
United’s most recent published accounts — for the year ending June 2022 — stated: “The principal risk to the business is the possibility of the team being relegated to the Championship again.”
Owner Mark Ogren has reaffirmed his commitment to the club, but the Tangerines will undoubtedly face financial challenges.
Those accounts show a wage bill of £5.9 million; a more manageable figure in light of the £8.3 million turnover brought about by strong on-field performances, player sales and gate receipts.
That salary figure was before United’s summer signing spree in 2022, so does not include the likes of Dylan Levitt, Mark Birighitti, Steven Fletcher and Aziz Behich.
Top-flight football was crucial in order to make that outlay feasible and it is inconceivable that the club will not seek to address costs in the coming months — even as Jim Goodwin attempts to build a squad fit for promotion.
As a reference point, in the Tangerines’ most recent non-Covid affected (in order for a fair comparison) campaign in the Championship in 2018/19, their turnover was £3.1 million.
Ogren has already invested around £13 million since his takeover in 2018 and, in order to make the maths work, the American businessman may be forced to dip into his fortune once more.
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