Why Relegation For Leicester City This Year Won’t Be A Disaster

Eight years ago few gave Leicester City hope of staying in the Premier League.

Having won just four games all season, the team from England’s east midlands approached the last full month of action needing near-maximum points to guarantee survival.

Managed by Nigel Pearson, the side was back in the top flight after a ten-year absence and it looked like a step too far.

Players like Jamie Vardy and Wes Morgan might have powered the club to the second division crown, but in the top league, it wasn’t going to plan.

Then, something remarkable happened.

With just four minutes remaining in a home game against West Ham United that had been petering out into another rather unhelpful 1-1 draw, a thumping header from striker Andy King dramatically earned the club three points.

This was followed by an even more remarkable turnaround in the following game against West Bromwich Albion, where a 2-1 deficit on 80 minutes was transformed into a 2-3 victory.

Another two wins against Swansea and Burnley followed making survival suddenly a very real possibility.

However, after a 1-3 defeat to Chelsea, it appeared as if things might have taken a turn for the worse, Pearson lost his cool in the post-match press conference and accused a journalist of being an “ostrich” after the reporter asked the coach to provide examples of the criticism he felt his side had suffered.

It was understandable if the pressure was getting to Pearson, back in 2015 relegation for the Premier League could start a decline that was difficult to reverse.

In the previous three seasons teams such as Bolton Wanderers, Blackburn Rovers, Wigan Athletic and Reading had all dropped out of the league and never returned.

Leicester City knew how difficult it could be. In the preceding decade outside the top flight had suffered a further demotion to League 1, so there was no guarantee things wouldn’t get worse.

Fortunately for the Foxes, it turned out Pearson wasn’t losing his way, the remaining two games were won comprehensively and the team stayed up with ease.

The acquisition of 20 points from the final 24 available was a remarkable feat but, as almost everyone is aware, an even better achievement followed.

The next season, despite Pearson being fired in favor of Claudio Ranieri, the club won the Premier League title.

It was the start of the most glorious period in the club’s history, an era when the side has been consistently in the top six, winning an FA Cup and Charity Shield.

The halcyon days came to an abrupt end this season when, despite having a wealth of talent at the club’s disposal, Leicester City finds itself once again in the relegation zone.

Fortunately for the Foxes, this is not a scenario comparable to 2015, only one point separates the side from safety, but more fundamentally relegation is no longer as cataclysmic disaster as it was eight years ago.

The way it used to be

One of the main reasons why clubs such as Bolton Wanderers and Blackburn Rovers sank from the division in the early 2010s and never returned was because the solidarity parachute payments handed down by the Premier League were far less generous.

The two Lancashire sides were handed just $13.1 million a piece to mastermind a return to the top flight, after a year they got no more.

In the case of Bolton, years of living beyond its means had left a playing squad that was barely able to compete in the division below, the parachute payment hardly scratched the surface of the issues at the club.

Arguably one of the case studies which supports the current three years of support teams currently receive, Bolton suffered terribly from the loss of Premier League revenue.

In the decade since it was relegated, the club has suffered demotion to the third tier twice and even dropped as far as League 2. The huge debts accrued from its time in the Premier League created a situation where, on more than one occasion, the club has been on the brink of going out of business.

Blackburn Rovers were in slightly better shape financially than its rivals from north west England and invested more than $10 million on proven Championship striker Jordan Rhodes when it went down.

But it still had to make cuts which affected the chances for promotion, its most impressive midfielder Steven Nzonzi was sold as was star winger Junior Hoilett.

The team struggled and, once the single-year solidarity payment was done, had the same financial limitations as every other team in the division.

The legacy of Premier League spending also cast its shadow over Blackburn Rovers, which was demoted to League 1 mid-way through the 2010s too. Until last season, the club has rarely ever looked like returning to the top flight.

A soft landing

Unlike the team of 2015, the outlook facing the current Leicester City side is far less terrifying.

Clubs can bank on three years of much more generous handouts from the Premier League.

Demoted teams like, hypothetically Leicester City, can rely on 55% of the value of the broadcasting rights each Premier League receives in the first year, 45% in the second and 20% by the third.

That currently stands at close to $100 million extra in revenue across the first two years of a relegation.

The advantage those years of seriously elevated earnings provide demoted teams is evidenced in the fact we are seeing fewer and fewer teams even receive the third payment, so regularly do clubs bounce back within two years.

You have to go all the way Huddersfield Town and Cardiff City relegated in 2018/19 to find the last sides to get all three payments, since then, everyone else has been promoted before the solidarity arrangement reaches its final year.

This year the two teams already out of the division, Burnley and Sheffield United, are in their first and second year of the payments.

Burnley arrived in the division in financial circumstances which were far from ideal, but have still been considerably better than everyone else.

The need to sell off talent which could bolster a promotion push is simply not as it was, nor is the need for success in the first season.

Those who fail the first time around can simply have another shot.

A team like Leicester City or indeed Everton would be significantly better than everyone else should they drop down, this advantage will not be affected by a need to sell.

So whilst the Foxes will want to avoid it, relegation won’t be the end of the world.