PSL’s relegated teams to lose R64 million grant

Free State Stars were condemned to the National First Division at the weekend following their defeat to eventual Absa Premiership champions Mamelodi Sundowns, but just how big is the financial impact of being relegated?

The Bethlehem-based outfit had their status as a top-flight team taken away after their narrow 1-0 loss to Downs at Goble Park on Saturday afternoon, confirming the fears of the Mokoena family that they would return to the NFD just as they could not avoid the axe back in 2006.

Our source estimates relegation to cost the club around R64-million, and it is likely Stars will sell most of their top players to survive life without the Premier League’s multimillion hand out.

By being in the highest division in SA football, clubs receive a share of R30-million per annum from the SuperSport broadcast deal as well as R2.5-million a month as a grant from the league. Added to that is an ex gratia payment of R4-million that Premier League teams receive at the beginning of the season to help them prepare for the start of a new campaign.

Many of the clubs have confirmed to the us previously that the distribution of these amounts has been the saving grace for many of them, especially those without main sponsors, like Stars.

In the NFD, the monthly grant is R433 000 and the ex gratia payment is limited to R1.5-million, which can either be paid once-off or over the course of the season. This means Stars will go from receiving a R63-million grant to a little over R6-million as they begin life in the NFD.

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