Premier League parachute payments have gone too far

Relegation should hurt. It shouldn't kill a club, and I've never argued that a squad built for the Premier League can carry on as normal on Championship money overnight. Some protection is fair. What we've got now isn't protection, it's a head start, handed to a few clubs a year in a division where everyone else is told to live within their means.

The Premier League pays relegated clubs for up to three years so they can adjust to a Championship with far less TV money. Fine as an idea. The problem is the size of it.

The numbers the EFL sent to Parliament

The EFL set this out in written evidence to the Football Governance Bill committee. In 2024/25, a first-year parachute club got £48.9m. A Championship club without parachute money got £5.379m in solidarity. The EFL puts the gap at more than £43.5m, and I sat looking at the smaller figure for a while, because that's the number a club is supposed to compete on. By year three the parachute is down to £17.8m, and £17.8m doesn't look small to me.

The EFL also points to Dr Wilson's updated research, covering 2016/17 to 2020/21, which found parachute clubs had become three times more likely to be promoted than non-parachute clubs. Three times. Promotion is meant to reward a club for building something good, not for having been in the Premier League eighteen months ago.

Where the money actually goes

Kieran Maguire's numbers, via BBC Sport, have parachute clubs averaging £62.9m in revenue in 2023/24 against £26.7m for the rest of the Championship. The wage-bill gap that same season had reached £43.3m. That's where I think the money does most damage to the competition. "They've still got to play the games" isn't a decent answer to a wage gap like that.

What it does to everyone else

If you run a Championship club with no parachute money and an owner who wants promotion, the maths pushes you somewhere daft. You can't out-recruit a wage bill that size by being clever in two transfer windows a year. If an owner stretches once, the temptation is to stretch again. Get it wrong and the supporters who signed nothing off carry the punishment.

I don't think the distortion stops after one season either. A club that goes down with parachute money coming in can afford to try keeping something close to a Premier League team. The club racing it may decide it has to sell in July to balance the books. Same league, same prize in May, and a completely different game.

The new season starts with Wolves at home to Blackburn on Friday 14 August, and Burnley host West Ham two days later. Relegated against relegated on the opening weekend. A Friday night opener as well, obviously. Whoever signs those off has never had to get home from one. Anyway.

The regulator's turn

The Independent Football Regulator said on 20 January that parachute payments will be examined as part of its State of the Game report, along with how money moves around the pyramid more widely. It can impose a settlement on the Premier League and the EFL if those two can't agree one between them. It should be ready to.

The Premier League sees the payments as essential because they give promoted clubs the confidence to invest, with some protection from the shock of going down. I get that argument. I don't accept that it justifies a gap this big, running this long, for clubs already carrying a built-in edge.

So cut most of it. Push the money down as solidarity across the EFL instead, and put controls on it. The EFL has argued that any increase should be felt "on the balance sheet, rather than on the team sheet". Apply the same test to whatever transition support survives. Show the regulator a relegation budget that stands up. Put relegation wage terms into contracts before the season starts. Then you get help with the fall. A club won't enjoy writing those terms. Tough.

A first draft of the report is due later this year, with the final version in spring 2027. When the draft lands I'll go straight to the part about conditions. If the money still arrives with nothing attached to it, the clubs chasing that gap will carry on spending what they haven't got, and we'll be reading about the consequences long after 2027.