The Premier League’s parachute payments system has long been a lifeline for relegated clubs, but to many inside the EFL, it’s become a symbol of an uneven playing field.
Designed to soften the financial crash of relegation, these payments now raise a fundamental question: are they safeguarding sustainability or undermining competitive balance?
Are Parachute Payments Fair or Do They Create an Uneven Playing Field?
Parachute payments were introduced with good intentions to help clubs adapt financially to the huge revenue gap between the Premier League and the Championship. Yet over time, the system has created a chasm that increasingly dictates who challenges for promotion and who merely survives.
Relegated clubs can receive millions across several seasons, dwarfing the broadcast and commercial income available to the rest of the division. In practice, it means the battle for the Premier League often begins before a ball is kicked, with budgets and wage bills defining ambition long before performance does.
The effect is visible in recent years. Teams like Leicester City, Leeds United, and Southampton have been able to retain international-standard squads after relegation, while rivals such as Preston North End or Bristol City operate on fractions of their budgets.
💰 Championship teams in receipt of parachute payments have obvious & significant advantage in promotion race.
But for Rob Edwards, #Boro should always be aiming to compete at the top…
🗣️ ‘When you’re as big as we are, you should always have a chance’https://t.co/x28k52nP1H
— Dominic Shaw (@DomShawEcho) October 15, 2025
The financial disparity is vast and it shows in the table. Clubs with parachute payments regularly occupy promotion places, while many others are forced to gamble on spending they cannot sustain simply to compete.
This imbalance doesn’t just distort competition; it also skews the EFL’s identity. The Championship has always prided itself on unpredictability, but that narrative has been eroded by an economic structure that rewards failure at the top more than success below it.
There is a flip side. Those clubs that waste parachute payments can become basket-case clubs, chasing the previous highs without the means to do so. Currently, the likes of West Brom and Middlesbrough have firttered payments away, while some unscrupulous owners, such as those at Blackpool, treat the payments like a personal cash machine, not a mechanism to get back into the top flight.
Why It’s Controversial
The controversy is rooted in both scale and duration. A club dropping out of the Premier League can receive around £45–50 million in their first year, followed by further payments over two subsequent seasons if they fail to return. By contrast, a club finishing mid-table in the Championship may earn under £10 million from central distributions. That disparity changes everything: from recruitment and facilities to the ability to keep hold of star players.
There are no clubs in the bottom three of the Premier League who were promoted last season and none of the top six in the Championship were relegated last season or in receipt of parachute payments pic.twitter.com/0v4KubReZO
— Kieran Maguire (@KieranMaguire) October 21, 2025
Smaller clubs argue that the system effectively ring-fences the Premier League. Relegated sides become favourites for promotion not just because of squad quality but because the financial parachute lets them absorb risk others can’t. They can take transfer gambles, hire elite staff, and still meet Profit and Sustainability rules that smaller clubs breach with a fraction of the spending.
The defenders of parachute payments point to the financial trauma of relegation, with the loss of broadcasting income that can exceed £100 million in a single year. Without those funds, they argue, relegated teams would face mass redundancies or even insolvency.
That concern is valid, but it exposes the deeper issue: a football economy so inflated that normal financial discipline can no longer survive without Premier League money.
Even within the EFL, frustration has turned to resignation. Managers and chairmen talk openly about a “two-tier Championship,” one group chasing promotion and another simply fighting for survival. The middle ground has disappeared, replaced by a reality where ambition without backing is seen as naïve.
Financial Fairness, Competition Balance, and Sustainability
The financial fairness debate is not about denying clubs a safety net; it’s about redefining what fairness looks like. The EFL’s call for a fairer distribution of top-flight income has been consistent, yet the Premier League’s resistance has been equally firm. The argument is circular: Premier League clubs claim parachute payments are essential, while Championship clubs insist they’re destructive. Meanwhile, the gulf keeps widening.
Competition balance suffers the most. For every Luton Town story, a club rising from League Two to the top flight through good coaching and shrewd planning, there are dozens more blocked by structural inequality. It’s telling that of the last 15 clubs promoted to the Premier League, the majority had either parachute payments or had recently received them. That’s not a coincidence; it’s economics.
Luton are interesting. They got parachute payments, but were immediately relegated from the Championship. They’re now in League One (and struggling) but are still getting payments. It’s like a heavyweight boxer dropping into bantamweight and still being allowed to fight. The fact they’re a bit rubbish id remarkable!
There’s also the question of sustainability. Smaller clubs are encouraged to spend beyond their means to keep up, often leading to financial distress. Derby County’s collapse, Reading’s points deductions, and Wigan Athletic’s crises all underline the danger of an ecosystem where stability is punished and risk is rewarded.
🚨 NEW Podcast 🚨
With football finance expert @KieranMaguire – Is the #EFL pyramid unsustainable? 🎙️
▪️ Scrapping FA Cup replays
▪️ Parachute payments discussion
▪️ #QPR‘s financial situation
▪️ #BAFC and #RUFC leading the way
▪️ Much, much more 👇https://t.co/9I6xftK4sq— The Real EFL (@RealEFLSocial) April 24, 2024
Some reform proposals have emerged. The idea of replacing parachute payments with a “solidarity model”, distributing funds more evenly across the EFL, has been floated by figures including Rick Parry and several club owners. Others have suggested a single-year payment, allowing relegated teams to adjust without maintaining a long-term advantage.
But any meaningful change requires Premier League consent, and that’s where progress stalls. The top flight’s commercial independence means the EFL can only negotiate, not legislate. Until that balance of power shifts, parachute payments will continue to protect those falling from above while leaving those climbing from below exposed.
Football has always been about competition, not compensation. If the system rewards the relegated more than it supports the resilient, the gap between the haves and have-nots will only grow wider. The question is not whether parachute payments are fair in theory, but whether they still serve the game in practice.
Right now, the evidence suggests they do not.
