£83 million at stake
When teams are relegated from the Premier League they receive something called parachute payments.
These are financial packages given to them by the Premier League to effectively help them cope with the monetary problems faced by relegation.
The income differences between England’s top tier and those below it are significant.
It is often why teams who are promoted from the Championship struggle and often see themselves immediately return to the second tier.
WATFORD, ENGLAND – JANUARY 04: Roberto Pereyra of Watford holds off David Perkins of Tranmere Rovers during the FA Cup Third Round match between Watford FC and Tranmere Rovers at Vicarage Road on January 04, 2020 in Watford, England. (Photo by Julian Finney/Getty Images)
Strangely, despite these payments, clubs who are relegated struggle to immediately promote themselves up as easily as some find themselves returning back down.
This though has not been the case during this season. Both Watford and Norwich City have been promoted back to the Premier League at the first time of asking.
This means that the staggered parachute payments which were set to be paid to the clubs will no longer apply from this point on.
The Telegraph claim that a total of £83 million is set to be saved thanks to Norwich (£34m) and Watford (£49m) respectively.
EFL want a share
This could be set to increase even further should Bournemouth, who will be involved in the play-offs, also get promoted. An additional £49 million would be saved.
Swansea City are still due money from parachute payments and should they win the play-offs, £15 million would be saved by the Premier League.
The EFL are set to repeat their request which was denied last season relating to these payments. With Fulham’s promotion, the EFL asked for a share of the £34 million saved by the EPL. This was rejected.
With a possible record amount this year being saved, a figure which could reach £132 million, the EFL will request to have a share given to them once again.
Their aim is to close the gap between the financial might of the EPL and themselves.
WEST BROMWICH, ENGLAND – JULY 22: Matheus Pereira, Grady Diangana, Matt Phillips, Kamil Grosicki and Filip Krovinovic of West Bromwich Albion celebrate promotion to the Premier League on the pitch at the end of the Sky Bet Championship match between West Bromwich Albion and Queens Park Rangers at The Hawthorns on July 22, 2020 in West Bromwich, England. Football Stadiums around Europe remain empty due to the Coronavirus Pandemic as Government social distancing laws prohibit fans inside venues resulting in all fixtures being played behind closed doors. (Photo by Adam Fradgley – AMA/West Bromwich Albion FC via Getty Images)
The EFL chairman Nick parry told the Telegraph that he wants to see an end to parachute payments in addition to more money being provided through TV revenue streams.
“We want 25 per cent of the total TV revenue, we want an end to parachute payments, we want a narrowing of the cliff edge between the Championship and the Premier League, because our watchword, our entire focus, is on sustainability,” he said.
It does make a lot of sense for the parachute payments to be scrapped because they effectively, despite the lack of immediate returners, provide an unfair advantage.
These payments encourage quick promotion back again to the Premier League and make it that much more difficult for clubs that have never reached the heights of England’s top tier in recent times, therefore never benefitting from the huge TV revenue of the modern game.
Whether the Premier League, after their condemnation of the Super League last week, decide to be more open to a revenue share with the EFL is yet to be seen.