ThePremier League distributes a formulaically derived financial payment to eachEnglish Football League (EFL) club every season. There are two mechanisms with which funds are calculated and distributed; these are known as "Parachute Payments" and "Solidarity Payments". The payments are linked to the value of thePremier League’s broadcasting rights. In the2017–18 season thePremier League paid £243m in Parachute Payments split amongst 8 clubs,[1] and £100m in Solidarity Payments split amongst the remaining 64 clubs.[2] This compares to £88m of UK TV revenue the EFL distributed to its 72 clubs for the2017–18 season.[3]
Before theFoundation of the Premier League in 1992, monetary distribution of television revenue was split between the top four divisions, with half paid to First Division clubs (equivalent to thePremier League); 25 percent to Second Division clubs (equivalent to theEFL Championship), and 12.5 percent paid to each of the bottom two divisions (equivalent toEFL League One andEFL League Two). Until the 2006-07 season the Premier League did not share any of their broadcasting revenue with theEnglish Football League other than £4m a year for youth development, and participating in theEFL Cup which added value to theEnglish Football League television deal.
In the 2006-07 season "parachute" payments were introduced which meant for two seasons following relegation a club would receive half of the per clubPremier League basic TV money, this would lower the risk of a club going intoadministration due to the high cost base (mainly player wages) they incurred in thePremier League. In addition "solidarity" payments from the Premier League worth £1m were paid to eachEFL Championship club to help mitigate concerns about the impact the parachute payments might have to the competitive balance of the league.[4] The structure and value of the "parachute" and "solidarity" payments have continually evolved since then.
ThePremier League splits the UK broadcasting income into 3 categories. 50 per cent equally shared betweenPremier League clubs; 25 per cent shared based on how often a club’s matches are broadcast in the UK (known as "Facility Fees"); and 25 per cent shared based on where a club finish in the league table (known as "Merit Payments").[2]
Overseas broadcasting income is currently split equally betweenPremier League clubs.[2]
Payments toEFL clubs are linked only to the equally shared element of the broadcasting income (i.e. 50% of UK income, and 100% of Overseas income).[5]
Parachute payments are unique to the English game and currently see clubs relegated from thePremier League receive a percentage of the equally shared element of broadcasting rights each Premier League club receives. This percentage drops progressively over a three-year period – 55% in the first year, 45% in year two and, if the club was in the Premier League for more than one season before relegation, 20% in the third year. (However, if a club is only in the Premier League for one season, it will not receive the 20% share in the third year) This system was introduced for clubs relegated in 2015/16 onwards, with the previous system having a similar structure but with payments spread over 4 years.[6] If a club is promoted back to the Premier League during the parachute payment period, then no more parachute payments will be made. Therefore, all three teams relegated in a given year will receive a 55% share of 1 equal share in the first year of relegation (i.e. the Championship). However, if any of these three teams are promoted after one year in the Championship (back to the Premier League), then such team(s) will not receive 45% of one share in parachute payments for the 2nd year (because the team(s) will earn a one share as one of the 20 teams of the EPL)[7]
| Club | Season Relegated | 2015–16 (million)[8] | 2016–17 (million)[9] | 2017–18 (million)[1] | 2018–19 (million)[10] | 2019–20 (est.) (million)[11] | 2020–21 (est.) (million)[12] | 2021–22 (est.) (million)[13] | 2022–23 (est.) (million)[14] |
|---|---|---|---|---|---|---|---|---|---|
| Bolton Wanderers | 2011–12 | £10.5m | |||||||
| Blackburn Rovers | 2011–12 | £10.5m | |||||||
| Wolverhampton Wanderers | 2011–12 | £10.5m | |||||||
| Reading | 2012–13 | £10.5m | £16.3m | ||||||
| Wigan Athletic | 2012–13 | £10.5m | £16.3m | ||||||
| Cardiff City | 2013–14 & 2018–19 | £20.8m | £16.3m | £16.6m | £41.3m | £35.5m | |||
| Fulham | 2013–14, 2018–19, 2020–21 | £20.8m | £16.3m | £16.6m | £41.3m | £44.4m | |||
| Queens Park Rangers | 2014–15 | £25.9m | £31.1m | £16.6m | £17.0m | ||||
| Burnley | 2014–15 & 2021–22 | £25.9m | Promoted (£0) | £44.4m | |||||
| Hull City | 2014–15 & 2016–17 | £25.9m | Promoted (£0) | £41.6m | £34.9m | ||||
| Newcastle United | 2015–16 | £40.9m | Promoted (£0) | ||||||
| Aston Villa | 2015–16 | £40.9m | £34.0m | £15.9m | |||||
| Norwich City | 2015–16, 2019–20, 2021–22 | £40.9m | £34.0m | £43.1m | £43.4m | £44.4m | |||
| Sunderland | 2016–17 | £41.6m | £34.9m | £15.0m | |||||
| Middlesbrough | 2016–17 | £41.6m | £34.9m | ||||||
| Swansea City | 2017–18 | £42.6m | £33.8m | £15.8m | |||||
| Stoke City | 2017–18 | £42.6m | £33.8m | £15.8m | |||||
| West Bromwich Albion | 2017–18 & 2020–21 | £42.6m | £33.8 | £44.4m | £36.3m | ||||
| Huddersfield Town | 2018–19 | £41.3m | £35.5m | £16.1m | |||||
| Bournemouth | 2019–20 | £43.4m | £36.3m | ||||||
| Watford | 2019–20 & 2021–22 | £43.4m | £44.4m | ||||||
| Sheffield United | 2020–21 | £44.4m | £36.3m) | ||||||
| Total | £171.8m | £219.0m | £242.6m | £265.2m | £240.0m | £232.0m | £185.6m | £177.0m |
TheEFL also operates a Parachute Payment system within the EFL Leagues and theNational League. From the 2016-17 season onwards payments are:
Clubs within theEFL who are not eligible for Parachute Payments receive Solidarity Payments. These are calculated as a percentage of the third year Parachute Payment amount a club relegated from thePremier League would receive (currently 20% of the equally shared element ofPremier League broadcasting rights). This percentage drops progressively for each EFL league – 30% in theEFL Championship, 4.5% inEFL League One, and 3% inEFL League Two.[6]
| League | 2018–19 Per Club (million)[1] | 2018–19 League Total (million) |
|---|---|---|
| EFL Championship | £4.65m | £79.1m |
| EFL League One | £0.70m | £16.1m |
| EFL League Two | £0.47m | £11.2m |
| Total | £106.3m |
From 2019–20, the current level of revenue from international TV rights sales will still be shared equally between all 20Premier League clubs. Any increase on that level, will then be distributed according to where a team finish in the league. As the Parachute and Solidarity Payments are linked only to the equally shared element of TV rights, any increase of international TV rights is likely to have little benefit toEFL clubs.[5]
There are several concerns often raised around the structure and amount of the payments. These generally relate to the perceived level of fairness, and the impact on the competitive balance of the second tier (EFL Championship). Concerns often raised include:
