Parachute Payments: Do Ipswich, Leicester and Southampton Hold an Unfair Edge?
With the Championship season underway, Ipswich Town, Leicester City and Southampton receive parachute payments that could give them a significant financial advantage. We examine the impact on competitiveness below.
Ipswich Town, Southampton and Leicester City aim to return to the Premier League this weekend—but does their access to parachute payments give them a built-in advantage?
Relegated from the top flight in May, these three are among just four Championship clubs set to receive parachute payments in 2025–26, alongside Sheffield United, who dropped down a season earlier.
What are parachute payments?
Parachute payments are annual solidarity funds paid to clubs relegated from the Premier League, designed to offset the sharp drop in TV revenue over up to three seasons. Supporters of the current model argue it helps relegated clubs remain competitive; critics say it deepens the divide across the English Football League.
Financial divide widens
Football finance expert Kieran Maguire warns the gap between parachute-backed clubs and others is growing.
- In 2014–15, relegated clubs averaged £31.8m in revenue, compared with £16.1m for non-relegated sides.
- By 2023–24, parachute clubs saw average revenues of £62.9m, while their rivals managed just £26.7m.
- Wage bills have ballooned from a £10.4m differential in 2014–15 to £43.3m last season.
- Squad values now average £157m for parachute clubs, versus £19m for the rest.
"This financial imbalance creates a cycle where promoted clubs struggle to compete and parachuted teams dominate the Championship," Maguire says, adding that the Premier League is increasingly turning into a closed shop.
Opportunities in the play-offs
Despite this, the race for play-off spots remains open: last season Sunderland, Coventry and Bristol City secured top-six finishes without parachute funds, and Sunderland claimed promotion via the final at Wembley. Clubs like Wrexham and Birmingham have also shown they can mount a challenge after recent promotions from League One.
Parachute payments risk entrenching a hierarchy that favours recently relegated clubs, making the Championship less meritocratic and harder for newly promoted sides to establish themselves.
This topic was reported by BBC Sport.
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