Rick Parry, the English Football League (EFL) chief, has warned that there is a “major concern” about the widening gap between clubs receiving parachute payments and the rest of the Championship. Research conducted by Sheffield Hallam University for the EFL concluded that clubs receiving parachute payments are three times more likely to be promoted than other clubs. Parry has expressed his disappointment with the Premier League’s stance on the issue and has written to MPs to challenge some of the statements made by Premier League boss Richard Masters.
Parachute payments are a series of solidarity payments the Premier League makes to relegated clubs, for up to three years, to help them adapt to reduced revenues back in the Championship. The report found that clubs received £233m in parachute payments in the 2020-21 season, an average of £33m per club, and that clubs without parachute payments had an average revenue of circa £20m. The average points gap over the five seasons for clubs in receipt of parachute payments was +8.6, and the average finishing position in the league table for parachute-payment clubs during the five-year period was ninth. 22% of clubs in receipt of parachute payments were promoted to the Premier League, rising to 29% last season, and if Sheffield United join Burnley in the Premier League next season, that will rise to 40%.
The Premier League has questioned the research, such as what impact the “natural size” of clubs would have on the data. Parry has urged the Digital, Culture, Media and Sport (DCMS) select committee to give the issue “further scrutiny”, and Julian Knight MP, chair of the committee, has said that this study “gives the lie to any suggestion from the Premier League that parachute payments are not having a distorting effect on competition for those trying to reach the top flight’s promised land”. Fans have expressed their views on parachute payments, with some believing they are essential to ensure teams promoted to the Premier League are given the opportunity to make a proper go of it, while others feel they are making the rich clubs richer and the poor clubs poorer. It is clear that parachute payments are a contentious issue, and it remains to be seen how it will be addressed by English football’s new independent regulator.