Premier League parachute and solidarity payments
   HOME

TheInfoList



The
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
distributes a formulaically derived financial payment to each
English Football League The English Football League (EFL) is a league of professional football Football is a family of team sport A team is a Premier_League The_Premier_League,_often_referred_to_as_the_English_Premier_League_or_the_EPL_(legal_name:_The_Football_Association_Premier_League_Limited),_is_the_top_level_of_the_English_football_league_system The_English_football_league_system,_also_...
’s_broadcasting_rights._In_the_2017–18_Premier_League.html" ;"title="roup (disambiguation), group of individuals (human or non-human) working together to achieve their goal. As defin ...
(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 the
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
’s broadcasting rights. In the 2017–18_season_the_Premier_League The_Premier_League,_often_referred_to_as_the_English_Premier_League_or_the_EPL_(legal_name:_The_Football_Association_Premier_League_Limited),_is_the_top_level_of_the_English_football_league_system The_English_football_league_system,_also_...
_paid_£243m_in_Parachute_Payments_split_amongst_8_clubs,_and_£100m_in_Solidarity_Payments_split_amongst_the_remaining_64_clubs._This_compares_to_£88m_of_UK_TV_revenue_the_EFL_distributed_to_its_72_clubs_for_the_2017–18_English_Football_League.html" ;"title="2017–18 Premier League">2017–18 season the
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
paid £243m in Parachute Payments split amongst 8 clubs, and £100m in Solidarity Payments split amongst the remaining 64 clubs. This compares to £88m of UK TV revenue the EFL distributed to its 72 clubs for the 2017–18_season.


_History

Before_the_Foundation_of_the_Premier_League.html" ;"title="2017–18 English Football League">2017–18 season.


History

Before the Foundation of the Premier League">2017–18 English Football League">2017–18 season.


History

Before the Foundation 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 the
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
); 25 percent to Second Division clubs (equivalent to the EFL Championship), and 12.5 percent paid to each of the bottom two divisions (equivalent to EFL League One and EFL League Two). Until the 2006-07 season the Premier League did not share any of their broadcasting revenue with the
English Football League The English Football League (EFL) is a league of professional football Football is a family of team sport A team is a [group (disambiguation), group of individuals (human or non-human) working together to achieve their goal. As defin ...
other than £4m a year for youth development, and participating in the EFL Cup which added value to the
English Football League The English Football League (EFL) is a league of professional football Football is a family of team sport A team is a [group (disambiguation), group of individuals (human or non-human) working together to achieve their goal. As defin ...
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 club
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
basic TV money, this would lower the risk of a club going into Administration (British football), administration due to the high cost base (mainly player wages) they incurred in the
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
. In addition "solidarity" payments from the Premier League worth £1m were paid to each EFL Championship club to help mitigate concerns about the impact the parachute payments might have to the competitive balance of the league. The structure and value of the "parachute" and "solidarity" payments have continually evolved since then.


Premier League broadcasting rights

The
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
splits the UK broadcasting income into 3 categories. 50 per cent equally shared between
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
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"). Overseas broadcasting income is currently split equally between
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
clubs. Payments to English Football League, EFL clubs are linked only to the equally shared element of the broadcasting income (i.e. 50% of UK income, and 100% of Overseas income).


Parachute payments

Parachute payments are unique to the English game and currently see clubs relegated from the
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
receive a percentage of the equally shared element of broadcasting rights each
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
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 The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
for more than one season before relegation, 20% 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. If a club is promoted back to the
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
during the parachute payment period, then it no longer receives parachute payments. The English Football League, EFL also operates a Parachute Payment system within the English Football League, EFL Leagues and the National League (English football), National League. From 2016-17 season onwards payments are: * Clubs relegated from the EFL Championship receive 11.1% of the Basic Award payment to Championship clubs for one season. * Clubs relegated from EFL League One receive 12.6% of the Basic Award payment to League One clubs for one season. * Clubs relegated from EFL League Two receive 100% of the equivalent Basic Award payment made to League Two clubs in the first year following relegation, and 50% of the equivalent Basic Award payment made to League Two clubs in the second year following relegation.


Solidarity payments

Clubs within the English Football League, EFL 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 the
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
would receive (currently 20% of the equally shared element of
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
broadcasting rights). This percentage drops progressively for each EFL league – 30% in the EFL Championship, 4.5% in EFL League One, and 3% in EFL League Two.


Changes to distribution of overseas TV rights

From 2019-20, the current level of revenue from international TV rights sales will still be shared equally between all 20
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
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 to English Football League, EFL clubs.


Debate and criticism

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: *Parachute payments give an unfair advantage to relegated clubs and damage the competitive balance of the EFL Championship. *Solidarity Payments are not anywhere near as high, in percentage terms, as the pre
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
distribution method. Some believe that the
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
has a greater responsibility to support the leagues below. *Some Premier League club owners question the merit of the
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
"subsidising" the English Football League, EFL, with John W. Henry quoted as saying “it’s much more difficult to ask independent clubs to subsidise their competitors beyond a certain point". *Parachute Payments reduce the need for
Premier League The Premier League, often referred to as the English Premier League or the EPL (legal name: The Football Association Premier League Limited), is the top level of the English football league system The English football league system, also ...
clubs, either collectively or individually, to insert relegation clauses into player contracts that would lead to an automatic salary decrease in the event of relegation. Relegation clauses might mean players fight harder to avoid relegation, but might also make it more difficult for clubs at risk from relegation to sign players.


References

{{Football League Two Premier League English Football League Payments