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The Premier League’s parachute payment scheme is a failed system and change is needed to prevent an unfair financial advantage

There has been a lot of debate around the subject of parachute payments within the football league and following a tight season at the top end of the Championship, is there evidence to suggest that relegated Premier League teams have an unfair advantage?

Every season, the Premier League distributes payments to teams that have been relegated in order to help clubs survive the financial trauma of dropping out of the top flight. However, there has been a lot of debate from fans within the Championship surrounding the subject and labelling it as unfair for the rest of the league.

In the first year after being relegated, clubs receive 55 percent of the money that they would usually be given whilst in the Premier League that would be generated by the Premier League’s lucrative TV deal.

The following season, if the club fails to get promoted, the parachute payments continue with teams then receiving 45 percent of the Premier League’s TV money. There will then be a final year of payments for the clubs in question as long as they spent more than one season in England’s top league.

This season has been one of the most competitive Championship seasons to date, with Leicester, Leeds and Southampton hoping to gain promotion back to the Premier League.

Leicester started the season incredibly, winning five of their first six league games, whilst Leeds had a shaky start after a long summer transfer window which saw their squad left depleted.

Southampton also started the season strong but quickly found themselves struggling to pick up wins under new manager Russell Martin.

Although despite the strength of the squads that were relegated, with two games left to go in the 2023/24 Championship season, no one would have expected Ipswich Town to be within touching distance of acquiring automatic promotion and leapfrogging Leeds after their promotion from League One last season.

There is no doubt whatsoever that Leeds, Leicester and Southampton have had an increased advantage compared to the other teams within the league and the value of each squad, further proves that.

Leeds spent ten million on striker Joel Piroe from Swansea and that’s just one example of the financial power that these clubs have after relegation.

Other clubs are having to work with a much tighter budget and purchase players with far less quality meaning that they simply can’t compete.

Kieran Mckenna, Ipswich Town head coach

Ipswich Town has been an outlier this season winning 26 games, drawing 12 and losing just six, the least amount of losses out of everyone this season.

They now sit on equal points to second placed Leeds United and are poised to overtake them and snatch automatic promotion.

Further down the League however, teams have struggled to break into the top end of the table and are having to once again settle for the play-offs in which they will face either Leeds or Ipswich and Southampton.

The problem with parachute payments is that even if there is a team that can push towards the top, teams in the play-offs will have to play what is essentially a Premier League squad.

There have of course been cases in which teams have been relegated and not been promoted again, but it is now becoming more frequent that at least two of the three teams that come down head straight back up.

The Premier League need to re-evaluate their parachute payment scheme and reduce or even stop the money that they are paying out to clubs each season so there can be more competition which would result in a more entertaining season and increased uncertainty about the teams being promoted to England’s top league.

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