We Need To Talk About Parachute Payments

Leicester City was relegated back to the EFL Championship at the end of the 2022-23 Premier League season. The club sold and loaned multiple star players, including star attacker James Maddison, winger Tete, fullback Timothy Castagne, winger Harvey Barnes, and lost free agents Youri Tielemanns, Cayglar Soyuncu, Daniel Amarety,  Ayoze Perez, Jonny Evans, Luke Thomas, and Boubakary Soumare. The club enjoyed a solid 7-year run in the Prem, which saw them win the league title in spectacular fashion in 2016, the FA Cup and Community Shield in 2021, and enjoyed four seasons of European football competition. 

They sacked Brendan Rodgers, who oversaw their FA Cup and Community Shield wins and took them into the Europa League and the Conference League, but it was Dean Smith who guided them to the drop as the ship became rudderless. Leicester had to do a massive reset of their finances and transfer budget but will be aided by parachute payments from the Premier League. Parachute payments ensure a relegated team will get their share of Premier League TV revenue from the season they went down, but it comes in installments. Each season a team remains in the Championship, they get a lower percentage of the money. In most instances, this money is actually incredibly helpful. It gives teams a chance to instantly bounce back and afford better players in the fight for promotion. 

Yet parachute payments are incredibly divisive. They have been benefitting a small section of Championships, particularly the "yo-yo clubs" that go up and down every season as of late. Fulham is probably the best example, going back and forth between the first and second divisions four times, only staying up last season thanks to the tactics of Marco Silva and shrewd summer transfer business. 

There is something to be said about the same clubs constantly going up and down over the last few seasons, but Leicester is a sign of a much bigger problem. Sure, Leicester had to do a bit of a fire sale because of their drop in resources after relegation, but they still have plenty of players who could and should still be playing there. Jamie Vardy, the club's talismanic striker, has hit fine form again, scoring 4 goals in 14 appearances. Leicester are still blessed with talents like Patson Daka, Harry Souttar, Ricardo Pereira (admittedly, he has fallen off a lot but still good by EFL standards), Kieran Dewsberry-Hall, and Kelechi Iheanacho. These were all players who were part of Leicester's unprecedented run following their 2016 EPL triumph, and many who, for whatever reason, did not find new clubs for the 2023-24 season. Now, Leicester sit 5 points clear of Ipswich Town at the top of the Championship, with Leeds United, Southampton, West Brom, and Cardiff all settled in the playoff spots. Leeds and Southampton were the other two PL clubs relegated at the end of the 2022-23 season. 

Not to mention that with parachute payments, the sale of Maddison to Spurs, and other money-raising moves, Leicester was still able to bring in Harry Winks from Tottenham, Conor Coady from Wolves, a loan for Cesare Casadei, and  Mads Hermansen. They seem to take the financial hit from these moves without fail.  But that can't be said for the Championship clubs that have not been promoted since then.  

Leicester is not the clear winner yet, but if you consider the fact they only gave up a handful of players (arguably ones that would've likely been bought if had they stayed up), you might get the feeling there is a bit of unfairness going about this. Especially when clubs like Norwich have gone back and forth between the Prem and Championship three times in the last ten years, as have Bournemouth, Sheffield United, West Brom, Cardiff to a lesser degree, and so on. HITC Sevens made a video essay about this problem: the same Championship clubs are finishing the playoff spots, second place, or winning the league, and yo-yo-ing between the first and second divisions, thus hurting the parity of "the stupidest league in world football." Stupid being just how unpredictable it is. 

Parachute payments give these yo-yo-ing clubs such a competitive edge over the mid-table clubs, or those who haven't been promoted yet. 

The gist of Alfie Potts Hammer's video is that for all the plaudits about the Championship, it relies so much on the Premier League's money, and often that money goes to the teams who dropped down the previous season or two. Sure, there are outliers: Brighton won promotion in 2015 and has never looked back. Brentford has become one of the most-loved teams in English football. Teams like Stoke, Derby, and Queens Park Rangers -- teams that once played in the Premier League -- have spent and lost so much that they have spent money they don't have. Literally, they made up ways to sign players in the case of Derby, or have used one family's resource so much (Stoke). That's resulted in financial fair play punishments, and in Derby's case, a full-scale relegation to League One. We are quick to forget that as early as 2016, Newcastle was in the Championship, and now the Northeast club competes in the Champions League. 

Parachute payments feel like a necessary evil to keep the level of parity up in the Premier League, where lately it feels like 3rd place downward is more important to any team not named Manchester City or Liverpool. The earnings for promotion are too tantalizing to ignore. Better players will arrive as a result, but it must come down to results and survival. Even if Burnley, Sheffield United, and one of Everton, Bournemouth, Wolves, or Crystal Palace do go down, they will probably come right back up in the first time of asking. They have PL money on their side, but does that necessarily make it fair? 

The Championship is definitely the best 2nd-tier football division to watch. That's not a dig at it, it just is what it is. It keeps the EPL fresh with new teams, and serves as a showcase for rising talent like Alex Scott, now at Bournemouth. Parachute payment structure might need to change to keep the Championship's parity in check, but it doesn't detract from the atmosphere and unyielding support fans show these clubs. They are all chasing the same dream.