Parachute payments boost promotion chances by 4x and should be scrapped, study finds
Parachute payments make clubs four times more likely to achieve promotion to the Premier League and should be scrapped, according to a new study.
The Leonard Curtis Football Finance Report 2026 found that over a 10-year period Championship clubs who received parachute payments had a 30 per cent chance of promotion, compared to just seven per cent for other teams.
“The analysis concludes that while the initial premise of parachute payments was to soften the financial blow of relegation, following significant increases in Premier League broadcast income their main impact appears to have been to give relegated teams a major financial advantage over their competitors in the Championship, which often translates into a competitive advantage on the pitch,” it says.
“The report therefore urges the parachute payment system to be entirely reconsidered, with its complete removal the recommended option, while recognising that in practice such a move would most likely occur gradually if it were to happen.”
It comes as talks between the Premier League and English Football League, which runs the Championship, over a new long-term agreement on financial distribution drag on.
Parachute payments gave clubs 2.8x more revenue
EFL chair Rick Parry has previously called for parachute payments – staggered subsidies designed to help relegated teams cope with the revenue drop-off – to be phased out.
The Premier League has resisted that move and disputed the extent of the advantage that clubs in receipt of parachute payments receive. The Independent Football Regulator, which has backstop powers to mandate a new financial framework, could yet have the final say.
The Leonard Curtis report found that the revenue of Championship clubs receiving the payments was on average 2.8 times higher than their peers’ over the 2015-2025 period. In the last two seasons covered by the study, that advantage was even greater.
While aggregate revenues of Championship clubs have grown from around £550m to more than £900m a year, the competitive nature of the league and the huge financial incentive of promotion has seen teams routinely spend beyond their means. In 2024-25, wage costs exceeded turnover at 13 of 23 clubs for whom accounts were available.
New Squad Cost Ration rules designed to make clubs live within their means were introduced this season. The report found that 18 of 23 clubs would have been in breach if the rules had been applied in 2024-25.