Premier League ‘shutting the door on those below’ by ‘distorting competition’
MPs have accused the Premier League of “shutting the door on those below” with the parachute payments system of financial redistribution to relegated football clubs.
Julian Knight, chairman of the Department for Culture, Media and Sport select committee, urged England’s leading clubs to find a “fairer solution” that doesn’t have a “distorting effect on competition”.
The issue is a sticking point in negotiations between the Premier League and EFL, which runs England’s three other professional divisions, over a new model of sharing the wealth generated by the top flight.
“The current financial arrangements amount to the big clubs shutting the door on those below,” said Tory MP Knight. “The Premier League must commit to working to find a fairer solution to safeguard the health and sustainability of the game.”
It comes after EFL chairman Rick Parry provided research that concluded Championship clubs in receipt of parachute payments were three times more likely to be promoted.
At a hearing last month attended by Parry and Premier League chief executive Richard Masters, Labour MP Clive Efford said top clubs had rejected that statistic.
Parry followed up with a letter to the committee and a copy of research carried out by Sheffield Hallam University academics which showed that between 2016 and 2021, 22 per cent of Championship clubs receiving parachute payments were promoted compared with only 7.3 per cent of other teams.
The numbers suggest the issue is becoming more acute, Parry added. If Sheffield United join Burnley in clinching promotion this weekend, it will mean that at least two of the teams going up this season have bounced straight back.
Knight added: “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.”
Masters defended the parachute payments system when giving evidence at the select committee hearing last month.
“Parachutes have been around since the start of the Premier League, and they are vital to ensure that clubs, when they come up, are able to invest and compete in the Premier League, in order that when they go down again they are supported,” he said.
“They are one of the few, actual, genuine, sustainability instruments, albeit for a small group of clubs, that exist within football. If they were removed, they would create significant difficulties for promoted clubs. It would affect the competitive balance of the Premier League and, for relegated clubs, create alternative issues.”
Sources close to the top flight pointed out that analysis of 1995-2022 showed that on average 0.85 teams in receipt of parachute payments has been promoted to the Premier League each year. Over the past five seasons that figure is 0.8.
They also said promoted clubs tended to perform broadly similar to their equivalents in Spain, Italy, Germany and France, in their first seasons, Those teams relegated from the top division tended to perform worse than their European counterparts.