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Promotion to the Premier League and its riches

Writer's picture: Andrew ZarbAndrew Zarb


In English football, getting promotion to the top division (the Premier League) is a significant boost for a club, but in particular its finances. The top two teams from the second division are automatically promoted back to the Premier League, whilst the 3rd, 4th, 5th and 6th placed teams compete for the last promotion slot in the annual promotion play-offs, with a two-legged semifinal and then the final at Wembley to navigate. In fact, the Championship promotion play-off final is said to be the world's richest football match, even worth more financially than either the Champions League or World Cup final, both matches of which are certainly more prestigious than the Championship promotion play-off final.

But just how big is the prize for promotion to the Premier League? The following are figures taken from Swiss Ramble. In England, there is the concept of parachute payments, which give clubs who are relegated from the Premier League a percentage of the shared element of TV revenue that Premier League clubs receive, in order to cope with the loss in revenue that comes with relegation, and a club receives 55% in the first year, 45% in the second year, and 20% if they have spent 2 or more consecutive seasons in the Premier League (if the club is promoted back to the Premier League within this timeframe, these parachute payments no longer continue). Those clubs who do not receive parachute payments are entitled to solidarity payments, as well as a Basic Award sum for appearing in the division, though unlike in the Premier League where this is dependent on finishing position, this sum is equal for all the clubs.

(The figures which shall be quoted are taken from Swiss Ramble.)

It is estimated that solidarity payments for Championship clubs are £4.3m, whilst the money distributed per club is said to be around £2.3m, which would be a total of £6.6m. If a club is promoted to the Premier League, even if it finishes bottom of the division, it earns £93.5m, whilst it would then earn £40.9m from parachute payments in the first year, and £33.5m in the following year (whilst a combined total of £4.6m in the two years combined). Thus, for these clubs, promotion to the Premier League is said to be worth a minimum of £165.9m in increased revenue for the next 3 seasons - and this figure rises to around £232.1m if a club remains in the Premier League beyond its first season.

If a club is looking to bounce back to the Premier League at the first attempt following relegation, promotion is said to be worth a minimum of £129.3m in increased revenue over the next 3 seasons, with the figure rising to around £195.5m if it survives its first season back in the top flight. A club who is in its second year of receiving parachute payments is said to benefit from a minimum of £136.7m in increased revenue over the next 3 seasons, with that figure rising to an estimated £202.9m if the club survives its first season in the Premier League.

These figures do not take into account, however, probable increases in gate money, season tickets, as well as revenue in other areas. There is the probable trade-off, however, of an increase in spending on wages to players, increased transfer fees, as well as possible higher maintenance costs.

Thus, on the basis of the figures above, it can be concluded that promotion to the Premier League is highly lucrative, and the prize is incredibly massive - but is very costly if you miss out on promotion, and this may explain the high rate of managerial sackings in the Championship as owners desperately attempt to try and achieve promotion to the promised land.

But just how much


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