Relegation from the Premier League can have significant financial implications for clubs. Here is what it means for Leeds, Leicester, and Everton:
Leeds and Leicester:
If Leeds or Leicester get relegated, they will receive payments from the Premier League called parachute payments. The aim of these payments is to ensure the club can cope with the reduced income from not being part of the Premier League – especially given that many of the players remaining at the club will still be under contract on so-called Premier League wages.
Relegated clubs will receive 55% of the equal share of broadcast revenue paid to Premier League clubs in the first year after relegation, 45% the following year, and 20% in year three.
Clubs in the Premier League split around £2.6 billion in prize cash and central funds during the 2021-22 season.
Everton:
Survival in the Premier League is important for Everton because they will receive a share of the prize cash and central funds. The amount of money a club receives is based on their final position in the league table.
Deloitte Sports Business Group estimates relegation to cost either club approximately £50m in Premier League distributions alone. Premier League clubs receive roughly a £90m share from the league each season. That’s money generated from TV revenues from domestic and foreign markets.
While relegated teams receive a £40m parachute payment, there is still a large shortfall for clubs to make up. Those parachute payments equate to 55% of the broadcast revenues in the first year after relegation. In year two, it goes down to 45% (£35m), and in year three, it is 20% (£15m).
What is the minimum amount of money that a Premier League team receives from broadcast payments?
The minimum payment a Premier League team receives from broadcast payments is £11.0 million for 12 live games in the 2021/22 season. However, every club receives a minimum of circa £12.3 million if less than 10 of its matches were aired live. For every broadcasted fixture beyond the first ten, a club will receive around £1.1 million.
