Under the Premier League’s current rules. An eligible relegated club receives 55% of the defined “Relegated Club Shares” in its first season outside the top flight. 45% in the second season and, where eligible, 20% in the third.
The important point is that the distribution formula fixes those percentages, while the cash value can change because it is linked to Premier League broadcast revenue.
The Premier League’s official publications page confirms that the 2026/27 Premier League Handbook was published on 31 July 2026.
For a useful confirmed benchmark, the 2024/25 payments were £48.9 million in year one, £40.1 million in year two and £17.8 million in year three. The UK Parliament set out those figures in published evidence.
That produces a maximum of £106.8 million over three years at 2024/25 payment levels. However, not every relegated club qualifies for all three instalments.
This is also not conventional prize money. There is no winner’s cheque, finishing-position prize or payment made directly to players. Parachute payments are central distributions from the Premier League to eligible relegated clubs.
World in Sport’s Premier League prize-money guide explains the wider system of central payments received by clubs while they remain in the top flight.
The information in this guide is correct as of 8 August 2026.
How Much Are Premier League Parachute Payments?
The current Premier League formula is straightforward:
The £106.8 million total is calculated using the confirmed 2024/25 payments, rather than a guaranteed amount for every future relegated club. Each season’s actual payment depends on the broadcast revenues incorporated into that season’s Relegated Club Shares.
The confirmed 2024/25 figures are recorded in UK Parliament evidence on Premier League parachute payments.
The same evidence gives the first-, second-, and third-year figures as £48.9 million, £40.1 million, and £17.8 million, respectively.
The Premier League therefore does not promise every relegated club a fixed £106.8 million package when they go down.
How Is a Parachute Payment Calculated?
The Premier League does not base parachute payments on where the relegated club finished in the table.
Instead, “Relegated Club Shares” are based on elements of the central broadcast distribution. The definition covers one share of the Basic Award Fund and one equal share of international broadcast revenue distributed under the league’s equal-share method.
In plain English, the starting figure is linked to television money distributed equally among Premier League clubs.
The relegated club then receives the relevant percentage of that figure: 55% in year one, 45% in year two and potentially 20% in year three.
The Premier League explains that parachute payments are designed to provide relegated clubs with the means to readjust their finances after losing top-flight status. The payments have declined over as many as three seasons since 2016/17.
What Was the Confirmed Payment for 2024/25?
The 2024/25 season provides a useful confirmed benchmark.
The first-year parachute payment was £48.9 million. The second-year payment was £40.1 million, while an eligible club in year three could receive £17.8 million.
That means the three payments totalled £106.8 million at 2024/25 levels.
Those figures should not simply be copied forward and described as the confirmed 2026/27 cash payments. The value of the underlying broadcast distributions can change between seasons.
That distinction is particularly important in an evergreen guide. The 55%-45%-20% formula explains the structure, while the monetary value depends on the central distributions for the relevant season.
Do All Relegated Clubs Receive Three Years of Payments?
No.
A club that had been a Premier League member for only one season immediately before relegation does not receive the third-year payment under the established rules.
That means such a club can receive the first-year 55% payment and the second-year 45% payment, but not the additional 20% in year three.
Using 2024/25 values purely as a confirmed historical illustration, those first two payments would total £89 million.
A club that had spent more than one season in the Premier League before going down can remain eligible for the third instalment, provided it remains outside the Premier League.
This distinction matters when assessing the real value of the safety net. An established Premier League club can potentially receive an additional season of support that a newly promoted side relegated after one campaign does not.
What Happens if a Club Is Promoted Again?
Parachute payments do not continue after a club returns to the Premier League.
The rules define a Relegated Club as an EFL club that was relegated from the Premier League during the relevant previous seasons and remains relegated.
Once a club wins promotion back to the top flight, it becomes a Premier League member again and no longer qualifies for the remaining instalments from that relegation cycle.
Therefore, a club promoted at the first attempt does not collect year-two or year-three parachute payments alongside its new Premier League central distribution.
Likewise, a club promoted during its second season outside the top flight does not continue collecting a third-year parachute payment.
Instead, it becomes eligible for the central distributions available to Premier League clubs.
For more on how promotion works, World in Sport’s football rules guide explains the wider structure of the game, while its Championship coverage follows the promotion and relegation picture.
What Do Parachute Payments Actually Include?
One of the easiest mistakes is to treat parachute payments as a percentage of everything a Premier League club earns.
They are not.
The calculation is linked to defined elements of equally distributed broadcast income. It does not simply give a relegated club 55% of its former total Premier League revenue.
Premier League clubs can receive several different forms of central income while they are in the division. These include equal broadcast shares, merit-related distributions and other central payments.
Performance-related sums are separate from the Relegated Club Shares used for parachute payments.
That distinction matters because a club’s overall Premier League central distribution can be considerably larger than the base used to determine its future parachute payment.
World in Sport’s Premier League central-payment breakdown explains why clubs can receive different overall totals depending on league position, broadcast selections and the wider distribution model.
What Is Not Included in Parachute Payments?
A parachute payment should not be confused with a club’s total Championship income.
It does not include matchday receipts, season-ticket revenue, sponsorship agreements, merchandise sales, hospitality, transfer income or other club-generated commercial revenue.
It is also separate from EFL central distributions.
Similarly, it is not money paid directly to footballers. The payment goes to the club. Individual player wages, relegation clauses, bonuses and contractual reductions are separate matters between clubs and their employees.
This is why saying a relegated club “receives £48.9 million” does not mean it suddenly has £48.9 million available for transfers.
The club may still have Premier League-level salaries, outstanding transfer instalments, and other costs to meet, while simultaneously experiencing reductions in matchday, sponsorship, and commercial income.
European competition income is separate too. A club qualifying for UEFA competition receives distributions under UEFA’s own system rather than through the Premier League parachute-payment mechanism.
World in Sport’s 2026/27 Champions League prize-money breakdown explains how those payments are distributed.
Which Clubs Were Relegated for 2026/27?
Wolverhampton Wanderers, Burnley and West Ham United were relegated from the Premier League at the end of 2025/26 and joined the Championship for 2026/27. The Premier League confirmed West Ham’s relegation on the final day after Wolves and Burnley had already gone down.
World in Sport’s 2026/27 Championship opening-weekend guide covers their return to the second tier, including Wolves’ opening fixture against Blackburn Rovers and Burnley’s meeting with West Ham.
Wolves had spent eight consecutive seasons in the Premier League before relegation, while West Ham had also been established in the division for many years.
Burnley are different. They had been promoted for 2025/26 before being relegated after a single Premier League season.
Under the established eligibility rule, a club that spent only one season in the Premier League immediately before relegation is not entitled to the third-year payment.
The eventual cash value of each eligible instalment should still be distinguished from the confirmed 2024/25 benchmark because the applicable central distribution determines the payment.
Why Are Parachute Payments Controversial?
The argument for parachute payments is based on the enormous financial gap between the Premier League and the Championship.
Promoted clubs need to build squads capable of competing in the top flight. That can mean larger transfer commitments and substantially higher wages.
Without some protection against relegation, clubs could face an even greater financial risk when deciding how much to invest after promotion.
The Premier League’s stated purpose is to give clubs provisions that allow them to readjust their finances if they are relegated.
The opposing argument is that parachute payments give recently relegated clubs a major financial advantage over established Championship sides.
The scale of that difference is clear from the 2024/25 figures submitted to Parliament. A first-year parachute payment was £48.9 million, whereas the Championship solidarity payment listed for a club without parachute money was £5.379 million.
That does not guarantee promotion. Relegated clubs can still suffer from expensive squads, poor recruitment, managerial instability or wider financial problems.
However, it does mean they can begin a Championship season with a level of central income unavailable to most opponents.
Have Parachute Payments Increased over Time?
Yes, although comparisons need to use the same type of payment.
Published parliamentary evidence listed the equivalent payments for 2022/23 at £47.6 million in year one, £38.9 million in year two and £17.3 million in year three.
By 2024/25, those amounts had increased to £48.9 million, £40.1 million and £17.8 million respectively.
The change reflects movement in the revenues underpinning the calculation rather than an independently determined prize-money increase.
That is why the percentages are more useful for an evergreen explanation than treating any single sterling figure as permanent.
The Premier League Handbook remains the key source for the distribution rules. Future broadcasting agreements or rule changes approved by Premier League clubs could alter the underlying value or the structure itself.
Are Parachute Payments the Same as Premier League Prize Money?
No.
“Prize money” is commonly used as shorthand for football distributions, but parachute payments are better described as central financial distributions to relegated clubs.
There is no parachute-payment winner and no ranking among the recipients.
Likewise, Premier League clubs themselves do not receive one conventional prize cheque. Their primary income comes from several revenue streams rather than a single winner’s payment.
Parachute payments are a separate mechanism that operates after relegation.
This is also why they should not be added to UEFA income, domestic cup prize money, matchday revenue, sponsorship income, player sales, or other commercial revenue. And then described as a single Premier League prize fund.
Frequently Asked Questions
How Much Does a Relegated Premier League Club Receive in Year One?
The current structure provides 55% of the applicable Relegated Club Shares. The confirmed 2024/25 payment was £48.9 million, but the cash value may change depending on the relevant broadcast distribution.
How Much Can a Club Receive over Three Years?
At confirmed 2024/25 levels, the three payments totalled £106.8 million. That is a historical calculation based on the published payments, not a guaranteed fixed package for every future relegated club.
Does Every Relegated Club Receive a Third Parachute Payment?
No. A club that had spent only one season in the Premier League immediately before relegation does not qualify for the third-year 20% payment.
Do Parachute Payments Continue After Promotion?
No. Once a club returns to the Premier League, it stops qualifying as a relegated club and no longer receives outstanding parachute payments from that relegation cycle.
Are Parachute Payments Given to Players?
No. They are distributions to clubs. Player wages, bonuses and relegation clauses are separate contractual arrangements.
Is the Payment Based on Where a Club Finished Before It Was Relegated?
No. Finishing 18th rather than 20th does not increase the parachute percentage. The calculation is based on the Premier League’s defined Relegated Club Shares.
Are the 2026/27 Club Payments Officially Confirmed?
The Premier League published its 2026/27 Handbook on 31 July 2026, setting out the competition’s financial rules. However, historical cash figures such as £48.9 million, £40.1 million and £17.8 million should not automatically be presented as the final 2026/27 payments. They are confirmed 2024/25 benchmarks.
The central point is therefore not that every relegated Premier League club receives guaranteed payments of £48.9 million, £40.1 million, and £17.8 million.
The system is based on a percentage formula: 55% in the first season, 45% in the second and, for eligible clubs, 20% in the third.
That distinction matters whenever Premier League broadcast revenues or the wider central-distribution system changes.
