English Football League (EFL) chairman Rick Parry has upped the ante in the row over parachute payments by complaining about the evidence Premier League boss Richard Masters gave on the subject to a parliamentary committee last month.

Parachute payments are given to clubs when relegated from the Premier League to cushion the financial impact of their fall in status but also to encourage promoted teams to invest in better players, with the aim being to maintain the league’s quality and global appeal.

Advertisement

But their size has ballooned over the last 20 years as the Premier League’s media income has grown, and they now act more like trampolines than parachutes such is the advantage they give relegated clubs over their Championship rivals. Furthermore, many clubs without this leg-up simply overspend to compete, which is why English football’s second tier is awash with debt.

Parry has been calling for their abolition for years and repeated that message during a hearing of the Digital, Media, Culture and Sport committee in late March. The former Liverpool and Premier League chief executive told the members of parliament on the panel that a 2022 study by Sheffield Hallam University found that parachute-payment clubs were three times more likely to be promoted than clubs without them.

GO DEEPER

Parachute payments? They are more like rocket boosters - why EFL clubs want them scrapped

But one of the MPs on panel interrupted Parry and told him the Premier League disputes that statistic, prompting a pointed response from Parry about the factual basis of the report and its independence.

He then added: “It’s hard to see how parachute payments contribute to sustainability in any way, shape or form.”

“They do for the clubs that receive them,” interjected Masters.

“The Sheffield Hallam research does say that but it also says the Championship is the most competitive league in Europe.”

GO DEEPER

Bury, Macclesfield, Derby and whether a regulator would have saved crisis clubs

That, however, is not a claim Parry wants to leave unchallenged.

In an email sent to the committee on April 6, eight days after the hearing, Parry wrote that the EFL was surprised to hear that the Premier League contests the fact that clubs in receipt of parachute payments are three times more likely to be promoted and he was further taken aback by Masters’ claim that Sheffield Hallam’s researchers had described the Championship as Europe’s most competitive league.

He then outlined the findings of the original report the university did in 2018, when it found that clubs with parachute payments were twice as likely to be promoted in the 11 seasons between 2007 and 2017, and its 2022 update that looked at the five seasons between 2017 and 2021 when parachute-payment clubs were three times as likely to go up.

The second report was completed before Fulham and Bournemouth, both boosted by parachute payments, went up in 2022 — in fact, four of the top five in the Championship last season received them. And this season, both Burnley and Sheffield United, currently first and second, started with the same advantage.

Advertisement

Finally, he turns to Masters’ comment about the report saying parachute payments have not damaged the competitive balance of the Championship.

“Having re-read both reports from cover to cover, I am content that there is no claim whatsoever that the ‘Championship is the most competitive league in Europe’,” wrote Parry.

“In fact, the researchers note that (financial services firm) Deloitte have stated that on-pitch competition within the Championship remains intense but then go on to say that ‘there is yet to be any scientific evidence to prove this point’.

“Indeed, so concerned were the writers with the competitive imbalance caused by parachute payments that they suggested the EFL shroud consider a handicapping system whereby clubs with parachute payments should start each season on minus five points. Therefore, the reality is the polar opposite of the Premier League’s assertion to the select committee, and again, that is disappointing.”

GO DEEPER

The 'lesser of two evils' - the changing financial relationship between the Premier League and EFL

He concludes by asking the committee to give the matter of parachute payments “further scrutiny” and offers his full assistance if they choose to do so. He also attaches both of the Sheffield Hallam reports.

While there is a large dose of point-scoring and lobbying going on here, the spiky exchange in parliament last month and this subsequent complaint reveal just how fundamental the issue of parachute payments have become to the wider debate about how English football funds itself.

That subject has been the focus of fierce debate ever since 2019, when Bury became the first club to be kicked out of the EFL for financial problems for nearly three decades. Bolton Wanderers almost went with them and Macclesfield Town fell to the same fate a year later — and all of that was before the pandemic placed the entire pyramid under extreme financial stress.

Advertisement

Those events started a political process that eventually led to the government’s recent decision to create an independent regulator for football. The details of how it will work, and the scope of its powers, are expected soon.

GO DEEPER

Explained: What the Government white paper means for the regulation of English football

In the meantime, the government is very keen for the football industry itself to agree on a fairer distribution of the game’s revenues. The EFL set its stall out some time ago, asking for 25 per cent of the combined EFL and Premier League media income.

At present, the Premier League shares about 15 per cent of its income with the rest of the pyramid and grassroots game, but the biggest chunk of this is the more than £200million it shares with the half dozen or so relegated clubs via parachute payments.

Parry wants the Premier League to move this money into the pot it shares with the entire pyramid in order to close what he describes as the “financial chasm” between the EFL and Premier League.

The Premier League is willing to sell English football’s media rights collectively and increase the percentage it shares with the rest of the game, provided the EFL agrees to greater financial controls on spending, something the EFL is happy to do.

But the Premier League has so far shown no willingness to significantly move on parachute payments.

And, as Parry put it in his email to the committee, “the issue of parachute payments remains one of the main reasons why so many football clubs are financially unsustainable and why the Premier League and EFL have not yet agreed the football-led solution that both the fan-led review and white paper have called for on the financial distributions issue”.

He, however, will be encouraged by the response to his email, which is published on the committee’s web page, from its chair, Julian Knight MP.

“(The Sheffield Hallam) 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,” said Knight.

Advertisement

“The current financial arrangements amount to the big clubs shutting the door on those below. The Premier League must commit to working to find a fairer solution to safeguard the health and sustainability of the game.”

(Photo: Getty Images)

ncG1vNJzZmismJqutbTLnquim16YvK57k21qa2hjZ3xzfJFsZmlsX2d9cLHFpWSpqpWitqa%2BjKWcmp%2BlmnqztcKkZKmZoqfGcA%3D%3D