Premier League parachute payments are payments made to clubs after they are relegated from the Premier League. Since 2016/17, they have been paid over three years, with the amount dropping after each year.
What they are
Parachute payments are part of the post-relegation financial adjustment period. A club can invest in its team and its wider operations with provisions in place to re-adjust its finances if relegation happens.
- Recipients: clubs relegated from the Premier League
- Main purpose: support financial re-adjustment after relegation
- Scope: the team and wider operations
They are tied to the period after leaving the Premier League, not to results while remaining in it.
Who gets them
The group is simple: clubs relegated from the Premier League receive parachute payments. At the end of each season, three clubs are relegated from the Premier League, so those are the clubs that enter this arrangement for that season.
- Single trigger: relegation from the Premier League
- At the end of each season: three clubs go down
- Clubs entering the arrangement: that season's relegated three
It does not depend on reputation or any outside judgment.
How long they last
Since 2016/17, parachute payments have been spread across three years rather than paid all at once. The amount then decreases from one year to the next.
- Year one: payment begins
- Year two: payment continues at a lower amount
- Year three: payment continues at a lower amount again
That makes the system a declining schedule over time. The design gives clubs room to adapt their finances step by step after relegation.
What they are for
A club's spending in the top division is not limited to the first team. Wider operations are part of the same picture, and parachute payments are there so financial re-adjustment can happen with some planning in place.
- They give team spending a transition plan
- They give wider operations time to adjust
- They spread financial re-adjustment across stages
The purpose is the adjustment process itself. Clubs have a built-in transition after relegation instead of having to compress every financial change into a much shorter period.
FAQ
How do Premier League parachute payments work?
They begin after a club is relegated from the Premier League. Since 2016/17, they are paid over three years, and the amount is lower in each later year.
How long do parachute payments last?
Under the current structure, they last for three years.
When did the three-year declining system begin?
It began in 2016/17. From that season onward, the payments have followed the same three-year pattern with a lower amount each year.
Do clubs still get them if they go straight back up?
Parachute payments go to clubs relegated from the Premier League, they run over three years, and the amount decreases after each year.
What is the purpose of a parachute payment?
It gives a club provisions to re-adjust its finances after relegation. It also allows investment in the team and wider operations with that transition already built into the planning.