In English football, a gulf has arisen between the finances of clubs from the Premier League and English Football League since the First Division clubs broke away to form the Premier League in 1992. Some have argued that this disparity is wider than in other European leagues where the top flight is combined with at least one division below in a league, such as Germany's Bundesliga, Italy's Serie A and Spain's La Liga. However, England has five tiers of single national divisions, compared to only two in Spain and Italy and three in Germany.
Finance Since the Premier League began at the start of the 1992–93 season, its member teams have received larger amounts of money in TV rights than their Football League colleagues. Prior to the formation of the Premier League, television revenues from top flight matches were shared between the 92 Football League clubs across four unified national professional divisions. The breakaway of 22 clubs to form the Premier League resulted in top flight revenues being shared exclusively between Premier League clubs. The Premier League agreed to maintain the promotion and relegation of three clubs with the Football League, but the Football League was now in a far weaker position – without its best clubs and without the clout to negotiate high revenue TV deals. This problem was exacerbated in 2002 when ITV Digital, the holder of the TV rights for the Football League, went into administration. Many League clubs had invested in ground improvements and the player transfer market with anticipated television funds that never materialized, causing several clubs to enter receivership – most notably Bradford City, who were faced with debts of £36 million and almost lost their Football League status as a result.
As a result, financial disparity has been cited as a reason for newly promoted teams finding it increasingly harder to establish themselves in the Premier League, thus worrying more about avoiding relegation than even winning the title. In all but four of the 31 seasons since its introduction, at least one newly promoted club filled one of the three Premier League relegation places, and in the 1997–98, 2023–24 and 2024–25 seasons, all three promoted clubs (Bolton Wanderers, Barnsley and Crystal Palace) in 1997–98, (Luton Town, Burnley and Sheffield United) in 2023–24 and (Ipswich Town, Leicester City and Southampton) in 2024–25 were relegated.
The only exceptions, in which all three promoted teams survived, were the 2001–02, 2011–12, 2017–18, and 2022–23 seasons. In 2001–02, the teams were Fulham, Blackburn Rovers, and Bolton Wanderers; Blackburn and Bolton were eventually relegated in 2011–12, and Fulham in 2013–14. (Fulham have since returned to the Premier League multiple times. In 2018–19 and 2020–21, Fulham were relegated immediately after only one season back in the Premier League. They were then promoted for a third time in 2022–23.) In 2011–12, the teams were Queens Park Rangers, Norwich City, and Swansea City; QPR was relegated in the following season, and Norwich in 2013–14, while Swansea was eventually relegated in 2017–18. Norwich and QPR both immediately bounced back from their relegations in the following season, earning promotion through winning the Championship playoffs in 2014 and 2015 respectively, however, they were both relegated back to the Championship in the seasons that followed. Norwich returned again in both 2019–20 and 2021–22 seasons, where they were once again relegated in both. QPR is still yet to return. In 2017–18, the teams were Brighton & Hove Albion, Newcastle United, and Huddersfield Town; Huddersfield were relegated in the following season, while the other two teams are still competing in the Premier League. Five years later, in 2022–23, Fulham, Bournemouth, and Nottingham Forest all avoided relegation. All three teams are still competing in the Premier League.
Parachute Payments
The Premier League distributes a small portion of its television revenue to clubs that are relegated from the league in the form of "parachute payments". Starting with the 2018-19 season, the league stopped disclosing the breakdown of parachute payments each year. For clubs that have spent one season in the Premier League, 55% of the total parachute payment is paid in the first year following relegation, with the remaining 45% in year 2. Should a club survive at least an additional season in the Premier League before relegation, they'll receive an additional £20 million payment in year 3. The three relegated clubs during the 2023–24 season, namely Burnley, Sheffield United and Luton Town received £49 million each in parachute payments during the 2024–25 season. Though designed to help teams adjust to the loss of television revenues (the average Premier League team receives £142 million while the average Football League Championship club receives £7.8 million), critics maintain that the payments actually widen the gap between teams that have reached the Premier League and those that have not, leading to the common occurrence of teams returning soon after their relegation.
One example of the struggles associated with adapting to relegation would be that of previous Premier League champions Blackburn Rovers, who were relegated from the top flight on 7 May 2012, and struggled to stay in the EFL Championship over the next five seasons before finally dropping to League One on 7 May 2017, earning the dubious distinction of being the only former Premier League champions to play at that level. This was in spite of Rovers initially spending substantial amounts of money following their relegation from the Premier League, breaking their transfer record to land Jordan Rhodes for £8 million in the 2012–13 season. Rovers would proceed to become a cost-cutting club, due to the exhaustion of their parachute payments across multiple seasons, large amounts of debts beginning to surface reportedly within the region of £100 million, and a lack of investment from their owners Venkys, culminating in their relegation to League One.
Another notable example of a former Premier League club that has struggled both financially and competitively, despite being in receipt of parachute payments, would be that of Bolton Wanderers. Having spent beyond their means throughout the club's 11-year tenure in the top flight, Bolton steadily declined with regards to league position in the years following their Premier League relegation in 2012, eventually dropping down to League One in 2016. That season, the club's perilous financial situation necessitated the sale of their Euxton training ground and a car park in use by the club. The club had amassed debts of £186 million to their previous owner Eddie Davies, of which £171 million was eventually written off in order to assist with selling the club. Bolton Wanderers and its parent company Sports Shield BWFC, have faced multiple winding up petitions from HM Revenue and Customs for unpaid loan debts to various external businesses amounting to approximately £30 million; including an unpaid £5 million loan to BluMarble, a finance company that had provided funds to facilitate a takeover deal for the club in March 2017, and an overdue loan debt of £5.5 million to Prescot Business Park Ltd. Bolton's most recent financial accounts have produced forecasts that predict an annual loss of roughly £11 million, with the club judged "unable to meet ongoing costs". The parent company Sports Shield BWFC was wound up in August 2017 after a court hearing, with initial fears that Bolton would face a points deduction as a result, however the club avoided such sanction.
In spite of the club being under a transfer embargo imposed by the Football League for almost two years from late 2015 to September 2017, with the club being limited to free transfers and loans under a pre-determined wage cap, Bolton earned promotion back to the Championship at the first time of asking under manager Phil Parkinson in the 2016–17 season.
The payments have been also criticized as causing Premier League teams to play more cautiously — playing not to lose instead of playing to win — because the threat of relegation means the loss of payments from the television rights. In fact, as of December 2006, the goals-per-game average is only 2.14, the lowest it has ever been in Premier League history and lower than any other professional league in Europe. Steve Bruce, at the time manager of Birmingham City, stated that,
Ten years later, these words were re-confirmed by the 2016–17 season final table, which showed a distinct trinary hierarchy. The 7 teams gaining places in European football were between 15 and 47 points ahead of the next group of 10, which were all spanned by a difference of just 6 points. A further gap of 6 points separated those mid-ranking teams from the relegation zone.
Curse of Christmas
The Curse of Christmas refers to a trend where the team at the bottom of the Premier League table at Christmas has been relegated at the end of the season. Since the league began, this has happened in every season except four: 2004–05, when West Bromwich Albion finished 17th, Sunderland, who avoided the drop in 2013–14, Leicester City who survived in the following season and Wolverhampton Wanderers who survived the drop in 2022–23. Swansea City managed a similar feat by being level on points with bottom club Hull City on Boxing Day, but survived in the 2016–17 season. West Brom were, in fact, still bottom of the table on the morning and even at half time in their final match of the last day of the 2004–05 season. However, a win over Portsmouth, combined with Norwich City and Southampton defeats and a draw for Crystal Palace, enabled them to move up three places and thus survive, an achievement since dubbed "The Great Escape". West Brom remain the only team to be bottom of the Premier League at Christmas, on the last day, even at half time, and still survive.
Every side that lay bottom at Christmas improved their form in the remaining matches – except for Derby County, West Brom, and Portsmouth over the three-year period of 2008 to 2010, Sheffield United in 2023–24, and Southampton in 2024–25. This can partially be explained by the January transfer window, enabling the struggling sides to improve their squads.
The four sides to have survived the drop despite being at the foot of the table at Christmas all improved their form by at least 0.64 points per game – just under the equivalent of two additional points for every three matches played. Only four other sides have increased their form by greater than this amount: Sheffield Wednesday (2000), West Ham United (2003), Sheffield United (2021) and Wolverhampton Wanderers (2026). Sheffield Wednesday, Sheffield United and Wolverhampton Wanderers had three of the four worst forms prior to Christmas, while West Ham achieved the highest points total from a 38-game season for a relegated side – achieving more points at the end of the season than the four sides who survived the drop despite being bottom at Christmas.
The last time a top-division team had achieved this feat was in the penultimate season of the pre-Premier League First Division, in 1990–91. The team in question was Sheffield United, who after 16 matches had no wins and only 4 points, before their form improved dramatically in the second half of the season and a run of seven successive wins helped them to finish in 13th place out of 20.
Certain teams are notable for extremely poor seasons as a result of inability to come to terms with the gulf: