Parachute payments: How they work and how much Wolves could receive | OneFootball

Wolves are braced for Championship football after relegation was confirmed on Monday, and focus now turns to parachute payments that ease the financial shock.

According to ExpressAndStar.com, the club had long accepted a return to the second tier, with West Ham’s draw with Crystal Palace sealing the drop this week.

Parachute payments are solidarity sums from the Premier League to relegated sides for up to three years, designed to help clubs adapt to reduced TV income.

The mechanism has been contentious, with the EFL arguing it gives relegated teams a sizeable advantage and can tempt others to overspend to compete. In 2023, chairman Rick Parry said the widening gap had become a major concern.

There is a clear structure. In the first year after relegation a club receives around 55 per cent of one equal share of Premier League broadcasting revenue, dropping to 45 per cent in year two and 20 per cent in year three.

Payments stop immediately if a club secures promotion, whether at the first attempt or in the second season. In past years, relegated sides have received about £49m in year one, around £40m in year two and roughly £17m in year three.

Source: ExpressAndStar.com