"It's vital" - Leeds United, Sheffield United, Burnley FC fired financial warning from expert after respective £60m revenue blows | OneFootball

Dr Dan Plumley discussed the importance of relegated Premier League clubs returning to the top-flight when they have parachute payments available

Football finance expert Dr Dan Plumley has spoken about the importance of winning promotion to the Premier League in a three-year period for clubs who have been relegated to the Championship with parachute payments.

Being relegated from the Premier League is always tough for clubs, and the financial implications can be catastrophic, so clubs are given parachute payments for three years after being relegated to help them balance the books with decreased revenue in the second tier.

However, this gives relegated clubs a huge financial advantage over other clubs in the Championship, and it means they often possess far stronger squads than the rest of the division.

Dr Dan Plumley has emphasised just how important it is to make the most of these parachute payments and win promotion to the Premier League in the three-year period after relegation to avoid being stuck in the second tier.

Football finance expert on the importance of Burnley, Sheffield United and Leeds winning promotion

Burnley and Sheffield United are both in the mix for promotion after being relegated from the Premier League as you'd expect, while Leeds, who are in their second year of parachute payments, currently top the Championship.

The one anomaly is Luton Town, with the Hatters currently 23rd in the Championship after their Premier League relegation, but that's the exception rather than the rule in recent years.

Speaking exclusively to Football League World via Bet Ideas, Dr Plumley discussed how important it is for relegated clubs to capitalise on their parachute payments.

He said: "It’s huge financially – especially if you can get promoted within the three-year parachute payment window.

"If you look at the numbers, you lose around £60m in revenue when relegated from the Premier League. That’s linked to the difference between the guaranteed Premier League TV payment and the parachute payment.

"For Burnley and Sheffield United, they would’ve had £60m less revenue than they would’ve had if they were in the Premier League. If they can bounce straight back up, they can cover that cost within a season.

"Leeds are slightly different as this is their second year in the Championship, so they have a slightly greater deficit of around £10m.

"It’s vital for clubs to be promoted back to the Premier League within three years of demotion; it’s a scrap at the best of times to escape the Championship. As soon as those parachute payments run out, it becomes a real up-hill battle."

Failing to capitalise on parachute payments could be catastrophic

There are a number of Championship clubs who failed to win promotion during their three years of parachute payments and are now struggling as a result of it.

For example, Swansea City went all out to win promotion in their third season after relegation, signing high-profile players on loan like Morgan Gibbs-White, Marc Guehi, Viktor Gyokeres, Connor Hourihane and Freddie Woodman, along with having the likes of Andre Ayew on a reported £75,000 a week in a bid to win promotion and it backfired.

They lost the play-off final and haven't really recovered since, having to trim their wage bill considerably, selling assets and have instead had to settle for mid-table finishes in the years that have followed, so it shows just how important it is to capitalise and return to the top-flight for financial stability.

Burnley, Leeds and Sheffield United won't want to end up in a situation like Swansea have, and they're not in the last chance saloon just yet, so it's not the end of the world if they don't win promotion this year, but they'll want to return to the Premier League sooner rather than later.

If Luton avoid relegation to League One this season, they could still be well-placed to win promotion next year, but if they fail to capitalise and aren't shrewd with their money, there could be ramifications in the future.

The gulf between the Premier League and the Championship is arguably as big as it's ever been thanks to finances, and the clubs with parachute payments need to make the most of their financial muscle to return to the top-flight.