How much is Southampton’s Championship play-off final win worth to the Premier League newbies?

Lewis Oldham
Championship play-offs
Daniel Farke and Russell Martin are vying for promotion to the Premier League through the Championship play-offs.

Southampton edged out a sub-par Leeds United side to seal promotion, but how much is their win at Wembley in the Championship play-off final worth?

 

How much is this season’s Championship play-off final worth?

This weekend’s showdown at Wembley was a unique one, as Leeds United vs Southampton was only the second post-2000 Championship play-off final contested between two teams boosted by parachute payments a year after they fell from the Premier League.

And because of parachute payments, the financial prize on the line is slightly less than it would have been had Norwich City and West Brom advanced to the final.

It’s worth noting that the funds afforded to winners Southampton would not come via a one-off payment. Instead, they will benefit from an increase in their revenue in the coming seasons.

According to data collected by accounting firm Deloitte, the winners’ revenue (spread over three years) would increase by £140m, while it would have been around £170m were they not already boosted by parachute payments.

Suppose Southampton avoid relegation after their first season back in the Premier League. In that case, their revenue has the potential to surpass £305m, with the majority of these funds coming via an increase in broadcast, commercial and matchday revenue.

As an example, there was a lot more on the line last season for Luton Town and Coventry City (as non-parachute payment teams) than there was for Leeds United and Southampton. To give you an idea of the difference, Ipswich Town – who earned automatic promotion to seal their return to the Premier League after 22 years away – will see their revenue rise to at least £200m next season.

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Back to the parachute payments, Southampton would earn 55% of the central broadcasting distribution earned by each Premier League club in their first season back in the Championship if they go straight back down. For their second season back in the Football League, their percentage split would decrease to 45%.

Southampton would qualify for a third year of parachute payments (20%) if they spent at least two seasons in the Premier League following promotion from the Championship.

The impact defeat could have on Leeds United…

Given what’s at stake for the winner and loser of a Championship play-off final, it’s easy to see why the highly-anticipated match at Wembley usually ends up being a damp squib.

For the loser, it’s not all bad as the two finalists tend to equally share the Wembley gate receipts, which usually equates to around £2m.

This was different in 2017 as Huddersfield Town and Reading came to an admirable pre-match agreement that the losing side would receive £4m instead of £2m, with the Royals eventually benefitting from this doubled consolation prize.

In a desperate attempt to gatecrash the exclusive Premier League club, Championship play-offs hopefuls often take financial risks in the transfer market to boost their promotion chances.

📣TO THE COMMENTS! How will Southampton perform in the Premier League? Join the debate here

Considering what’s at stake for the play-off winners, this is arguably a risk worth taking. But it does mean that a rough season or two lies ahead for the team that loses at Wembley.

Of the past six play-off final losers, only two sides finished in the top six the following season, with Aston Villa (17/18) and Brentford (19/20) bucking the trend. Interestingly, each side had better luck the second time around and got promotion a year later than they had initially hoped.

This season, Coventry City did not do too badly either, as they finished ninth and almost beat Manchester United en route to reaching the FA Cup final.

But more often, teams slump after losing in the Championship play-off final, with Derby County, Reading and Sheffield Wednesday recent examples of sides who spiralled into financial turmoil after narrowly missing out on a Premier League return.

Prize money in the Premier League

Just head here for a more detailed breakdown of how prize money in the Premier League is spread between the 20 teams.

But focusing on the bottom four positions (given that’s likely where Southampton will end up next season), Sheffield United earned £3.1m for finishing 20th, while 17th-placed Nottingham Forest took home £12.4m.

This is without TV money being taken into account. To give Southampton an inkling of what they could be in for, the money earned through TV revenue this season in the Premier League has ranged from £8.4m (for Burnley’s nine televised games) to £15.2m (for Nottingham Forest’s 17 televised games).

£140m boost precedes slippery slope for play-off winners

Some naive supporters of Southampton may feel that there are no negatives to come through their Premier League return earning them £140m.

But, even with this huge helping hand, it’s still very easy to end in the negative financial column at the end of the year as increased spending is often required to bridge the quality gap between the Championship and Premier League.

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For example, Huddersfield Town’s promotion through the play-offs earned them around £197m in increased revenue, but the Yorkshire club subsequently spent £230m on transfer fees and wages before getting relegated after two seasons.

Nottingham Forest meanwhile invested around £150m on signing 30-plus players before their Premier League return in 2022 after they relied heavily on the loan market to get up, while they had to splash out around £21m to their play-off squad due to promotion-related bonuses.

There is no right way to go about spending your play-off earnings. Luton Town largely opted to keep money in the bank to secure their future, while Aston Villa and Brentford are recent examples of sides who have managed to stabilise (and thrive) in the Premier League following their play-off triumph.

At a guess, I imagine Southampton would go down the route of the latter sides and go for the anti-Luton approach of throwing money at it in the hope that they can stick around in the money vacuum that is the Premier League for as long as they can before the bubble bursts.

Independent regular to scrap parachute payments?

Football in England could be set for big changes in the coming years with the introduction of an independent regulator edging nearer.

EFL chief Rick Parry is not hugely popular but has been a vocal critic of parachute payments for some time, arguing that it creates a closed shop and that more help should be given from teams in the Premier League to clubs lower down the pyramid.

To make this dream a reality, Parry is keen for parachute payments to be completely abolished and in turn, this would likely see the prize money on offer to the winners of the Championship play-off final being significantly lower than it is in its current form.

In January, Parry explained: “Sustainability requires better regulation, but equally important is redistribution, because we can demonstrate two-thirds of our clubs are insolvent.

“This isn’t about horse-trading over percentages – we have two ‘cliff edges’.

“One is between the bottom of the Premier League and the top of Championship – the gap is almost £100m – that’s almost unbridgeable.

“But we have another because we have the ‘parachute payments’ – so a £40m gap within the Championship. And it’s these gaps that cause irrational behaviour.

“We would like to eliminate parachute payments and we need more money.”