How The EFL is Battling The Premier League For The Sake Of Smaller Clubs

Money. A positive and negative in football. The financial tool that has transformed the game – creating mega-stars, state-of-the-art facilities, and the forming of top teams. Football would not be the sporting powerhouse it is without a treasure chest worth of money.

However, transactions and currency also have their downsides. Differentials. The rich and poor in football – an unprecedented gap between leagues and teams that makes it impossible for fair competition.

England is a key example of this. The top teams and the Premier League dominate the English footballing ecosystem, while teams at the bottom of the EFL pyramid struggle and cope with financial difficulties.

But why is this and what are the biggest financial gaps in English football?

The Premier League's Spending Power

To be an elite club and to play in the country’s top division, you need to have the best players. The ‘Big Six’ choosing to strengthen each year by diving into the elite parts of the transfer market, compared to the teams, who are promoted each year – money offers the opportunity to sign new players.

The Premier League sits in front of the EFL in several different ways financially, but transfer fees are where they can utilise their superiority. After a record-breaking spend of £2 billion in the 2023/24 Premier League season, the English top flight followed it up with a reported spend of £1.9 billion and a £610 million net spend in the 2024/25 season. That means that on average, each club in the Premier League spent £95m on transfers within the last season, with key signings in the Premier League including Dominic Solanke to Tottenham for £65m and Manuel Ugarte to Manchester United for £50m.

🚨🔵 Chelsea this summer:

➡️In:
🇵🇹 Pedro Neto - Wolves - £50m
🇵🇹 João Félix - Atletico - £44.5m
🏴󠁧󠁢󠁥󠁮󠁧󠁿 Omari Kellyman - Aston Villa - £19m
🇪🇸 Marc Guiu - Barcelona - £5m
🏴󠁧󠁢󠁥󠁮󠁧󠁿 Kiernan Dewsbury-Hall - Leicester - £30m
🏴󠁧󠁢󠁥󠁮󠁧󠁿 Tosin Adarabioyo - Fulham - Free
🇵🇹 Renato Veiga - Basel - £12m
🇺🇸… pic.twitter.com/KK51cIaGaj

— Transfer News Live (@DeadlineDayLive) August 21, 2024

However, compared to the rest of the EFL, the gap is vast. In the 2024/25 season, the Championship spent a reported £140m, with the record signing being Tom Cannon from Leicester City to Sheffield United for £10m. But for the Championship, the issue is not only the differences in their spending but when teams are promoted to the top flight, clubs are having to spend an increased amount to attempt to match up with their Premier League opposition. And for many like Ipswich Town, all of that spending is not enough, and promotion will guide the clubs into a deeper financial hole.

While highlighting the differential between the Premier League and Championship, the gap only widens as you look down the EFL pyramid, with clubs in League One and Two, doing much of their business within the free agency market.

Financial Gap In Television Rights

Hand in hand, alongside transfer spending in football finances, is television rights. The biggest source of income for teams, allowing clubs to become similar to American franchises and global powerhouses. In England, the newest TV revenue deal was agreed in 2024, signed with Sky Sports for 5 years worth £935m. A deal that covered all of the Premier League, Championship, League One, League Two, Carabao Cup, and the EFL Trophy.

❗Sheffield United who finished last in the Premier League last season earned €142 million in TV broadcasting revenue more than Inter the Serie A champions who earned €101 million. pic.twitter.com/A5L337dUOP

— Nerazzurri Society (@nerazzurriSoci_) February 8, 2025

The Sky Sports worked out to around £187m per for all 72 EFL clubs, with Championship clubs typically receiving £7-9m each, compared to clubs in League One that gained £1-1.5m and £500k-1m for teams operating in League Two. While the TV deal does somewhat help and consider teams in the EFL, the sharing of the TV revenue, heavily favours the Premier League, handing teams approximately £100m per season.

Teams in the EFL were now often operating on a loss, relying heavily upon matchday revenue. However, due to the access and televised coverage for the country’s top division, fans choose to stay at home and watch through a subscription, rather than supporting teams in League One or Two.

Parachute Payments

Finally, the last financial issue that separates teams in the EFL is parachute payments. The process of handing funds to the teams that are relegated from the Premier League to help them with the sudden loss of TV revenue. In the first year, clubs gain £44m, before £36m in year two, and £16m in year three, if the club was in the English top flight for more than one season. While on face value, this is positive and will help clubs to stabilise, following relegations from the Premier League. However, parachute payments create an incredible gap between the top and bottom teams in the Championship.

❓Is the Championship becoming less competitive at the top?

🔥 Burnley are going straight back up, Sheff Utd might too.

📊 Leeds hit 100 points this year after 90 last year.

🪂 Teams with parachute payments are tightening their grip. pic.twitter.com/qAwnHY5DFm

— Aurel Nazmiu (@AurelNz) May 15, 2025

Firstly, a club with parachute payments could have a budget of 6x of a typical Championship side, due to the payments, alongside the possibility of high money sales by the clubs of key assets that might want to leave due to their clubs being relegated. Comparatively, by having a bigger budget, teams that have been recently relegated from the Premier League will also be able to retain better players and make bigger signings, due to being able to pay higher wages. Financial bias means clubs like Preston, Millwall, and Coventry face an uphill battle to get promoted and remain in a sideways motion. Meanwhile, clubs such as Leeds United and AFC Bournemouth, who were recently relegated, bounce straight back to the Premier League. Teams such as Watford, Norwich, and Luton are anomalies. However, parachute payments create an unfair and large gap between teams in the Championship.

BREAKING: Leeds United have been promoted to the Premier League ⬆️⚪️ pic.twitter.com/M2rrFuCjHI

— Sky Sports Football (@SkyFootball) April 21, 2025

To conclude, football as a sport is forever growing, and the finances inside of it, also follow that path. However, the sharing of those finances is not fair and heavily benefits the country’s top clubs due to transfer dealings, TV revenues, and parachute payments.