Relegation from the Premier League in the 2022/23 season was a disaster for Leeds United. However, the parachute payments softened the blow and the money has allowed the Whites to rebuild their squad for a promotion charge in the next two seasons.
Leeds failed to get promoted last season but continued to rake in a good amount of money from the Premier League, which allowed them to rebuild again last summer for another promotion charge in the ongoing campaign.
Sheffield United and Burnley are their two biggest competitors for automatic promotion this season and both got relegated from the Premier League last season.
Relegated teams get a certain amount of money from the Premier League for a few years to give them financial stability but it has also meant that relegated teams are always the best-equipped to get back to the top flight in the next few years.
There have been outliers like Ipswich Town last season and Leeds United in 2020 when they earned automatic promotion after being missing from the Premier League for 16 years.
However, mostly, teams with the biggest budgets in the Championship are the ones who just got relegated from the Premier League and hence, they start most seasons as favourites to get straight back up.
The Championship lacks a level playing field and Leeds United are getting an advantage
Following the sales of Crysencio Summerville, Georginio Rutter and Archie Gray last summer Leeds sorted out their FFP issues and had money to spend in the market.
The extra payment from the Premier League further increased their budget and while Leeds are not reckless with money anymore, it did hand them an unfair advantage over other clubs.
Parachute payments have some sound logic as teams getting relegated from the Premier League are often in financial danger as they pushed too hard to get promoted and spent even more to try and ensure that they remain in the top flight.
However, it is now turning out to be a major problem for other teams in the Championship who have the ambition of getting back to the top but do not have the budget to compete with the recently relegated teams.
If three out of six spots get more or less decided at the start of the season, it is unfair to the rest of the 21 teams who are dreaming of the riches of the Premier League.
Veteran broadcaster Richard Keys pointed out how unfair the system is in the Championship and how it distorts the competitive balance despite it being an enthralling league.
“Have you looked at the top of the Championship recently?”, he wrote on his blog.
“Two of the top three were relegated last season – Sheff Utd and Burnley – and squeezed in between them are Leeds, who went down the previous season. Are we surprised?
“Rick Parry is right when he argues that parachute payments distort competition in that league.”
The league needs a fix to this financial imbalance
In most seasons, we see the same few clubs competing for promotion and the pool grows shallower if we take into account the automatic promotion spots.
The reason Ipswich Town were celebrated as much last season is because they are now a rarity and it could take several more years for another team to match their feats in the Championship.
The caretakers of the game must want more such stories like Ipswich but the way the money gets distributed across the board they are only creating more problems than fixing them.
The existence of parachute payments is one of the biggest reasons for stopping more Ipswichs from happening and unless something changes, the same set of teams will be competing for promotion for the foreseeable future.
