Finance expert explains boost Burnley, Luton Town and Sheffield United will have

After winning promotion to the Premier League during the 2022/23 campaign, Burnley, Sheffield United and Luton Town were all relegated from the Premier League after just one season.

It was a disappointing campaign for all three, particularly Burnley and Sheffield United, and despite sides like Everton and Nottingham Forest receiving points deductions, the three promoted clubs all made an immediate return to the Championship.

This just shows how the gulf in quality between the Premier League and the Championship has grown in recent seasons, with the money on offer in the Premier League dwarfing the second tier, and therefore making it hard for Championship clubs to compete when promoted.

Leicester City and Southampton, both of whom were relegated to the Championship in 2023, made an immediate return to the Premier League, whilst the other relegated club, Leeds, finished 3rd and reached the play-off final.

With parachute payments in their bank accounts, the trio relegated from the Premier League this season will surely be confident of making an immediate return to the top-flight next season.

Football finance expert Dr Dan Plumley has put into context just how more likely clubs are to get promoted when receiving parachute payments compared to their league rivals who are not.

Speaking exclusively to Football League World, Plumley said: “The data tells us that clubs who receive parachute payments, if you look back over the last 10 to 15 years, are twice as likely to be promoted back to the Premier League if you’ve got them versus not having them.

“If you look at the last five seasons over an isolated period of time, that figure stretches to nearly three times more, so whilst there are other factors at play, if you look at the three relegated clubs over a single year, a year-long parachute payment is about £42million and if you look at the haves and the have-nots, you’ve got three clubs who are £42million ahead before a ball has been kicked.

“It stands to reason that’s going to give them a significant financial advantage and that can then turn into a sporting advantage.

“There’s no guarantee that those three clubs will go straight back up, but if you look at the data, history tells us that more often than not you’re going to get one of the clubs, two of the clubs or maybe all three that will go back up within that window.”

The three clubs relegated from the Premier League this season are perhaps not as strong as the clubs that were relegated last season, but they’ll all start as some of the favourites to win promotion thanks to their parachute payments.

The division doesn’t look as strong next season as it was this season, and there’ll be plenty of clubs who fancy their chances of reaching the play-offs.

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However, as Dr Dan Plumley has pointed out, the parachute payments mean that the relegated trio will be £42million better off than the clubs who aren’t receiving them, giving them a huge advantage which they have to make the most of.

You only have to look at clubs like Stoke City and Swansea City, two clubs who failed to win promotion during their parachute payment years, to see how important it is to make a return whilst the money is there, with the pair now being lower mid-table Championship sides.

You’d have thought that Leeds United would have something to say about the relegated trio’s promotion hopes, and as Ipswich showed this season, there’s always a surprise package.

However, next season represents a great chance for Burnley, Luton and Sheffield United to return to the Premier League, and they’ll be looking to take full advantage of their parachute payments.