Premier League’s 2016-19 TV Deal and EFL Finances

A Watershed Moment in Broadcast Revenue

The Premier League’s 2016-19 broadcasting rights cycle represented a watershed moment for the finances of the entire English football pyramid. With total revenues from domestic and overseas deals confirmed to exceed £8 billion for the period, the top flight’s wealth triggered a significant, and controversial, restructuring of the funds distributed to English Football League (EFL) clubs.

From the 2016-17 season, payments to lower-league clubs were calculated using a new formula, directly linking them to the value of the Premier League’s own central broadcast revenues. This resulted in a substantial increase in so-called solidarity payments, designed to support clubs in the three divisions below the top flight.

A Step-Change in Solidarity Payments

For Championship clubs not in receipt of parachute payments, the annual solidarity payment more than doubled, rising from £2.3 million to approximately £5 million per season. At the time, with the average turnover for a Championship club standing at around £15 million, this single payment stream came to represent a substantial proportion of a club’s total income, supplementing the league’s own television deal which provided circa £2 million per club.

The increases were felt throughout the pyramid. Clubs in League One saw their annual payment rise from £360,000 to £750,000, while League Two sides received £500,000, up from £240,000. While a welcome injection of capital, these figures were dwarfed by the simultaneous expansion of parachute payments for relegated clubs.

The Parachute Payment Controversy

The 2016-19 deal also inflated the value of parachute payments, designed to soften the financial blow of relegation from the Premier League. The total value of these payments, then distributed over four years, leapt from £59 million to more than £80 million per relegated club. This created a significant financial disparity within the Championship itself.

Clubs descending from the top flight were equipped with financial firepower that far exceeded that of their divisional rivals. This led to immediate concerns that the payments were distorting competition, creating a multi-tiered division where relegated clubs had an overwhelming advantage in the race for promotion. This stratification of the league, with a clear gap between the ‘haves’ with parachute payments and the ‘have-nots’, became a defining economic feature of the division in the years that followed.

Lasting Economic Consequences

The financial framework established by the 2016-19 broadcast deal set a long-term precedent. The economic chasm between the Premier League and the EFL, and indeed within the Championship, continued to widen in subsequent rights cycles. The debate over the scale of parachute payments and their impact on competitive balance has remained a central and contentious issue in English football finance. These structural disparities were a key factor behind the subsequent fan-led review of football governance and the sustained discussions in the 2020s regarding a new financial distribution model between the Premier League and the EFL.