Promoted clubs like Leicester need more help from Premier League | OneFootball

A closed shop?

It has always been difficult for promoted teams to survive in the top-flight of English football. In no less than 25 of the 31 seasons between the advent of the Premier League in 1992 and the summer of 2023, at least one team who came up went straight back down again, in eight of them two were relegated and in one (1996/7) all three went back from where they had come after only one season. The Foxes haven’t been immune from this poor survival rate. Twice in the Premier League era (1993/4 and 2002/3) the club was promoted only to exit the top league after only one season.

The trend of promoted sides struggling seems to be solidifying in a worrying way. In the 2023/4 season, for only the second time in the history of the Premier League, all three promoted sides – Burnley, Luton Town and Sheffield United – went down. This season, the same outcome looks likely with Leicester City, along with Ipswich and Southampton, looking destined for the drop. I predicted this would be the likely outcome at the start of the season and Opta now suggest there is now a 92% chance that the Foxes will be relegated.

It is easy to point to the main reason why promoted teams face a constant struggle. It’s all about the money. It is well known that the financial gap between the Premier League and the Football League has always been substantial and it is getting ever wider.

The impact on outcomes is obvious. For example, so far this season the promoted clubs have played 23 games against the traditional big six. They have won only three of them and drawn two conceding 58 goals and scoring only 17. The points haul, 11 out of a possible 69 (an average point per-game of 0.4), is truly wretched and this is in a season where two of the big six, Tottenham Hotspur and Manchester United, are not doing very well. Leicester’s performance is on a par with this, Ipswich are doing slightly better than the average and Southampton catastrophically badly (zero points out of a possible 21)

The impact of financial fair play

The key point to make is that football’s financial regulations have intensified the gap between the Premier League and the Football League. As I have written before, financial fair play - in its present guise the Profit and Sustainability rules - was originally designed to limit what clubs could spend to prevent them from overreaching themselves and going bust. In England, Leeds and Portsmouth - who both got into serious financial trouble - were the main drivers of the new rules.

Whilst the attempt to prevent clubs getting into financial trouble is laudable, the regulations have another effect. What they also do is to permanently advantage clubs with the largest football revenues. As the Foxes have found, it is very difficult for clubs to challenge the dominance of the big six whose football revenue is more than the other 14 Premier League sides combined. Owners of those outside of the big six, including those who are newly promoted, are unable to spend sufficient amounts of their own money to try and redress this imbalance.

There is another effect of the regulations, too, which impacts on newly promoted clubs. The financial rules also benefit those who have been in the Premier League the longest. This is partly because the prize money received by all top-flight sides – even those who are relegated – is far in excess of anything that those in the Football League can dream about. It is also partly because clubs who spend time in the Championship are permitted, over a three-year cycle, to spend far less than those who have been in the top division the whole time. Under the current version of the rules losses of £105 million over a three-year period are allowed. In the Championship, however, a loss of only £39 million is permitted (although it is rising slightly by the end of this season).

Take Leicester’s case. In the three-year cycle ending in the summer of 2025 the Foxes will have spent two years in the Premier League and one in the Championship. That means the club will incur sanctions (a points deduction) if their losses amount to more than £83 million. Meanwhile, those who have been in the top-flight for the whole three years can incur losses of £105 million. This is the reason City had no choice but to sell one of their best players at the start of the 2024/5 season, a ridiculous outcome that is surely unacceptable to most fair-minded football fans. And it gets even worse. If relegation does occur in May then, by the end of next season, two years of the three-year cycle will have been spent in the Championship, reducing the permitted spend even further.

What can be done?

Premier League clubs -growing increasingly dissatisfied with the current financial rules - agreed in April 2024 that the present PSR will be eventually replaced by a version of UEFA’s squad cost ratio regulations whereby clubs are only permitted to spend a certain percentage of their revenue on transfers and wages. However, this will do little to help newly promoted sides because it still means that those with the highest football revenues (those who have been in the Premier League throughout) will still be able to spend much more on wages and transfer fees.

To cut a long story short, promoted clubs require more help if the Premier League is to avoid turning into a closed shop with a constant membership visited, for a short period, by teams from the Championship. An outlandish suggestion would be to give those promoted a head start in terms of points. Clearly, this wouldn’t be acceptable to the Premier League membership as a whole.

An alternative, more realistic, proposal would be to exclude, for at least a season, the newly promoted from any financial limitations. Owners would then be able to spend as much as they want on players and wages. This change is inadvisable partly because it would encourage over-spending and partly because it seems unfair that footballing success becomes more dependent on the wealth of owners rather than the popularity of the club and the revenue it can earn. Nevertheless, some change – such as the loosening of financial restraints on those newly promoted – is desperately needed to increase the competitiveness of the product.