Report shines light on financial challenges facing EFL Championship football clubs

A new Business of Sport report from Leonard Curtis has delivered fresh insight on the financial challenges facing the EFL Championship and their impact on the league’s competitive balance.

The inaugural Leonard Curtis Football Finance Report – which includes a foreword written by former West Ham, Wolves and Norwich City player Matt Jarvis – was launched at an event at the National Football Museum in Manchester.

It was attended by over 100 guests, including EFL club CEOs, sports finance leaders and media.

The new report features a first-ever Financial Performance Index for the Championship, ranking clubs based on their financial and sporting performance for the 2024/25 season (the most recent where financial data for the year is available).

The Index highlights the growing influence of parachute payments on a club’s financial position.

The top four revenue-generating clubs in 2024/25 were Leeds United, Sheffield United, Burnley and Luton Town – all in receipt of parachute payments. Those four teams alone (total £363.9m) made up almost 40 per cent of the league's entire revenue (£920.3m) in 2024/25.

The report, authored by a team of sports business journalists and leading football finance academics, including Prof Rob Wilson and Dr Dan Plumley, warns that parachute payments are turning the Championship into a “two-tier competition”.

Data in the report shows that Championship clubs receiving parachute payments generated 2.8 times the average annual revenue of non-parachute clubs across the ten-year period from 2015/16 to 2024/25 (£59.7m vs £21.3m).

In the last two reported seasons (2023/24 and 2024/25), the average revenue advantage of clubs in receipt of parachute payments was as high as £62-66m per club.

The figures also suggest that clubs with parachute payments were more than four times as likely to win promotion as those without them (31.4 per cent vs 7 per cent) over the ten-year period.

In 2024/25, parachute clubs had an average +26.8-point advantage, with three of the four recipients finishing 1st (Leeds United), 2nd (Burnley) and 3rd (Sheffield United).

In addition, the report underlines the growing challenges the Championship faces around spending control. The data shows that while league revenues grew from £546.5m in 2015/16 to £920.3m in 2024/25, the combined wages-to-turnover ratio never fell below 91 per cent.

In 2024/25, 13 of 23 reporting clubs spent more on wages than their entire turnover (Sheffield Wednesday did not file accounts for the year due to being in administration).

Alex Cadwallader, a director and insolvency practitioner at Leonard Curtis, who are Birmingham Chamber members, said: “The overarching story to emerge from this report is the growing structural inequality in the Championship, alongside a financial model that remains difficult to sustain.

“The Championship is a near £1bn league that cannot control its wage bill. It is a financial paradox, with record revenues across the league, unsustainable spending and yet a promotion race increasingly tilted towards the richest clubs.”

The Leonard Curtis Football Finance Report comes as the EFL implements new Squad Cost Rules (SCR), with each club’s spending on player and manager-related costs, including transfer fees, limited to 85 per cent of its income.

Applying the new SCR retrospectively to 2024/25, the report’s analysis finds that 18 of 23 reporting clubs would have breached the 85 per cent threshold, with 11 above 100 per cent. Preston North End would have been at 160 per cent and Oxford United at 152 per cent.

When allowing for the maximum £16m owner equity injection permitted in one season under SCR, three clubs would have breached the limit (Burnley, Leeds United and Cardiff City).