How Solidarity Payments Work in English Football
Solidarity payments in English football, explained: where the money comes from, what each EFL division receives, and how any of it reaches a grassroots pitch.
By CricketTaken EditorialPublished Football Money18 min read
A League Two finance director does not follow the Premier League's broadcast auction out of any interest in who wins the rights. He follows it because the number that comes out of it sets a line in his own budget, one he cannot influence, negotiate or replace. That line is the solidarity payment, and for clubs in the bottom two divisions of the English Football League it is often the largest single item of income that does not depend on anybody turning up.
The word "solidarity" is carrying a lot of weight. What it describes is a transfer of money from the twenty clubs of the Premier League to the seventy-two of the EFL, written into the Premier League's own rulebook, paid annually, and calculated as a proportion of something else entirely. Understanding the payment means understanding what that something else is.
The money begins as a broadcast contract, not a gift
Every pound that moves down the English pyramid under this heading started as a payment from a broadcaster to the Premier League for the right to show matches. The league sells those rights collectively — all twenty clubs' matches in one package, rather than each club selling its own — and collective selling is the mechanism that makes any redistribution possible. A league in which each club sold its own games would have no central pot to divide and no obvious reason to divide one.
Out of that central pot the Premier League pays its own clubs, funds its own operations, meets its commitments to the Football Foundation and the Premier League Charitable Fund, and pays parachute and solidarity money into the EFL. The ordering matters less than the fact that the solidarity figure is derived rather than chosen. It is expressed as a percentage of what a third-year parachute payment is worth, and that in turn is a percentage of an equal share of the Premier League's central distribution.
Two consequences follow, and they pull in opposite directions.
The first is that EFL clubs get an automatic uplift whenever the Premier League sells its rights for more. Nobody has to renegotiate anything; the arithmetic does it for them. The second is that EFL clubs have no control at all over the base. If the domestic rights market softens, their income falls with it, and the fall arrives in a budget that was set months earlier.
Because the sum is a derivative of a derivative, it is genuinely difficult for a supporter to state what the payment is in cash without opening a specific year's accounts. Which is exactly why so many arguments about it are conducted with figures that turn out to be several broadcast cycles old.
Where the scheme came from: the 1992 bargain
In 1992 the First Division clubs resigned from the Football League and formed the Premier League as a separate competition with its own broadcast contract. That is the founding fact, and every argument about redistribution since traces back to it.
The breakaway was possible because the Football League's own rules did not stop clubs leaving, and it was attractive because the new competition could sell television rights without dividing the proceeds four ways across ninety-two clubs. What had been one league with a shared income became two leagues with separate ones, joined by promotion and relegation but by very little else.
The clubs left behind did not simply accept that. Promotion and relegation were the leverage: the Premier League needed the pyramid to keep functioning, needed three clubs a year to come up, and needed the competition below to remain solvent enough to supply them. A payment to the Football League was part of the settlement from the beginning, and it has been renegotiated at roughly the rhythm of the broadcast cycles ever since.
What the payment has never been is a share. The distinction is not pedantic. A share would mean the EFL taking an agreed percentage of the Premier League's income as of right. A payment means the Premier League deciding, under its own rules, how much to send down, subject to whatever it has committed to in the current agreement. Every EFL negotiating position for three decades has been an attempt to convert the second thing into the first, and it has not succeeded.
The relationship with the FA sits awkwardly across all of this. The FA sanctioned the breakaway in 1992, on terms that included the new league's cooperation with the England set-up, and the FA remains the governing body for the game in England while having no control over the Premier League's commercial arrangements. That split between governance and money is the gap the Independent Football Regulator was created to stand in.
What each division receives, and why the gaps are so wide
The three EFL divisions are not treated alike. The Championship receives a large multiple of what League One receives, and League One a clear multiple of League Two.
The justification offered for the gap is that the Championship is where the costs are. A Championship squad is professional throughout, the travel is national, the stadium and safety obligations are heavier, and the division competes for players in the same market as clubs receiving parachute payments. League Two clubs, on this argument, run at a scale that does not require the same subsidy.
The counter-argument is that the gap has a self-reinforcing quality to it. Money follows the division nearest the Premier League, which lifts Championship wage levels, which raises the cost of getting promoted out of League One, which widens the gap again. Nothing in the formula corrects for that.
| Division | Relative scale of solidarity payment | Typical role in the club's budget |
|---|---|---|
| Championship | Largest by a wide margin | Meaningful, but small beside gate, commercial and parachute income at rival clubs |
| League One | A fraction of the Championship figure | Substantial; underpins a fully professional squad |
| League Two | Smallest | Often the largest single guaranteed income line |
| National League | Outside this pot entirely | Separate arrangements, far smaller sums |
There is a detail here that catches people out. Clubs receiving parachute payments do not also receive solidarity. The two are alternatives rather than additions, and a relegated club drops onto solidarity only once its parachute entitlement expires. The full taper is set out in the guide to parachute payments and why they split fans.
The clubs inside the EFL that get nothing from this pot
Something like a quarter of the Championship in a given season is on parachute money rather than solidarity. Those clubs sit inside the EFL, play in the same table, are bound by the same Championship financial rules, and draw from a different tap.
This is the structural oddity at the centre of English football finance. The EFL does not control the largest single income stream flowing to a significant minority of its own members. It cannot alter it, cannot attach conditions to it, and cannot redistribute it. The Premier League can, and the people voting on it are the twenty clubs in the division above.
An EFL chairman who wants the balance changed therefore has to persuade a group who do not sit in his league, are not accountable to it, and in many cases expect to be relegated into it at some point — and to want the cushion when they are.
It also produces an odd competitive result inside a single division. Two clubs finishing level on points in the Championship can have started the season with income differing by a multiple, and the spending rules do not adjust for that: profitability and sustainability calculations are applied to the club's own accounts, so a larger permitted loss is available to the club with larger permitted revenue. The rule is applied identically to both. The effect is not identical at all, and that distinction — same rule, different consequences — is what supporters mean when they call the arrangement uncompetitive rather than unfair.
Below the EFL: the National League and the steps beneath it
The seventy-two-club scheme stops at the trapdoor. National League clubs are not part of it.
Funding at Step 1 comes from a different combination: the National League's own commercial and broadcast arrangements, FA distributions, and specific contributions that have at times been agreed with the Premier League — most visibly during the pandemic, when the ability to admit spectators was removed and central grants were used to keep clubs playing at all. Those arrangements have been renegotiated and restructured more than once, and it would be wrong to present them as a settled permanent scheme in the way the EFL's solidarity payment is.
Further down, at Steps 2 to 6, the picture changes character completely. A club at Step 4 is not receiving a broadcast-derived annual payment. What it may receive is a facility grant, a kit or equipment scheme, a share of FA Cup and FA Trophy prize money, and support from its county FA. That money is capital and project money rather than income, and it arrives when the club applies for it rather than every August. The structure of the divisions themselves is set out in the guide to the non-league steps, and the route upward in National League promotion to the EFL.
The practical effect is a hard financial edge at the EFL boundary that does not correspond to any equivalent gap in playing standard. A well-run Step 1 club and a struggling League Two club can be a similar size and have wholly different funding architectures.
Grassroots pitches, and who actually pays for them
The Football Foundation is the vehicle. It is a registered charity, established in 2000, funded jointly by the Premier League, The Football Association and the government through Sport England — a three-way arrangement unusual in British sport, and the reason its grants come with public-benefit conditions attached rather than football conditions.
What it funds is physical. Artificial grass pitches, natural turf improvement and drainage, changing pavilions, floodlighting, goalposts. It does not fund a club's running costs, wages or travel. A grant is awarded against a project, the applicant has to raise partner funding for the balance, and the completed facility carries community-use obligations for a period of years afterwards.
- Broadcast dealThe Premier League sells collective rights and receives central revenue.
- Charitable commitmentA proportion is committed to the Football Foundation alongside FA and Sport England money.
- Local planA county FA and local authority agree a Local Football Facility Plan identifying priority sites.
- ApplicationA club, school or council applies against a project on that plan.
- Partner fundingThe applicant raises its share; the grant covers a proportion of the build, not the whole of it.
- Build and conditionsThe facility opens carrying community-use and maintenance obligations for a set period.
The route a facility grant takes through the system. Each step is a separate legal and administrative stage, and a project can stall at any of them.
Two honest caveats belong here. The Foundation's grants are competitive, so a pitch gets funded because somebody wrote a strong application against an agreed local plan, not because that area needed it most. And the maintenance liability lands on the local club or council afterwards, which is why the story of English grassroots facilities includes a number of 3G surfaces that were built with grant money and then aged badly on nobody's budget.
Solidarity against parachute, in scale
Put the two schemes side by side and the size difference is the whole debate.
A club relegated from the Premier League receives, in its first season down, a payment expressed as a majority share of an equal Premier League distribution. A Championship club that has never been promoted receives a payment expressed as a minority share of the third and smallest year of that same taper. The relegated club is taking several times what its opponent takes, in the same division, chasing the same promotion place, under the same spending rules.
Nobody designing a competition from scratch would produce that. It exists because the two schemes were built to solve different problems at different times — one to stop relegated clubs collapsing, the other to keep the wider league solvent — and were never reconciled with each other afterwards.
The EFL's position has been consistent: merge the pots, distribute on a single formula across all seventy-two clubs, keep a much smaller relegation cushion. The Premier League's position has been just as consistent: the cushion is what makes promotion financially survivable, and removing it would make newly promoted clubs behave defensively from August onward. Both positions are coherent, which is precisely why the argument has run so long.
Why the two leagues cannot settle it themselves
Voting arithmetic explains more here than rhetoric does.
Changing the Premier League's distribution requires a resolution passed by its member clubs, and the threshold is a supermajority rather than a simple one. Any proposal that moves money out of the Premier League has to win votes from clubs that would lose by it. Among those clubs are several relegated within recent memory, several that expect to be, and several whose owners bought in on financial models that assumed the current split would hold.
There is a second obstacle that gets less attention. The Premier League's clubs do not agree with each other either. A club at the top of the division and a club surviving by a point have very different views on how much of the central pot should be shared equally, how much awarded on merit, and how much sent downward. Redistribution to the EFL competes for votes against redistribution within the Premier League.
So the negotiations stall, resume, produce a heads of terms, and stall again. After enough cycles of that, Parliament took an interest. Which is how the backstop came to exist.
The regulator's backstop power, and what it can and cannot reach
The Football Governance Act established an Independent Football Regulator for the men's professional game in England, with a licensing regime and a defined set of powers. One of those is a backstop over distributions between the Premier League and the EFL.
The design is deliberately awkward to use. It is not a power for the regulator to sit down and decide what the right number is. It is triggered only where the leagues have failed to reach agreement, and it operates as a final-offer mechanism: each league submits its proposal, and the regulator selects one of them. Choosing between two positions rather than splitting the difference is meant to push both sides toward moderation before the process even starts, because an extreme submission is the one that loses.
| Stage | What happens |
|---|---|
| Negotiation | The leagues are expected to reach their own distribution agreement |
| Trigger | Where they cannot, an application can be made to invoke the backstop |
| Submissions | Each league puts forward a final proposal |
| Determination | The regulator selects one of the two proposals |
| Effect | The chosen distribution becomes binding for the period it covers |
What the backstop does not do is set grassroots funding, alter the Football Foundation, or reach below the EFL. Its scope is the relevant revenue moving between the two leagues. The regulator's wider remit — club licensing, owners' tests, financial resilience — is covered in the guide to the independent football regulator.
Whether the power is ever used is a separate question from whether it works. A backstop that changes behaviour in the negotiating room without being invoked has arguably done its job.
What a club actually spends it on
Ask at a League Two club and the answer is usually blunt: wages, and the confidence to sign anybody at all in June.
The value of solidarity money is not its size but its predictability. Gate receipts depend on results and weather. Cup runs are a lottery. Commercial income at that level is a handful of local businesses whose own trading conditions can turn. The solidarity payment is the line the budget is built on, and its certainty is what allows a club to offer a two-year contract in the summer instead of a string of one-year deals.
There are strings attached. EFL regulations condition receipt on compliance — a club in breach of its financial obligations, or failing to meet youth development requirements, can have payments withheld or set against what it owes. That is a real sanction and it does get used.
Some clubs ring-fence a proportion for the academy, because category status carries both its own funding and its own cost floor. Others put it straight into the playing budget. There is no requirement to publish the allocation, which is one reason the transparency argument keeps coming back around.
The cash-flow problem the payment quietly solves
Timing matters as much as amount at the bottom of the EFL. A club's costs are close to flat across the year — wages, ground maintenance, insurance, the academy — while its income is violently seasonal. Season ticket money lands in a lump in the summer and is then spent down over ten months. Matchday income stops entirely in June and July.
Central payments arrive on a schedule the club knows in advance, which is what makes them useful as security. A League One club that needs to bridge a summer will often be borrowing against a receivable it can point to, and the solidarity payment is the cleanest receivable it has. That is a real benefit and also a real risk: money already borrowed against is money already spent, and a club that has factored two years of central income forward has removed its own shock absorber.
What happens when a club goes down
Relegation from League Two to the National League removes the solidarity payment entirely, in one step, alongside the EFL's other central distributions. There is no taper at that boundary — no equivalent of the parachute arrangement running down from the Premier League. A club that falls out of the EFL loses its central income in the same summer that its gate receipts fall and its commercial deals get renegotiated downward.
This asymmetry gets much less attention than the Premier League one, and in proportional terms it is more severe. The financial consequences of dropping out of the Football League are laid out in more detail alongside the promotion mechanism in how the National League play-offs work.
Reporting, audit and what a supporter can actually see
Clubs in England file accounts at Companies House. Those accounts are the only universally available document, and they are a limited instrument: a smaller club filing under the small-company regime may disclose very little, and "turnover" as a single line tells you nothing about the split between gate, commercial and central distributions.
The leagues publish more at aggregate level than at club level. The Premier League reports its total distributions to the EFL and to the wider game. The EFL publishes its regulations and, at intervals, financial summaries of its divisions. The Football Foundation, being a charity, files with the Charity Commission and publishes a grants record — which makes it the most traceable link in the whole chain, and much the easiest place for a supporter to check what was spent locally.
Supporters' trusts have pushed for club-level disclosure of central payments as a standard note in the accounts, so far without a rule requiring it. The argument for is simple enough: a supporter cannot judge whether a board has spent central income well without knowing how much of it there was. The argument against is competitive, and thinner. Disclosure questions of this kind are the natural territory of supporters' trusts and fan ownership.
The other solidarity: FIFA's cut of an international transfer
Confusingly, the same word describes an entirely different mechanism — one that operates on transfers rather than broadcast income, and that lives in FIFA's regulations rather than the Premier League's.
When a player moves between clubs in different countries during the term of his contract, 5% of any compensation paid is deducted and distributed among the clubs that trained him between his 12th and 23rd birthdays. Each season of training earns a defined slice of that 5%.
A worked illustration makes the shape clear. A player who spent his 12th to 16th birthdays at one English club and then moved to a bigger academy would leave the first club with four seasons at the lower rate, and the second club with the higher-rate seasons that follow. Both are entitled when he later crosses a border for a fee, and the split follows the calendar rather than any judgement about who developed him more.
For a non-league or academy club in England that produced a player who eventually moved abroad, this can be the largest single receipt in the club's history. It also has to be claimed. The contribution is not always paid automatically, the paperwork requires proof of the training period, and small clubs have lost entitlements simply through not knowing they had one.
A separate mechanism, training compensation, applies when a young player signs his first professional contract or moves internationally before turning 23, and is calculated on category-based training costs rather than as a percentage of a fee. The two get confused constantly. Both can apply to the same career at different points in it, and the domestic English equivalent for young out-of-contract players works on a different basis again — set out in the guide to Bosman and free transfers in England.
Where the figures are published, and how to read them
Anyone wanting real numbers rather than recycled ones should go to four places, in this order.
The Premier League's annual report and published handbook set out the distribution rules and the aggregate sums paid. The EFL's regulations set out the conditions attached to receipt, including the circumstances in which payments are withheld. Individual club accounts at Companies House give the club-level position, with the caveats above. The Football Foundation's annual report and grants database cover the grassroots side, project by project.
One warning applies to all of them. Football finance figures circulate for years after they stop being current, because a striking number outlives the season that produced it. A figure quoted without a stated financial year and a stated broadcast cycle is close to useless, and a good deal of what gets repeated about how much the Premier League gives the EFL comes from a cycle that ended some time ago.
The mechanisms in this guide change slowly by comparison. The formula, the divisional split, the charitable route to the grassroots and FIFA's 5% have all been recognisably the same for long enough that understanding them is a better investment than memorising a sum. For where the money comes from before any of it moves, start with Premier League TV rights money; for the spending controls sitting on the other side of the ledger, PSR. The rest of the section is indexed at the England guides hub, and the wider football coverage at /sports/football.