Leeds United financial boost as £40m pot could double during Championship play-offs
The outcome of this year's Championship play-offs will have a small effect on Leeds United's financial position.
Leeds United could claim their share of around £80million extra revenue if Southampton join Ipswich Town in an instant return to the Premier League this month.
Ipswich secured automatic promotion from the Championship on Saturday with a 3-0 win at home to Queens Park Rangers, ensuring they pipped Millwall and Southampton to second place. The latter pair now join Hull City and Middlesbrough in the play-offs, with the semi-final first-legs to be played this weekend.
A 19-game unbeaten run makes Southampton many people’s favourites to win at Wembley and should they achieve promotion, it would benefit Leeds and their Premier League rivals. Like Ipswich, the south coast club suffered relegation last year and were in receipt of parachute payments ahead of their Championship return.
Parachute payments have been in place for 19 years in some form, essentially introduced to help relegated clubs deal with the massive drop in revenue following relegation. Leeds were in receipt of the payments for two seasons following their fall into the Championship in 2023, waiving their third-year instalment having achieved promotion.
Ahead of the current season, Ipswich and Southampton each received 55 per cent of the Premier League’s broadcast revenue equal share - a set amount that all 20 member clubs receive before merit payments - which last season equalled £89million. The pair - and Leicester City, who have now been relegated to League One - therefore received just under £49m each.
That amount would have fallen to 45 per cent this summer, equivalent to around £40m each, but with Ipswich now set to enjoy the full riches of top-flight football, their portion goes back into the Premier League pot. That £40m will now be redistributed back among Leeds and their 19 rivals.
Leeds United in line for added boost if Southampton win
Should Southampton progress past Middlesbrough before beating one of Hull or Millwall at Wembley, their £40m second-year parachute payment will also be shared among top-flight clubs. In theory, that would see around £80m return to the equal share pot, to be redistributed at roughly £4m per team.
Because both Ipswich and Southampton spent just one season back in the top-flight, neither are eligible for a third instalment - like Leeds would have been were it not for promotion last season. But an instant promotion for both would effectively provide a significant, if not game-changing, financial boost to the Elland Road coffers.
Having played their part in a thrilling Premier League relegation battle, Leeds are expected to receive over £100m in broadcast revenue from the current campaign. The Whites will earn their portion of the equal share plus commercial revenue, both from domestic and international deals.
Leeds will also receive a large chunk of revenue based on their final position, known as merit payments, which is exactly the reason neither Daniel Farke nor any of his squad are set to ease up with survival all but secured. Each place in the table has been worth just short of £3m in recent years.
Last season, the team who finished 14th - where Leeds are currently - earned £18.6m in merit payments, whereas the team who finished 10th, for example, were handed £29.1m. That financial boost is another incentive for Farke and his squad to finish as strongly as possible against Tottenham, Brighton and West Ham.