Regardless of the result on Saturday (May 27), Luton Town or Coventry City returning to the top flight of English soccer is a remarkable story and one which very few could have predicted.
Coventry were relegated from the Premier League in the 2000-01 season and have endured uncertain times since. Not owning their own stadium, the club were forced to ground share with Birmingham City for two seasons between 2019 and 2021 and the issue of their home stadium remains complicated.
The team was playing in League Two (the fourth tier of English soccer) as recently as the 2017-18 season where they escaped via the playoffs (a good omen perhaps). Five seasons later, they now find themselves on the brink of a surprise return to the Premier League.
The story for Luton is just as remarkable, having previously played top-flight soccer in England up until 1992, just before the birth of the Premier League era.
In that time since, the club have dropped even lower than Coventry, falling out of the professional soccer set up, into the National League (fifth tier) for the 2008-09 season, battling financial irregularities as the club fell into administration in late 2007.
Like Coventry, the question of Luton’s home ground is another complicated one for any potential future Premier League venture.
Currently playing out of the 10,356-seater Kenilworth Road stadium, the club could be forced to pay £10 million to improve the stadium and bring it up to top-flight standards.
New incoming Premier League money would soften the blow but incur a big loss for the club, which will be moving into a new ground anyway (Power Court Stadium), in 2024 at the earliest.
Various figures are thrown around every year leading up to the playoff final as a means of emphasizing the significance of the game itself. The Championship playoff final is perhaps annually the biggest game of the EFL calendar because of the monetary prize rewards on offer, with the storylines attached always being able to entice all soccer fans across the country.
The standard sum which emerges from varying reports is £170 million ($209.83 million), taken from Deloitte, as the sum of money expected to befall Saturday’s winner over the course of the next three seasons.
These costs are mainly derived from a few key areas, notably the enhanced commercial and matchday revenues generated across the season, with the teams able to increase the value of their brand partnerships because of the allure and global interest of the Premier League.
In addition, these teams can benefit from taking their slice of the Premier League broadcast rights, which are well distributed across the 20 competing teams.
Putting this into perspective, the team which finished bottom of the Premier League in the 2020-21 season (Norwich City) are estimated to have earned $118.31 million in broadcast money alone (across domestic and international sale rights), as part of the Premier League’s overarching deals which are worth $1.83 billion (in domestic sales) and $1.9 billion (in international sales) each year.
In the Championship, teams usually rake in around $9.5 million a year each. Even the new EFL broadcasting deal with Sky Sports, which will come into effect at the start of the 2024-25 season, is worth £187 million ($230.81 million) a year, split between 72 teams, falls a long way short of the money seen in the Premier League.
The third notable financial contribution comes via parachute payments, which will be enjoyed even by a team relegated after a single season in the Premier League. Parachute payments were designed by the league to support relegated clubs in adjusting their financial management back in the lower league.
It prevents these clubs from being stuck in a position where they are paying out on things like player salaries at a Premier League level but only receiving a small fraction of the income they were accepting whilst initially making these payments.
These parachute payments are believed to be around $92.57 million for the following two years after relegation. The issues that have arisen on the back of this surround a level of injustice for the rest of the teams competing in the Championship, who are not competing on an even financial playing field.
The idea of this imbalance each year is a complex one. There is some evidence to support that teams relegated to the second tier have a better chance of returning back to the Premier League than their rivals.
Looking at data over the past 10 league seasons (back until 2012-13), a third of these 30 teams have enjoyed an instant return back to the top-flight, with 17 out of these 30 teams having eventually won back promotion, taking on average only 1.76 seasons to do so.
Whilst these are quite strong statistics to show support for some type of imbalance, on the contrary, 13 of these relegated teams have failed to earn promotion back, with two teams having endured further relegation down to League One in that time.
Analyzing this data from the past 10 years helps show us just what chances either Luton or Coventry will have in the Premier League next season. 13 out of the 30 previously promoted teams endured instant relegation, with promoted teams only enjoying an average of 3.1 seasons in the Premier League before ultimately falling back down the soccer pyramid.
These figures appear even more damning when you look more closely at the teams that were promoted via the playoffs, with some 50% having endured instant promotion, and a lower average length of stay in the Premier League of 2.8 seasons.
The typical short-term stays in the Premier League for these teams are what makes parachute payments seem almost necessary.
How would Coventry or Luton be expected to effectively compete in the Premier League without investing money into the squad and then effectively manage their club revenue when their huge incomings from one year are cut into a small fraction within one or two seasons?
Returning to the notion of these playoff teams enjoying greater commercial revenue next season through means like sponsorship deals, more figures taken from the GlobalData sponsorship database and reports platform highlight the significant difference between the Premier League and Championship in this regard.
Luton’s two biggest kit-based deals (for kit supplier and front-of-shirt sponsor) are valued at $330,000 and $460,000 with Umbro, Star Platform, Ryebridge, and Utilita respectively. Coventry generate $280,000 and $500,000 a year, respectively, in the same deals, with Hummel and Boylesports.
Both teams will look to renegotiate a fairer price for these rights on the back of promotion to the Premier League because of the greater global coverage the partnership is able to offer.
For Luton, this would likely be in the way of renegotiating a price with existing partners, with Umbro having been signed on a long-term multi-year deal since the 2020-21 season, and Utilita having only recently signed a three-year extension in 2022 (through to 2025).
For Coventry, they too have only just signed a new three-year contract with Hummel and will want to revisit the terms of value with them, but the front-of-shirt rights could prove well-timed, with its existing deal with current sponsor Boylesports set to end following the playoff final.
Looking at how much more lucrative these rights could be next season for either team, kit supplier rights in the Premier League this season came in at an average of $25.82 million and $24.37 million for main shirt partnerships.
Even when you take out the figures of the ‘big six’ in the Premier League, they are preferable to those seen in the Championship, at $5.1 million and $9.04 million respectively.
Expect the playoffs to bring the drama, as it always does, with this game meaning so much to both teams.
The Premier League, even away from being known as the land of the riches, is the ultimate dream of every soccer fan and owner, and for one of these two sets of supporters, that sense of euphoria will soon be realized and enjoyed for a minimum of 12 months.
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