The Meaning of Relegation in the English Premier League: How it works

The meaning of relegation in the Premier League has generated a lot of interest recently. But understanding how relegation in English soccer works is a topic that many may find confusing.

I’ve been watching Premier League soccer for over 20 years, and today I’m going to explain what you need to know about this process.

Relegation in the Premier League is a system of transferring the three lowest placed teams at the end of the season down to the division below. Relegation means these three teams start the following season competing in the “Championship” division of English soccer.

Once you understand this concept, it’s easier to understand what this means and how it may impact your favorite Premier League team.

meaning of relegation in the premier league post title image

How Does Relegation Work in the English Premier League?

Before we look at the impact on a relegated team and why the Premier League uses a system of relegation, let’s first look at the details of how it works. 

How Premier League relegation works:

  • The lowest three positions in the Premier League are designated as the “Relegation Zone.”
  • The teams that finish the season in one of the bottom 3 positions drop to the lower Championship Division, where they will compete in the following season.
  • If teams finish equal on points, their final position is determined by a goal difference. Goal difference is the number of goals a team has scored minus the number of goals scored against them.
Teams at the bottom of the premier league table
Teams at the bottom of the league table

Relegation works by moving down (or relegating) the teams that finish near the bottom of the Premier League table to the lower-level “Championship” division. 

A total of three teams are relegated from the English Premier League at the end of each season.

This is a bad thing because this can cause the team to lose money and risk losing their best players to those teams still in the Premier League. 

I covered this topic in more detail in my recent article – Relegation in Soccer: What it means and how it works – but basically: If a team is relegated, they must compete in a lower division until they are promoted up to the higher division again.

The only way to achieve this is by winning their division or winning the division playoffs. 

It’s often harder for newer teams to work their way up than for more established teams to experience relegation.

Every team in the Premier League could face relegation, which is why teams work so hard to prevent finding themselves in that position.

With the fear of relegation, teams fight hard until their last match of the season to avoid relegation. 

While you cannot be promoted from the Premier League (as it is the highest division in the country), you can be promoted from one of the lower divisions.

Promotion is a goal for teams who want to be among the best.

While it may be a controversial topic in sport, relegation adds an exciting factor by making teams work hard until the end to avoid relegation. 

What Happens When a Premier League Team Gets Relegated?

Relegation is a negative experience for teams, which is why they work as hard as possible to avoid relegation.

The Premier League is an elite league, which is why teams fight hard to remain in this division. 

Not only does relegation in English soccer mean that a team drops to a lower division, but there are other downsides to being relegated. 

  • Losing out on financial sponsors
  • Risk of losing players
  • Finding harder to attrack new players
Soccer player holding head after relegation
Soccer player after relegation

One major problem with relegation is that teams can lose out on some very lucrative deals, significantly impacting them financially.

For example, they may lose sponsorship deals and television deals, which can add up to a lot of money lost.

Another problem is that teams risk losing players due to relegation.

Players may want to leave to go to another team in the Premier League, a situation that especially happens to more renowned teams when they are relegated.

Players want to go to teams that will win trophies, and these other teams will quickly pick up good players from relegated teams since they can often get them for a discount.

Lastly, it’s hard for teams to attract better players after relegation.

Players favor teams in the premier league, which is why it’s hard to attract players after relegation.

There’s also the fact that relegated teams often have financial problems due to relegation, which makes it harder to compete with the salaries of other teams for top players.

How Often Does Relegation Happen in the Premier League?

Relegation in the Premier League happens every year at the end of the season. As soon as the last game of the season is complete, the league finalizes the position of the teams. The teams with the least number of points are relegated.

The Premier League is one of the top soccer leagues in the world, so making it to that league is the ultimate goal for many teams. 

Because three teams get relegated to the lower divisions at the end of the season, this also gives three teams from the division below the opportunity to get promoted up. 

How Much Money Do You Get If You Get Relegated from the Premier League?

Because the Premier League generates so much money, there is a high financial cost to being relegated from this division.

Soccer clubs that play in the Premier League can earn a significant income just by being associated with the elite league. This is because they get all sorts of deals like sponsorship and television deals from being part of this group of teams. 

Clubs also get increased attendance at their games, which earns even more money. Additionally, those teams that compete in the Premier League end up with a base amount of money at the end of the year.

However, when a Premier League team is relegated to the Championship division, they get what’s known as “parachute payments” from the Premier League. 

parachute payments for relegated team
Parachute Payments for Relegated Teams

The point of parachute payments is to help teams cope with any loss of income that they suffer from due to being relegated from the Premier League.

This is particularly important because many of the players that remain at the club will still be under contract with Premier League wages. 

Recent changes to the parachute payments mean that these payments a distributed to relegated clubs over three years, rather than a 4-year distribution.

The relegated clubs receive 55% of the equal share of the Premier League broadcast revenue paid to current Premier League clubs in the first year of their relegation.

The following year this goes down to 45%, and then 20% in the third year. This revenue can vary, depending on different factors. 

Should a team get promoted again to the Premier League during these three years of parachute payments, these payments stop once they rejoin the league and teams receive their entire Premier League benefits. 


Relegation is a significant downside for teams for various reasons, as you can see from this article.

The goal for teams from England and Wales is to remain as one of the top teams and remain in the Premier League. Otherwise, the teams lose money and potentially their best players. 

Check out my post on why soccer uses a running clock or the offside rule in soccer, for more helpful soccer info!

Ben Clayfield

Hi! My name's Ben. I've played, watched, read about, and enjoyed soccer throughout my life. I really enjoy finding out more about the game I love and sharing it with you all. Find out more about me here - Ben Clayfield

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