How much does relegation cost a Premier League team? How Tottenham, West Ham could face financial catastrophe

As the Premier League season moves into its final months, a cluster of clubs find themselves looking anxiously in their rearview mirrors.

The teams that finish in the bottom three of England’s top division are relegated to the Championship, to be replaced by the top two in English football’s second tier and the winner of the division’s end-of-season playoffs, contested by the teams that finish from third to sixth.

The battle to remain in the Premier League is heating up heading into the final third of the campaign. Wolves and Burnley are starting to look beyond help in 20th and 19th respectively, but there could be an almighty scramble to avoid the final spot in the drop zone.

Some big names are in trouble. Nottingham Forest are juggling a Europa League campaign and the threat of relegation, while West Ham and Tottenham will not have factored such an eventuality into their moves to 60,000-seater stadiums over recent years. 

For these clubs, demotion could be financially catastrophic.

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How much does relegation cost a Premier League team?

The cost of relegation will vary on a case-by-case basis, but football finance expert Kieran Maguire told the Daily Mail in January 2026 that a club dropping down to the Championship will be hit to the tune of £100 million ($136 million).

“The club that finished bottom of the Premier League two years ago, the last set of data we have, got £111m,” Maguire said. “I think by the end of this season [2025/26], we’ll be looking somewhere in the region of £120m from the television companies alone. That will drop to around £45m in the Championship. So that is already about £75m.

“You then look at gate receipts. I don’t think clubs will necessarily have to cut prices as far as season tickets are concerned because you’re offering more matches in the Championship than in the Premier League, but for matchday tickets, if West Ham have Hull or Swansea on a Tuesday night, they’re not going to be able to charge prices to the level they have in the Premier League.

“Matchday revenues from hospitality will be substantially down because the commercial department really will have their work cut out to sell all those boxes. If we look at West Ham, they are making around £45m in the Premier League. They won’t get anywhere near that in the Championship.”

Another financial factor that is harder to quantify is remodelling a Premier League squad for the Championship. Clubs such as Leeds United and Burnley, who were only promoted back to the top flight last season, would be expected to include relegation clauses related to a reduction in wages in player contracts as a matter of course. Players signing for Champions League Tottenham this season will not have had to thumb through similar fine print. When a club that does not take such standard precautions against relegation find themselves in trouble, the effect of going down can be particularly damaging.

Big earners can be hastily moved on by relegated clubs, but often at a fraction of the transfer fee they would hope to attract, not least because the market for players who have performed badly enough to be relegated is generally not as big as it might have been.

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How do Premier League parachute payments work?

To mitigate the damaging impact of Premier League television money being taken away from relegated clubs, the league has a system of financial relief known as parachute payments.

In the first season after a team is relegated, they received 55% of their previous broadcast revenue from the Premier League. This drops to 45% and 20% in the second and third seasons, respectively.

What is a relegation six-pointer?

This is a phrase thrown around regularly when teams in the relegation mix play one another. Leeds’ 3-0 win over Nottingham Forest on February 6 and West Ham’s 2-0 triumph at Burnley on February 7 were both bona fide relegation six-pointers.

The most obvious thing to be completely clear about here is that teams get three points for winning these games, as they do for any Premier League match. They do not get six points. The phrase comes from the effective six-point swing that occurs from picking up three points and denying your rival three points.

For example, when West Ham played Burnley, they were five points above the Clarets. Defeat would have meant a two-point gap; in reality, the gap was eight points at fulltime.

How many points do teams need to be safe from relegation?

It’s a cliche now to talk about 40 points as the amount teams need to avoid relegation. This is a fair benchmark, not least because West Ham are the only team in the history of the 20-team Premier League to go down with more than 40 points, when they dropped down with a haul of 42 in 2002/3.

The Hammers will certainly be keen to avoid such a grim double, especially as this season looks like one where a solid points total might be required. In each of the past two seasons and in 2020/21, teams would have stayed up with a mere 30 points. Leeds are 15th and already have 30 with 12 games to play this time around.

The magic 40-point mark feels like something to gun for in 2025/26. For one unlucky club, it might not even be enough.