A significant report by the independent football regulator has highlighted that English football’s finances are “dangerously exposed, with the majority of clubs living on the edge of financial disaster.” The watchdog’s research found that 94% of clubs are operating at a loss, and over 60% of clubs in the EFL and National League are technically insolvent.
The Independent Football Regulator (IFR) has issued a warning about a “dangerous cocktail of rising debt and an over-reliance on owner funding, leaving clubs and their fans at risk.” The ‘State of the Game’ report also points out that despite the Premier League’s financial success, the significant financial disparities between and within leagues have widened considerably.
Key findings from the report include:
* 94% of clubs across the top five English leagues incurred losses in the 2025-26 season. * 17 clubs in the EFL and National League would still be loss-making even if their players worked for free. * 66% of clubs could not sustain operations for more than 90 days without new owner funding. * 29% of clubs reported they could not survive for more than 30 days without such funding. * 68% of clubs lack a contingency plan should their owner withdraw support.
The IFR asserts that “the underlying foundations of the pyramid are under intense strain and require urgent reform,” and the report should serve as a “wake-up call” for English football.
IFR chair David Kogan stated that seventeen clubs are currently operating in such a way that their non-playing costs would lead to bankruptcy even if players were unpaid. He also noted that thirty-two clubs have only 30 days’ worth of cash reserves, making them vulnerable if owners cease funding. Kogan emphasized the urgency of addressing these issues while financial conditions are still favorable, comparing it to “fix[ing] the house while the sun is still shining.”
The IFR, tasked with enhancing the financial sustainability of football teams, has identified six key areas of financial risk and urged clubs to implement robust contingency plans for situations where owner funding is withdrawn.
Despite ongoing discussions, the Premier League and EFL have not yet agreed on a new funding settlement to increase financial support for the lower leagues from the top flight. The IFR possesses the authority to impose a deal and has indicated it will “not hesitate to use all the powers at our disposal to bring about lasting change” if a solution is not found.
The report also calls for action on increasing losses and for clubs to demonstrate how they consider fan perspectives and are improving diversity and governance in their boardrooms.
Additional findings from the report indicate:
* The average Premier League club now generates more than eight times the revenue of an average Championship club. * The current system of parachute payments from the Premier League to relegated Championship clubs incentivizes overspending, contributing to rising player wage inflation. * Net transfer debt is increasing, and deferred payments and transfer financing are creating interdependencies between clubs, owners, and lenders, heightening the risk of financial stress spreading throughout the game.
Kogan commented that for a century, football has not operated in a consistently solvent and effective manner, but the current involvement of significant money is exacerbating these issues. He added that while the problems were known, the data revealed the dramatic extent of the situation.
The Premier League, EFL, Football Association, and Football Supporters’ Association have all welcomed the report’s findings.
Key points from the report, as outlined by BBC Sport, include:
* The financial situation is deteriorating for clubs in the EFL and National League. * Most Championship, League One, and League Two clubs have less than 30 days of cash reserves. * Over 60% of EFL and National League clubs have liabilities exceeding their asset values. * Wages remain a significant concern, with twenty clubs (primarily in the Championship, League One, and National League) spending over 80% of their revenue on player wages. * The majority of League One clubs spend over 40% of revenue on player wages, with two spending over 100%. * Wage costs have risen significantly across all leagues between 2021-22 and 2025-26: 33% in the Premier League, 32% in the Championship, 71% in League One, and 63% in League Two. * Seventeen out of 18 surveyed EFL club owners favored more robust cost controls, with player wages identified as the primary issue. * Average losses in League One have surged from 6% of revenue in 1992-93 to nearly 50% in 2024-25, and stand at 40% in League Two. * Many clubs rely on just-in-time owner funding, and the majority lack contingency plans if owners cease financial support, leaving them vulnerable due to limited access to alternative financing.
Kogan mentioned that League One and League Two clubs will receive substantially more funding through a new Premier League deal, which, along with development and liquidity funds, could help them overcome current challenges. The report states that many clubs would not currently meet the ‘appropriate financial resources’ requirement under the Football Governance Act, which must be met by May 2030.
Kogan also indicated that a new financial distribution deal between the Premier League and EFL is nearing completion.
The revenue gap between the Premier League and the Championship has continued to widen. In 1992-93, the average Premier League club earned 2.7 times more than a Championship club; by 2024-25, this ratio had increased to 8.7 times.
The revenue disparity within the Championship has also grown, partly due to increased parachute payments. While solidarity payments for non-parachute clubs have risen, year-one parachute payments have seen a substantial increase from £12m to £48.7m.
The revenue gap between the top six Premier League clubs and the rest of the league has also widened significantly, from an average of £9.4m in 1992-93 to £421m by 2024-25. The top six clubs now account for 56% of Premier League revenues.
