Landmark Report Exposes Financial Fragility Across English Football
The Independent Football Regulator (IFR) has published its draft 'State of the Game' report, delivering a damning verdict on the financial health of English football. The report, released on Tuesday, found that 94 per cent of clubs in the top five English leagues made losses in the 2025-26 season, with the majority living "on the edge of financial disaster."
According to the IFR, more than 60 per cent of EFL and National League clubs are technically insolvent, meaning their liabilities exceed the book value of their assets. The report also revealed that 66 per cent of clubs could not survive for more than 90 days without new owner funding, while 29 per cent would collapse within 30 days if that funding were withdrawn. Furthermore, 68 per cent of clubs have no contingency plan should their owner walk away.
"The underlying foundations of the pyramid are under intense strain and require urgent reform," the IFR stated, describing the situation as a "dangerous cocktail of rising debt and an over-reliance on owner funding, leaving clubs and their fans at risk."
Key Findings: A Game Loaded with Risk
The 'State of the Game' report, which took 18 months to compile, paints a picture of an industry that generates enormous revenue—£9bn last season—but distributes it unevenly and operates on precarious financial footing. Despite the Premier League's global success, the report highlights "financial cliff-edges between and within leagues," with the average Premier League club earning more than eight times the revenue of an average Championship club.
The IFR identified six areas of concern, including excessive short-term spending to chase promotion, wage inflation, and a reliance on parachute payments that fuels overspending in the Championship. The report found that 17 clubs across the EFL and National League would be loss-making even if their players played for free, as their non-playing costs exceed revenues.
"Seventeen clubs are now trading in such a way that if their players played for free, their non-playing costs would mean they would go bust," IFR chair David Kogan told BBC Sport. "Thirty-two clubs are operating on only 30 days' cash. If the owner chooses not to pay cash at the end of the month, those clubs go bust. That is a very, very risky scenario."
Debt levels across English football are forecast to exceed £5bn by the end of the current season, with Premier League clubs accounting for around 75 per cent of the total.
Why It Matters: The Stakes for Clubs and Communities
The IFR's findings underscore a persistent and growing crisis in English football governance. The regulator, which was signed into UK law last year, has a mandate to improve financial sustainability and protect clubs as community assets. The report cites recent examples of financial distress at Sheffield Wednesday, Derby County, Reading, and Wigan Athletic, as well as the collapses of Bury and Macclesfield Town in 2019 and 2020.
"When a club is taken to the brink of collapse, as Sheffield Wednesday, Derby and Wigan were in recent times, it affects not just the team and their supporters but the whole community and the local economy," wrote Kogan and IFR CEO Richard Monks in the report's opening remarks.
The IFR's warning comes amid ongoing negotiations between the Premier League and EFL over a new funding settlement. Despite years of talks, the two bodies have yet to agree on a deal that would see more money shared with the lower divisions. The IFR has the power to impose a settlement if no agreement is reached, and it has signaled it will not hesitate to use that authority.
"We can actually fix the house while the sun is still shining," Kogan said. "This is the moment of addressing these problems before money starts to dry up."
Reaction and Next Steps
The report has been described as a "wake-up call" for English football. The IFR has urged clubs to put robust contingency plans in place and has outlined six areas of financial risk that require urgent attention. It remains to be seen whether the Premier League and EFL can reach a deal, or whether the regulator will intervene.
Perspective: A Turning Point for Football Governance?
The IFR's 'State of the Game' report represents a watershed moment for English football. For the first time, an independent regulator has provided a comprehensive, data-driven assessment of the game's finances, exposing the extent to which clubs at all levels are reliant on owner largesse. The findings are likely to intensify pressure on the Premier League and EFL to agree on a redistribution deal and on clubs to adopt more sustainable business models.
However, the report also raises questions about the IFR's ability to enforce change. While it has statutory powers, including the ability to impose a funding settlement, its success will depend on cooperation from clubs and leagues. The threat of intervention may be enough to spur action, but the underlying drivers of financial risk—promotion chasing, wage inflation, and inequality between divisions—are deeply entrenched.
As English football grapples with these challenges, the IFR's report serves as a stark reminder that despite its global appeal and enormous wealth, the game remains perilously close to the edge. The coming months will be crucial in determining whether the regulator can deliver on its promise to protect clubs and communities from financial ruin.
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