The Independent Football Regulator’s draft State of the Game report, launched in Manchester on Tuesday, says English football’s finances are dangerously exposed and most clubs are living on the edge of financial disaster. The IFR found that English football generated £9 billion in revenue last season, yet 94% of clubs across the top five divisions were loss-making, according to Sky Sports.
The report spans the Premier League, the EFL and the National League, and describes a pyramid where rising debt, over-reliance on owner funding and short-term spending to keep pace with rivals have left clubs and fans exposed to risk.
Main Findings Of The State Of The Game Report
David Kogan, chair of the IFR, framed the contradiction at the heart of English football’s finances. “What we see in English football is two completely different positions. The first is £9bn comes in every year, yet we have 94 per cent of the clubs of the 160 we regulate are trading unprofitably,” Kogan said, per Sky Sports.
The report points to a widening gap between divisions as a core driver of the problem. The average Premier League club generates more than eight times the revenue of an average Championship club, a gap the report says fuels reckless spending further down the pyramid. Parachute payments, made by the Premier League to clubs relegated from the top flight, were cited as a factor contributing to significant overspending among Championship clubs that do not receive them.
Financial Risk Across The EFL And National League
The lower divisions came in for particular scrutiny. More than 60% of EFL and National League clubs are technically insolvent, meaning their liabilities exceed the book value of their assets, the IFR found. Seventeen clubs in those divisions have operating costs that exceed revenue even before paying players, meaning they would lose money regardless of their wage bills.
The report also found that 32 clubs across the divisions hold less than 30 days of cash cover in their accounts, leaving them vulnerable to insolvency if ownership changes suddenly. The IFR described this combination of thin cash reserves, rising debt and dependence on owner money as a dangerous cocktail that leaves clubs and supporters at risk.
What The Regulator Is Calling For
The IFR said current distribution arrangements across English football create risk and need reform, though the report stopped short of detailing specific proposals for how those arrangements should change. Kogan outlined one concrete step already underway.
“There are three moves that are taking place that we think will help on this. The second is that from November onwards we’re going to be licensing clubs, and by licensing those clubs we’re going to intervene directly in individual clubs where we think they’ve got exposures that we can help them resolve and that includes things like having a business plan that involves having cash cover more than 30 days; it involves having genuine provision for the debts that they’ve raised,” Kogan said.
The club licensing system set to begin in November will allow the regulator to step into individual clubs’ finances where it identifies exposure, requiring business plans built around stronger cash reserves and genuine debt provisions.
Context: Legal Costs And A Competitive But Strained Pyramid
The report acknowledged that the Premier League’s commercial success has made English football the richest and most competitive league structure in the world, and that international interest and investment keep growing. But it warned the underlying foundations of the pyramid are under intense strain and need urgent reform.
Separately, the Premier League’s own administrative legal costs illustrate the financial pressures circulating around the English game. Those costs rose from £45 million in 2015-16 to £212 million in 2024-25, according to ESPN, covering most of the period the league spent fighting its case against Manchester City along with separate disputes over associated party transaction rules.
What’s Next
The IFR’s club licensing regime is set to begin in November, giving the regulator direct oversight tools to intervene at clubs it identifies as financially exposed. The report remains in draft form, and the regulator has not detailed a timeline for broader reforms to distribution arrangements across the divisions.
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