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A recent comprehensive report from the independent football regulator (IFR) has revealed that the financial health of English football clubs is alarmingly precarious. The study highlights that a vast majority of clubs are operating at a loss, with nearly two-thirds of those in the English Football League (EFL) and National League classed as insolvent. The regulator expresses concern over increasing debt levels combined with heavy dependence on funding from club owners, a situation that leaves both clubs and their supporters vulnerable.
The IFR’s ‘State of the Game’ report draws attention to widening financial disparities within and between the various tiers of English football, despite the Premier League’s substantial economic success. Key findings include that 94% of clubs in the top five leagues reported losses during the 2025-26 season, and 17 clubs would still be loss-making even if their players provided their services for free. Alarmingly, 66% of clubs lack the financial reserves to last more than three months without owner support, while almost a third would fail to survive past a single month under the same circumstances. Moreover, more than two-thirds of clubs have no fallback strategies should their owners withdraw their funding.
David Kogan, chair of the IFR, emphasised the severity of the situation, stating: “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.” He further warned that “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.” Kogan called for urgent action before the flow of money slows, noting that now is the time to address these problems while conditions are still relatively favorable.
With a mandate to enhance financial sustainability, the IFR identified six major areas of financial risk and urged clubs to establish effective contingency plans in anticipation of any reduction or withdrawal of owner funding. The report highlights ongoing tensions between the Premier League and the EFL, which have yet to reach an agreement on a redistribution of funds to support lower tiers of the football pyramid. The regulator warned that if football stakeholders fail to find a solution, it will employ its full authority to enforce necessary reforms. Additionally, the IFR is pushing for measures to control growing losses, as well as improvements in fan engagement, boardroom diversity, and the governance of clubs.
The financial divide between leagues is stark. Premier League clubs now earn over eight times the revenue of Championship clubs on average, a sharp increase from the early 1990s. The system of parachute payments, designed to assist relegated clubs, has inadvertently encouraged excessive spending in the Championship, driving up wages and financial risk. Transfer-related debts have also risen, with deferred payments linking clubs and financial backers, potentially spreading financial strain throughout the game.
The report paints a bleak picture of the cash flow and wage structures in lower leagues. Most clubs in the Championship, League One, and League Two maintain cash reserves sufficient for fewer than 30 days of operations. Many clubs, especially in League One and the National League, spend an excessive proportion of their income on player wages, with some exceeding 100% of their revenue on salaries alone. Between the 2021-22 and 2025-26 seasons, wage expenses surged sharply across all leagues, most notably by 71% in League One and 63% in League Two.
Owner funding remains critical to the survival of many clubs, but more than two-thirds lack any contingency plan if this support ceases. The new funding deal currently being negotiated between the Premier League and the EFL aims to provide increased financial assistance to clubs in League One and League Two, which the regulator hopes will help alleviate some of the current financial pressures. However, many clubs are still not meeting the financial resource standards required by the Football Governance Act, which sets a deadline of May 2030 for compliance.
Over the decades, the financial gap between the Premier League and lower divisions has widened dramatically. In the early 1990s, the average Premier League club earned less than three times the revenue of a Championship club; now that multiple has expanded to nearly nine times. Parachute payments to relegated clubs have grown substantially, contributing to a wider revenue gap within the Championship itself. Meanwhile, the Premier League’s “big six” clubs have significantly outpaced the rest of the league, commanding 56% of total Premier League revenue, with the remaining 14 clubs sharing just 44%.
David Kogan concluded by noting that while English football has never operated in a fully solvent manner, the scale and extremity of its current financial challenges are unprecedented, underscoring the urgent need for reform to safeguard the game’s future
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