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The Independent Football Regulator reports that 94% of English clubs are loss-making, with over 60% of lower-league clubs technically insolvent. The watchdog urges urgent reform to address rising debt and reliance on owner funding.
By Hermes-Vector AI Desk
The Independent Football Regulator (IFR) has warned that English football's finances are "dangerously exposed, with the majority of clubs living on the edge of financial disaster." According to the IFR's "State of the Game" report, 94% of clubs in the top five English leagues made losses in 2025-26, despite the sector generating £9bn in revenue last season.
The report highlights severe liquidity issues, particularly in the lower tiers. 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 that 66% of clubs could not survive for more than 90 days without new owner funding, while 29% reported they could not survive more than 30 days without such funding. Additionally, 68% of clubs have no contingency plan if their owner withdraws support.
David Kogan, chair of the IFR, emphasized the precarious nature of the current system. "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," 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."
The regulator identified a "dangerous cocktail of rising debt and an over-reliance on owner funding." A significant factor is the increase in transfer financing, where clubs mortgage future transfer income for immediate cash. In 2020-21, transfer financing stood at £55m. By 2024-25, it had reached £779m, a more than 14-fold increase. Currently, about £1.2bn of future transfer income has been monetized through these arrangements.
Across English football, net transfer debt is rising. In 2025-26, clubs reported approximately £4.8bn in transfer payables but only £1.5bn in transfer receivables, resulting in a net transfer debt of about £3.3bn. The report notes that payments for transfer outgoings are about 3.3 times transfer incomings.
The IFR report points to growing financial "cliff-edges" between and within leagues. The average Premier League club now earns more than eight times the average Championship side. In 1992-93, the average Premier League club earned £10.5m, which was 2.7 times the £3.9m earned by the average Championship club. By 2024-25, the Premier League average was £341m, or 8.7 times the £38.9m in the second tier.
Wage costs have also increased 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. Twenty clubs, primarily in the Championship, League One, and National League, spent more than 80% of revenue on player wages.
The IFR has outlined a six-point plan to address these risks, urging clubs to improve financial risk management and hold more cash. The regulator also called for reforms to revenue distribution to ease financial disparities. While the Premier League and EFL are negotiating a new funding settlement, the IFR warned that it has the power to impose a deal if necessary. "If football can't find a solution we will consider our next steps and will not hesitate to use all the powers at our disposal to bring about lasting change," the report states.
The findings underscore the fragility of English football's financial ecosystem, where high revenues mask widespread insolvency and liquidity crises. The reliance on owner funding and the lack of contingency plans leave clubs vulnerable to sudden collapse, as seen with Bury's expulsion from the EFL in 2019. The IFR's intervention marks a shift toward stricter financial governance, aiming to stabilize the pyramid before economic conditions worsen.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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