New Football Regulator Warns 94% of English Clubs Are Loss-Making
English football’s new regulator has warned that record income is masking an increasingly fragile club economy, with 94% of teams across the top five divisions operating at a loss despite the game generating £9 billion last season.
Key findings from the regulator’s assessment
| Item | Figure | Context |
|---|---|---|
| English football revenue | £9bn | Generated in the previous season |
| Clubs making losses | 94% | Across the top five divisions |
| Clubs reliant on owners within 30 days | 32 | Unable to remain viable without shareholder funding |
| Projected total debt | More than £5bn | Forecast by the end of the current season |
The Independent Football Regulator published its draft State of the Game report on Tuesday, setting out concerns over liquidity, debt and the dependence of many clubs on continued owner support. It found that 17 clubs would still post losses even if they had no player wage bill.
David Kogan, the IFR chair, described English club football as both the world’s strongest and wealthiest competition landscape, but one facing a serious financial threat. He said the present period of high income should be used to deal with losses and debt before broadcast receipts begin to weaken.
Broadcast income is expected either to flatten or fall in the next rights cycle, while net transfer debt is put at about £3.4 billion. The report projects aggregate debt across the English game will exceed £5 billion by the conclusion of this season.
Kogan said the regulator must treat a potential decline in media revenue as a material risk rather than assume the current financial conditions will last indefinitely. With £9 billion entering the game annually, he argued that this was the time to improve clubs’ financial resilience rather than wait for revenue to fall.
Revenue gap and the proposed New Deal
The report calls for a reshaping of football’s revenue-distribution system. In 2024-25, the average Premier League club received 8.7 times the income of an average Championship side. In the Premier League’s first season, 1992-93, that multiple stood at 2.7.
Kogan has attended discussions involving the Premier League and the EFL over a proposed New Deal covering funding arrangements and cost controls. He said the two leagues had found broad agreement on a number of issues and believes the package being discussed could address some of the regulator’s concerns if completed.
Parachute payments remain a central point of disagreement. The assessment concludes that the payments can distort incentives in the Championship and contribute to excessive spending, but also notes their role in cushioning relegated clubs. Teams dropping from the Premier League in 2024-25 suffered an average revenue reduction of £70 million.
The proposal under discussion includes merit-based payments from Premier League solidarity funding. Championship clubs finishing in the top 10 would receive larger sums, while relegated clubs eligible for parachute payments would receive less. Kogan said this would narrow the financial difference between those groups, even if it would not meet every objective the EFL had pursued in previous years.
Licensing plans and financial controls
Under the IFR’s licensing regime, clubs will have to submit a plan explaining how they intend to satisfy the Football Governance Act’s Appropriate Financial Resources requirement by 2030. The measure is intended to reduce reliance on owner injections and improve financial-risk management.
Richard Monks, the IFR’s chief executive, said the regulator will be alert to clubs attempting to comply with the letter rather than the purpose of financial rules. The report points to transactions such as Chelsea’s sales of hotels to companies connected to its ownership as an example of the type of arrangement regulators must be equipped to assess.
Monks said clubs would understandably test the limits of any rule, and that an effective regulator must anticipate such behaviour when drafting and enforcing its framework.
Six-point action plan
- Reform revenue distribution to improve stability, ease the financial shock of Premier League relegation and limit the distortive effects of parachute payments in the Championship.
- Require leagues, clubs and other stakeholders to take steps that reduce losses.
- Introduce action at National League level so governance reflects the financial risks in that part of the pyramid.
- Improve clubs’ handling of financial risk, including the 2030 Appropriate Financial Resources plans required through licensing.
- Ensure clubs can demonstrate that supporter views are properly considered.
- Increase diversity among club boards and senior executive teams.
The regulator will also publish a yearly assessment of risks facing the game, with the first scheduled for spring 2028.
Football Supporters’ Association chair Tom Greatrex said the findings should serve as a warning to the authorities and should result in lasting reforms rather than a short-term response.
