English football generates around £9 billion a year, yet 94% of clubs across its top five men’s divisions are operating at a loss, according to a landmark report from the Independent Football Regulator (IFR).
The watchdog’s first draft State of the Game report, published on Tuesday, 13 October, paints a troubling picture of a sport whose commercial success has failed to provide financial security for many of its clubs.
Its findings reveal that 32 clubs could not survive more than 30 days without continued financial support from their owners. Seventeen would remain loss-making even if they paid nothing in player wages.
The figures raise an uncomfortable question for English football: how can a game generating billions in revenue leave so many of its clubs dependent on their owners simply to keep operating?
Clubs dependent on owner funding
The regulator’s assessment covers 116 clubs across the Premier League, Championship, League One, League Two and National League.
While the financial circumstances of individual clubs vary considerably, the overall picture is one of mounting losses, significant debt and continued reliance on wealthy owners to cover operating costs.
According to the Financial Times, Premier League clubs recorded average pre-tax losses of £44 million, while the financial position of clubs further down the pyramid is particularly precarious.
The report also highlights the scale of football’s transfer liabilities, with clubs collectively carrying around £3.4 billion in net transfer debt.
Making a loss does not necessarily mean a club is on the verge of collapse. Some owners have the resources and willingness to provide long-term financial support. The danger arises when clubs become so dependent on that funding that a change in ownership circumstances could threaten their survival.
For supporters, the consequences can extend far beyond the balance sheet. Financial distress can lead to points deductions, player sales, restrictions on recruitment and, in the worst cases, the loss of a football club altogether.
The financial cliff edge between divisions
One of the central problems identified by the regulator is the enormous financial disparity between the Premier League and the divisions below it.
Promotion to the top flight offers access to broadcasting income that can transform a club’s finances. Relegation can produce an equally dramatic reduction in revenue, often while clubs remain committed to contracts agreed during their Premier League years.
These financial cliff edges create powerful incentives for clubs to spend beyond their sustainable means in pursuit of promotion or to avoid relegation.
The Championship is particularly exposed. Clubs seeking a place in the Premier League compete against recently relegated sides receiving parachute payments, which are intended to help them adjust to the loss of top-flight income.
Those payments provide protection against the immediate financial consequences of relegation, but they can also give recipient clubs a substantial advantage over Championship rivals.
The regulator is examining how these arrangements affect competitive balance and financial sustainability throughout the pyramid.
The disparity is striking. The Guardian reports that the regulator’s analysis found the Premier League’s highest-earning club generates 605 times the revenue of the lowest-earning National League club.
Warnings from football’s recent history
English football has already experienced the consequences of financial mismanagement and unsustainable ownership.
Bury were expelled from the Football League in 2019, while Macclesfield Town were wound up in 2020. Derby County, Reading and Wigan Athletic have also endured serious financial difficulties, including administration or regulatory sanctions.
These cases differ in their circumstances, but they demonstrate how quickly problems involving debt, ownership and cash flow can affect a club’s future.
The regulator’s challenge is to prevent similar crises rather than intervene only after clubs have reached the point of financial emergency.
Premier League and EFL face pressure over funding
The report arrives amid a long-running disagreement between the Premier League and English Football League over how revenue should be distributed throughout the professional game.
The Premier League has proposed increasing financial support for EFL clubs by £180 million annually over a 10-year period, on top of existing arrangements. The EFL is seeking a different settlement, including £207 million in annual additional funding and a mechanism to reconsider the agreement after five years.
At the heart of the dispute is the question of how much money should flow from the wealthiest competition in English football to the divisions below, and what financial controls should accompany that support.
Both organisations welcomed the regulator’s findings on Tuesday and expressed support for reaching a football-led agreement.
However, the central disagreement remains unresolved. The EFL argues that the distribution system must address the competitive effects of parachute payments as well as the wider financial gap between divisions.
The IFR, established under the Football Governance Act 2025, has statutory powers to intervene in financial distribution disputes if the relevant conditions are met and the football authorities cannot reach an agreement.
It also has powers relating to club licensing, financial sustainability, governance and the suitability of owners and senior executives.
Those responsibilities mean the regulator’s role extends beyond redistributing money. It must also consider whether clubs are being run responsibly and whether additional revenue would improve financial stability or simply encourage further spending.
What happens next?
The State of the Game findings form part of a draft assessment, with consultation taking place before the final report is published in spring 2027.
The regulator will use the findings to inform its approach to financial oversight, governance and the wider sustainability of English football.
David Kogan, the IFR chair, and chief executive Richard Monks have stressed the urgency of addressing the financial risks embedded in the sport.
There is no simple solution. Greater revenue sharing could help narrow the gap between divisions, but without effective spending controls it could also encourage clubs to increase their expenditure. Stronger financial rules may reduce risk, although they must be designed carefully enough to allow responsible investment and competition.
The regulator has now put figures to a problem that supporters have witnessed for years. The question is whether the authorities can agree on reforms before another club pays the price.
Football Fanatix take
English football has never been richer, yet much of the game remains financially fragile. That contradiction should concern everyone who cares about its future.
Clubs cannot continue gambling on promotion, relying on wealthy benefactors or spending money they do not have. But simply handing out more money will not solve the problem if it fuels another round of reckless spending.
The Premier League’s commercial success deserves recognition, but so does its responsibility to the wider football pyramid. The game needs a fairer distribution of revenue, stronger financial safeguards and owners who understand that football clubs are more than private investments.
The Independent Football Regulator has exposed the scale of the problem. Its real test will be whether it can help deliver lasting change before more supporters discover that the club they have followed all their lives is fighting for survival.
