English football finances dangerously exposed, independent regulator warns

State of the Game report flags systemic risk across the pyramid

English football’s finances are "dangerously exposed, with the majority of clubs living on the edge of financial disaster", according to a landmark report by the independent football regulator.

Research by the watchdog found 94% of clubs are loss-making, and more than 60% of EFL and National League clubs are technically insolvent. The regulator, the Independent Football Regulator, warns of "a dangerous cocktail of rising debt and an over-reliance on owner funding, leaving clubs and their fans at risk".

The ‘State of the Game’ report suggests that despite the economic success of the Premier League, the financial ‘cliff-edges’ between and within leagues have grown significantly.

Key findings

• 94% of clubs in the top five English leagues made losses in 2025-26
• 17 clubs across the EFL and National League would be loss-making even if their players played for free
• 66% of clubs could not survive for more than 90 days without new owner funding
• 29% of clubs reported they could not survive more than 30 days without such funding
• 60% of clubs have no kind of business plan at all

The IFR claims "the underlying foundations of the pyramid are under intense strain and require urgent reform", and its report "should serve as a wake-up call" for English football.

"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," IFR chair David 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."

"That is a very, very risky scenario. This is the moment of addressing these problems before money starts to dry up. We can actually fix the house while the sun is still shining and that's essentially what our role is going to be in this."

Cost controls and funding settlement

Tasked with improving teams’ financial sustainability, the IFR outlined six areas of concern around financial risk, and urged clubs to put robust contingency plans in place in case owner funding is withdrawn.

Despite years of talks, the Premier League and EFL are yet to agree a new funding settlement that would see the top flight share more money with the rest of the pyramid. The IFR has the power to impose a deal and warns that "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 regulator also urges action on rising losses and calls on clubs to show how they take fans’ views into account, and the steps they are taking to improve boardroom diversity and governance.

Transfer financing and debt

The report found the average Premier League club now earns more than eight times the average Championship side. The existing system of parachute payments "contributes to the incentives for Championship clubs to overspend which drives up player wage inflation".

Net transfer debt is rising. Payments for transfer outgoings are about 3.3 times transfer incomings. In 2025-26, English clubs reported approximately £4.8bn in transfer payables but only £1.5bn in transfer receivables — a net transfer debt of about £3.3bn.

Over the past five years there has been a growing trend to mortgage off instalments a club is due to receive in transfer payments in return for an immediate injection of cash. Transfer financing stood at £55m in 2020-21 and reached £779m by 2024-25. Now about £1.2bn of future transfer income has already been monetised.

"Nobody in football for 100 years has believed that football was trading in a solvent and effective state," Kogan said. "It's not how football has ever really operated. But I think now where there's so much more money involved, the extremes get more extreme."

EFL and National League outlook

The report says the financial situation is worsening for clubs across the EFL and National League. Most Championship, League One and League Two clubs hold less than 30 days of cash. More than 60% of EFL and National League clubs have liabilities exceeding the book value of their assets.

Twenty clubs — primarily in the Championship, League One and National League — spent more than 80% of revenue on player wages. The majority of League One clubs spend more than 40% of revenue on player wages, including two spending more than 100%.

Wage costs have increased 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.

Seventeen of 18 EFL club owners surveyed were in favour of more robust cost controls. Average League One losses increased from 6% of revenue in 1992-93 to almost 50% in 2024-25. In League Two, it stands at 40%.

Many clubs rely on owner funding on a just-in-time basis, receiving frequent injections throughout the year. The majority of EFL and National League clubs do not have a contingency plan if their owner becomes unable or unwilling to continue financing operations.

Premier League gap

In 1992-93, the average Premier League club earned £10.5m, 2.7 times the £3.9m earned by the average Championship club. By 2024-25 it was £341m, or 8.7 times the £38.9m in the second tier.

The revenue gap within the Championship has also grown because of parachute payments. From 2007-08 to 2025-26, solidarity payments to a non-parachute Championship club rose from £0.9m to £5.3m, while a year-one parachute club saw payments increase from £12m to £48.7m.

The Premier League, the EFL, the Football Association and the Football Supporters’ Association have all issued statements welcoming the findings.