English football’s finances are “dangerously exposed, with the majority of clubs living on the edge of financial disaster”, according to a landmark report from the independent football regulator (IFR).
The ‘State of the Game’ report paints a stark picture of the game’s underlying health. It found that 94% of clubs in the top five English leagues made losses in 2025-26, and that more than 60% of EFL and National League clubs are technically insolvent. Seventeen clubs across the EFL and National League would be loss-making even if their players played for free. The IFR describes a “dangerous cocktail of rising debt and an over-reliance on owner funding, leaving clubs and their fans at risk”.
The dependence on owners is laid bare in the figures: 66% of clubs could not survive for more than 90 days without new owner funding, and 29% said they could not survive more than 30 days. Some 68% of clubs have no contingency plan in place should their owner walk away.
IFR chair David Kogan told BBC Sport that clubs are trading in circumstances that leave them acutely vulnerable. “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 said. “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.”
Tasked with improving clubs’ 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of concern around financial risk and urged clubs to put robust contingency plans in place in case owner funding is withdrawn. It also claims “the underlying foundations of the pyramid are under intense strain and require urgent reform”, and says its report “should serve as a wake-up call” for the game.
Despite years of talks, the Premier League and the 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 warned 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”. Kogan said the new financial distribution deal between the Premier League and the EFL is close, and that League One and League Two clubs will receive significantly more funding under it. “That funding will be used along with a development fund and a liquidity fund potentially to help them get over the humps they’re all currently facing,” he said. The report also urges action on rising losses, and calls on clubs to show how they take fans’ views into account and what steps they are taking to improve boardroom diversity and governance.
A growing trend of clubs mortgaging off future transfer cash features prominently in the findings. So-called ‘transfer financing’ — effectively selling instalments a club is due to receive in transfer payments in return for an immediate injection of cash — has become “an increasingly important source of liquidity”. In 2020-21 it stood at £55m. By 2024-25 it had reached £779m, a more than 14-fold increase, and about £1.2bn of future transfer income has now been monetised through such arrangements, an almost 22-fold rise on 2020-21. Across English football, 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. The report warns that net transfer debt is rising, and that deferred transfer payments and transfer financing create links between clubs, owners and lenders which increase “the potential for financial stress to spread across the game”.
The outlook is deteriorating across the EFL and National League. Most Championship, League One and League Two clubs hold less than 30 days of cash, and more than 60% of EFL and National League clubs have liabilities exceeding the book value of their assets. On wages, 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 rose across all leagues between 2021-22 and 2025-26: by 33% in the Premier League, 32% in the Championship, 71% in League One and 63% in League Two. Average League One losses increased from 6% of revenue in 1992-93 to almost 50% in 2024-25, while in League Two the figure stands at 40%. Seventeen of the 18 EFL club owners surveyed (94%) were in favour of more robust cost controls, with one investor telling the report that “the single biggest issue is player wages”.
The divide between the top flight and the rest continues to widen. 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, 2.7 times the £3.9m earned by the average Championship club; by 2024-25 that had risen to £341m, or 8.7 times the £38.9m in the second tier. The existing system of parachute payments “contributes to the incentives for Championship clubs to overspend which drives up player wage inflation”, the report says. From 2007-08 to 2025-26, the amount a non-parachute Championship club received in solidarity payments from the Premier League increased from £0.9m to £5.3m, while a year-one parachute club saw payments rise from £12m to £48.7m. The absolute revenue gap between the big six and the rest of the Premier League has widened too: in 1992-93 the six biggest clubs by revenue earned £9.4m more on average, a figure that had grown to £421m by 2024-25. The big six now account for 56% of Premier League revenues, with 44% split between the remaining 14 teams.
On liquidity and solvency, the report concludes that many clubs “would not currently meet the requirement under the Football Governance Act to hold ‘appropriate financial resources'”. Clubs must meet that standard by May 2030. Kogan struck a measured note on whether the sport can change. “Nobody in football for 100 years has believed that football was trading in a solvent and effective state,” he 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. We knew the problems were there, I don’t think anybody realised that the data was going to show quite how dramatic they are.”
The Premier League, the EFL, the Football Association and the Football Supporters’ Association have all issued statements welcoming the findings.