The Independent Football Regulator’s (IFR) first report on the state of English football has highlighted increasing losses, reliance on ownership funding and how to fix these issues
English football is standing on the edge of financial disaster as 94% of clubs are operating on losses creating unsustainability across the country’s football pyramid.
The Independent Football Regulator’s (IFR) ‘State of the Game’ report revealed the damning findings yesterday (13 October) as losses continue to rise, revenue gaps between the Premier League and the English Football League (EFL) continue to widen and regulations have come into question in recent weeks.
The report found that Premier League and EFL Championship losses among its clubs have risen since the 2021/22 season. Average Premier League losses have increased from £20m to £44m, while Championship club losses have rose from £11m to £22m.
League One clubs average losses more than trebled, from £2.4m in 2021/22, to £7.5m in 2025/26 and exceeded 65% of revenue. In League Two, average losses increased more than fourfold from £600,000 to £2.7m over the same period, exceeding over 40% of revenues.
With losses mounting over recent years, English football clubs are relying on external and owner funding, such as loans and other forms of financing to meet day-to-day operations.
On average, for every £1 a club earns in revenue, Premier League clubs require 33p in external investment (0.33%), Championship clubs 57p (0.57%), League One clubs 72p (0.72%), and League Two clubs 26p (0.26%).
Across the top five divisions – including the non-league National Division – at least 30 clubs received external financing equivalent to more than 50% of their revenues.
The IFR found this can result in short-term financial distress. Among its findings, 67 clubs (57%) received six or more owner funding injections, while 28 clubs (24%) received 12 or more.
This leaves 66% clubs admitting that they could not survive for more than 90 days if owner funding stopped. Furthermore, 29% believe they could not even survive for 30 days if it stopped.
UK Culture Secretary, Lisa Nandy, believes the State of the Game report has blown the doors off the game and emphasises the importance of the IFR which was established in 2025 through the passing of the Football Governance Bill.
“Football fans for years have lived with the anxiety of knowing their club could be one bad owner or poor month away from ruin,” said Nandy.
“This report doesn’t just validate that anxiety, it has blown the doors off the game with the most stark uncovering of the state of football club finances in England today.
“It underlines that the fight to establish an Independent Football Regulator was vital to safeguarding the future of English football for its fans. The findings are undeniable: there is no plan B.”
4 Premier League clubs are insolvent
One of the most revealing findings from the IFR’s report is that many Premier League and English football clubs are “technically insolvent”.
Up to four (20%) Premier League clubs have liabilities that exceed the book of their assets, while more than 60% of EFL and National League clubs are also unable to pay off their debts with the liquidity they have.
Outside a transfer window, most clubs do not have sufficient liquid assets to cover their short-term liabilities and are reliant on funding from owners.
Beyond club assets and liquidity, even if a club were to sell off its entire squad market value, 46% of EFL clubs would still have negative equity.
The report outlines the rising costs of squads for player transfer fees and staff as a cause for the rise in costs, making some clubs unable to pay back transfer fees agreed if it wasn’t for ownership funding.
With the rise of transfer fees, a majority English football clubs pay in instalments through the process of amortisation, which divides the total sum across several years, primarily to comply with the Premier League and EFL’s financial regulations. This, however, has increased the debt on the books of many clubs.
In the 2025/26 season, English clubs owed £4.8bn in transfer fee instalments, while only expecting £1.5bn in transfer fees incoming. This means there is a net transfer fee debt of £3.4bn across all English football clubs.
A recent UEFA report revealed Premier League clubs accounted for 60% of all transfer activity last summer transfer window, spending on average €24m (£20.65m) per player, whereas other European leagues, such as La Liga, Serie A and the Bundesliga, spend €4m-€5m per player.
Andrea Traverso, Executive Director of Finance, Sustainability and Research, said in the UEFA report that amortisation plays a huge role in financial unsustainability, creating a “more fragile model” and could prove to become a lot more risky if clubs continue to take on short-term cash debt as transfer values continue on their current trajectory.
Are Premier League regulations working?
English football finances have been thrusted more into the spotlight partially due to the introduction of financial regulations.
The Premier League made its financial fair play (FFP) effective during the 2013/14 which have since morphed into Profit & Sustainability Rules (PSR) and now, Squad Cost Ratio (SCR) rules, which have been phased into the current 2026/27 season.
As a result of this increased scrutiny of clubs’ financial positions, many high-profile clubs have broken PSR rules, including Everton, Nottingham Forest and Leicester City. Manchester City were also found guilty of an unprecedented 114 charges of breaking the Premier League’s financial regulations and has lodged an appeal against the independent commission’s verdict.
As a result, Premier League administrative and legal expenses have increased by 370%. Expenses cost the league £45m in 2015/16m, but have since grown to £212m in 2024/25.
What the IFR are proposing to fix
Concluding its report, the IFR outlined six key focus areas to embed an action plan to help reduce systemic risk to English football’s finances and infrastructure.
- Revenue distribution should be reformed, with a focus on financial stability and not encouraging reckless spending
- Leagues, clubs and stakeholders should take action to reduce financial losses
- National League should align with other football governance
- Clubs must improve how they manage financial risk
- Clubs must show a willingness and provide evidence of taking fans’ opinions into account
- Clubs need to improve corporate governance and progress Equality, Diversity and Inclusion (EDI)
The IFR stated it will now work on this action plan for English football by the time all clubs are granted full licenses by May 2030.
“These clubs belong to their fans,” said Nandy. “They are nothing without their fans. We are on their side and we will always fight for them.
“I urge the football authorities and those running clubs to consider these findings for the good of the game, for the fans, and for the communities of which they are so often the bedrock of.”
