English football’s financial success is masking widespread dependence on wealthy owners and rising debt, according to a major report from the Independent Football Regulator, which warns that two-thirds of clubs could not survive beyond 90 days without fresh owner funding.
The regulator’s draft State of the Game report finds that 94% of clubs across the top five men’s divisions in English Football were loss-making before tax in 2025/26, despite the game generating around £9 billion in revenue. Its central warning is that growing income has not produced greater sustainability as clubs are spending more, borrowing more and leaving themselves exposed if an owner withdraws support or results deteriorate.
The report sets out a six-point action plan covering revenue distribution, financial losses, National League oversight, risk management, fan engagement and corporate governance. It also puts clubs on notice that meeting the regulator’s full licensing requirements by May 2030 will require significant changes to how many operate.
In their joint foreword, IFR chair David Kogan and chief executive Richard Monks describe “an underlying fragility - a game loaded with risk that can no longer be ignored”.
The document remains a draft, with consultation responses due by 8 December 2026. Its 2025/26 financial analysis uses a mixture of actual results and forecasts submitted by clubs, an important qualification to figures that nevertheless point to deep structural problems.
Clubs living from one funding injection to the next
Among respondents to the regulator’s financial information request, 66% said they could not survive for more than 90 days without new owner funding. A further measure of the immediate vulnerability is that 29% could not last beyond 30 days.
That dependence is often built into day-to-day operations rather than reserved for exceptional spending. Between March 2025 and March 2026, 67 clubs received at least six funding injections, while 28 received 12 or more. Most EFL and National League clubs did not have a contingency plan for their owner becoming unable or unwilling to continue financing them.
The IFR identifies owner dependence and inadequate contingency planning as recurring features of financial distress, citing clubs including Bury, Derby County, Reading and Sheffield Wednesday. Its proposed response is to require clubs to prepare for trouble before missed payments become a crisis.
Plans to meet the “Appropriate Financial Resources” requirement are to be agreed before the start of the 2027/28 season. By May 2028, all clubs must also produce stress tests and mitigating action plans covering relegation, falling revenue and the loss of owner funding. Some will need larger cash reserves; others may need to curb borrowing or reduce existing debt.
Parachute payments face renewed scrutiny
The report places revenue distribution at the centre of the reform debate, particularly the divide between the Premier League and Championship.
In 2025/26, Premier League clubs received between 10 and 17 times as much in domestic competition distributions as Championship clubs without parachute payments. A club in its first year of parachute support received around five times as much as a non-parachute Championship rival.
The payments cushion relegated clubs against a sharp fall in income, but the regulator finds that they also encourage other Championship clubs to overspend in pursuit of promotion. Non-parachute clubs spent an average of 84% of revenue on player wages, compared with 57% among those receiving parachute payments.
Even with that protection, relegation remains financially severe. Clubs dropping out of the Premier League in 2024/25 experienced an average £70 million reduction in revenue, while wage costs fell by only £29 million.
The sporting evidence is more nuanced than a simple claim that parachute payments determine promotion. Clubs receiving them took 17 of the Championship’s 30 promotion places over the last decade, but the IFR says that performance is broadly in line with comparable relegated clubs in European and lower-league competitions. Its strongest concern is the financial incentive the system creates.
The regulator wants a new distribution arrangement that reduces those distortions while protecting clubs against relegation. It also warns that sending more money down the pyramid will not solve the problem if the additional income simply feeds higher costs.
The problem extends beyond excessive player wages
The financial deterioration is particularly striking below the Championship. Between 2021/22 and 2025/26, average annual losses in League One rose from £2.4 million to £7.5 million. In League Two, they increased from £600,000 to £2.7 million. Over the same period, player wage costs rose by 71% in League One and 63% in League Two.
But the report challenges the idea that wage restraint alone can repair every club’s finances. At 17 clubs across the EFL and National League, non-playing operating costs exceeded total revenue. Those clubs would have lost money even if their players had played for free.
That finding broadens the challenge from squad budgets to the underlying business model - how clubs generate income, maintain facilities and cover the costs of professional football. The regulator calls for stronger National League governance, noting that 23 of its 24 clubs are now professional despite the competition operating with comparatively limited central resources.
It also questions whether existing league rules will sufficiently constrain spending. New Championship squad-cost rules could permit an additional £460 million in squad expenditure, according to the report’s analysis. The IFR says it will consider using licence conditions to drive change and may discuss additional powers with government if financial risks are not addressed.
Debt adds another layer of risk
The regulator’s measure of debt rose from approximately £2.8 billion in 2020/21 to £4.1 billion in 2024/25 and is forecast to reach £5.1 billion by 2026/27. That measure excludes non-interest-bearing shareholder loans.
Borrowing is not inherently evidence of mismanagement, the report recognises its role in infrastructure investment, recruitment and working capital. The concern is the combination of rising obligations, persistent losses and exposure to sudden changes in income. Aggregate interest costs increased from around £97 million to £455 million between 2020/21 and 2024/25.
The report also highlights transfer factoring, through which clubs turn future transfer instalments into immediate cash. Around £1.2 billion of transfer receivables have already been monetised through such arrangements, reducing the future cash available from those player sales.
Supporters must be heard, not simply consulted
The proposed changes extend beyond balance sheets. Although fans are generally positive about opportunities to engage with clubs, supporter groups are less convinced that consultation influences decisions. Only 39% were satisfied with how their views were considered, while 37% were satisfied with communication and transparency around decisions.
Clubs will be required to produce annual fan consultation reports showing how they have gathered, considered and responded to supporter views. By May 2030, they must meet the statutory fan-engagement threshold, including consulting supporters before relevant decisions, explaining their thinking and taking feedback into account.
Licensed clubs must also publish corporate governance statements every two years from October 2027, providing greater visibility over how they are run and the steps they are taking to improve boardroom and senior leadership diversity.
What it means for English football
The immediate consequence is not a blanket spending cap or an enforced redistribution deal. It is a clearer timetable for clubs to demonstrate that their finances can withstand setbacks, coupled with a warning that football’s existing arrangements are not adequately controlling risk.
For owners, that means proving the durability of their funding rather than relying on repeated emergency injections. For leagues, it means finding a distribution settlement that supports stability without triggering another spending race. For supporters, it means more formal evidence that consultation affects how their club is run.
The next stage is consultation on the draft. The regulator has made its intended direction clear: financial resilience must become part of the way clubs operate, rather than something considered only when an owner stops paying.
A ticking time bomb?
English football is not short of money; it is short of resilience. The IFR’s report describes the game generating around £9 billion in revenue, yet one in which 94% of clubs across the top five divisions were loss-making in 2025/26 and two-thirds said they could not survive more than 90 days without fresh owner funding. That is not the profile of a healthy industry. It is the profile of a system held together by wealthy benefactors, short-term borrowing and the assumption that the money will keep flowing.
The time bomb is not a single explosion waiting to happen. It is a chain of vulnerabilities - clubs dependent on just-in-time owner injections, wage bills that rise faster than income, relegation cliff edges that can remove tens of millions from a balance sheet, and debt that increasingly has to be serviced at a far higher cost. When 29% of clubs say they could not last a month without new funding, the margin for error is dangerously thin.
The most obvious trigger is an owner walking away. The report found that most EFL and National League clubs have no contingency plan for that scenario, despite many receiving repeated injections throughout the year. A club can appear stable while its survival depends on one individual’s continued willingness, or ability, to fund losses. Bury, Derby County, Reading and Sheffield Wednesday are not historical curiosities; they are warnings.
Relegation is another detonator. A newly relegated Premier League club lost an average of £70 million in revenue, while wage costs fell by only £29 million. Add relegation covenants, which can increase repayment obligations or borrowing costs after relegation, and a club that expected to compete for promotion can quickly find itself fighting for solvency instead.
A weaker broadcast market could be the wider shock. The report warns that future media-rights growth is uncertain, while clubs remain heavily reliant on broadcast income. If revenues flatten or fall, clubs cannot simply cut their way out of trouble overnight - player contracts, transfer instalments, stadium costs and debt repayments are already locked in.
Transfer debt adds a further fault line. English clubs reported £4.8 billion in transfer payables against £1.5 billion in receivables in 2025/26, creating net transfer debt of roughly £3.4 billion. The growing use of transfer factoring converts future income into cash today, leaving clubs with substantial future outflows. If one club cannot meet its obligations, the financial strain can travel through the system to other clubs, owners and lenders.
The greatest danger is that English football mistakes growth for stability. More revenue has not stopped losses, debt or owner dependence from rising; in many divisions, it has simply raised the stakes. Unless revenue is distributed more effectively, cost growth is controlled and clubs are forced to plan for shocks, the next financial crisis will not begin with a dramatic collapse. It will begin with a missed funding injection, a relegation clause, a transfer instalment or a broadcaster paying less than expected and then spread quickly through a pyramid already running on borrowed time.