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. The regulator’s research found that 94% of clubs are loss-making, and more than 60% of EFL and National League clubs are technically insolvent.
The Independent Football Regulator (IFR) warns of “a dangerous cocktail of rising debt and an over-reliance on owner funding, leaving clubs and their fans at risk.” Its ‘State of the Game’ report also finds that, despite the economic success of the Premier League, the financial “cliff-edges” between and within leagues have grown significantly.
The scale of the risk
The report sets out several stark 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 more than 90 days without new owner funding, and 29% reported they could not survive more than 30 days without such funding. Additionally, 68% of clubs have no contingency plan if their owner walks away.
The IFR claims that “the underlying foundations of the pyramid are under intense strain and require urgent reform,” and says the 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 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,” Kogan added. “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.”
A call for action
Tasked with improving clubs’ financial sustainability, the IFR outlined six areas of concern around financial risk. It urged clubs to put robust contingency plans in place in case owner funding is withdrawn.
The Premier League and EFL have yet to agree a new funding settlement that would see the top flight share more money with the rest of the pyramid, despite years of talks. The IFR has the power to impose a deal. It 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. It wants clubs to explain the steps they are taking to improve boardroom diversity and governance.
The report highlights several other pressures. The average Premier League club now earns more than eight times the average Championship club. It says the existing parachute payment system, under which the Premier League pays relegated clubs in the Championship, “contributes to the incentives for Championship clubs to overspend which drives up player wage inflation.” Net transfer debt is rising, and deferred transfer payments and transfer financing create links between clubs, owners and lenders that increase “the potential for financial stress to spread across the game.”
“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. 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.
Clubs mortgaging future transfer income
Over the past five years, clubs have increasingly effectively mortgaged instalments they are due to receive from transfers in exchange for an immediate injection of cash. This practice, called ‘transfer financing’, has become “an increasingly important source of liquidity.”
Transfer financing stood at £55m in 2020-21. By 2024-25 it had reached £779m, a more than 14-fold increase. About £1.2bn of future transfer income has now been monetised through financing arrangements, almost 22 times the 2020-21 figure.
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.
A worsening picture in the EFL
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, and 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 wages, including two that spend more than 100%.
Wage costs rose across all leagues between 2021-22 and 2025-26, by 33% in the Premier League and 32% in the Championship. Seventeen of 18 surveyed EFL club owners (94%) favoured more robust cost controls. One investor told the report: “the single biggest issue is player wages.”
Average League One losses rose from 6% of revenue in 1992-93 to almost 50% in 2024-25. In League Two, losses stand at 40%. Many clubs rely on owner funding on a just-in-time basis, receiving frequent injections throughout the year. Most EFL and National League clubs have no contingency plan if their owner becomes unable or unwilling to keep financing operations, which leaves them especially exposed given their limited access to other sources of finance.
“League One and League Two clubs will receive significantly more funding [through a new deal with the Premier League],” Kogan said. “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.”
On liquidity and solvency, the report says many clubs “would not currently meet the requirement under the Football Governance Act to hold ‘appropriate financial resources’.” Clubs must meet this standard by May 2030. “Owners are very well aware of the need now for some sort of coherent structure in which costs are being managed,” Kogan said, adding that the new financial distribution deal between the Premier League and the EFL is close.
The widening gap
The gap between the Premier League and the Championship has grown. 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, the average Premier League club earned £341m, 8.7 times the £38.9m earned by the average second-tier club.
The revenue gap within the Championship has also widened, partly because parachute payments have increased. From 2007-08 to 2025-26, the solidarity payments a non-parachute Championship club received from the Premier League rose from £0.9m to £5.3m. Over the same period, a year-one parachute club’s payments rose from £12m to £48.7m.
The gap at the top has widened significantly, too. In 1992-93, the six biggest clubs by revenue earned £9.4m more on average than the rest of the league. By 2024-25, that average gap had grown to £421m. The big six now account for 56% of Premier League revenues, with the remaining 14 teams sharing 44%.