English Football on ‘Edge of Financial Disaster’ as 94% of Clubs Lose Money

The chair of the Independent Football Regulator says English football must act before it is too late to deal with its money problems, after a new report found that almost every club in the top five divisions is losing money.

The IFR published its draft “State of the Game” report on Tuesday. It found that English football brought in £9 billion ($11.9bn) in revenue last season, yet 94% of clubs in the top five divisions made a loss. Thirty-two clubs could not last more than 30 days without money from their owners, and 17 would still lose money even if their players worked for free.

IFR chair David Kogan said English club football is at once the “richest, best and most deeply competitive in the world while also standing on the edge of financial disaster.”

The report expects total debt in English football to pass £5bn ($6.6bn) by the end of this season. Net transfer debt is about £3.4bn ($4.5bn), and TV money is expected to level off or drop in the next cycle.

Kogan told the Press Association that now is the time to act. “At the moment, the sun is shining. There’s £9bn a year coming in. This is the very moment to address the issues of liquidity and losses and debt, before suddenly you see the money going backwards and it’s too late,” he said. “And our intention is to act before it’s too late. And I believe, actually, the world of football wants that, and that’s what we’re going to do.”

He also said everyone has to plan for the chance that TV income falls. “Everyone needs to take into account the fact that nothing is ever forever,” Kogan said.

The gap between rich and poor clubs is another focus. In 2024-25, the average Premier League club earned 8.7 times more than the average Championship club. In 1992-93, the first Premier League season, the figure was 2.7 times. The IFR wants changes to how money is shared out.

Kogan has sat in on talks between the Premier League and the EFL, which runs the lower leagues, over a “New Deal” on funding and cost controls. 

“I have observed them dealing with issue after issue after issue, and reaching broad consensus on those issues, and inherently believe that the deal they’re talking about now, if it comes off, might be effective in addressing some of the issues that we raise,” he said.

Parachute payments, the extra money paid to clubs that drop out of the Premier League, remain a sticking point. The report says they push Championship clubs to overspend, but admits they are needed because clubs relegated in 2024-25 lost an average of £70 million ($92.5m) in revenue.

Kogan said the deal being discussed includes merit payments, so part of the money going from the Premier League to the EFL would depend on league position. 

“Clubs in the top 10 positions of the Championship are going to receive more money,” he said. “Clubs being relegated [who are] due parachute payments are going to get less money and the delta, which was ‘that’ [hands wide apart], is going to go to ‘that’ [hands closer together].”

He admitted it would not give the EFL everything it wanted a few years ago. “Does that achieve everything that the EFL might have wanted three or four years ago? No. But it goes a long way towards addressing the issue. There are a lot of moving parts here and we hope they reach an agreement.”

To cut clubs’ reliance on owner funding, the IFR will make clubs commit, as part of its licensing system, to a plan showing how they will meet the “Appropriate Financial Resources” rule by 2030.

IFR chief executive Richard Monks said the regulator is watching for clubs finding clever ways around the rules, such as Chelsea selling hotels to firms linked to their owners to meet Premier League financial rules. “They understand what’s going on, and crucially, they’re a cynical bunch,” he said. He added: 

“However a rule is phrased, a regulator should look at that rule and think, ‘What do we think a club would do in that situation with that rule?’ They will legitimately try and push the boundaries as far as they possibly can.” He called that “perfectly reasonable” and said the regulator’s job is to expect it.

Football Supporters’ Association chair Tom Greatrex said the report must be an “alarm call” that leads to “real and lasting change.”

The report sets out a six-point plan:

• The first point is to reform how revenue is shared, to ease the hit of relegation from the Premier League and reduce the effect of parachute payments on the Championship.
• The second is for leagues, clubs and others to act to cut losses.
• The third is to make sure governance at National League level matches the risk there.
• The fourth is for clubs to manage financial risk better, including meeting the 2030 requirement.
• The fifth is for clubs to show how they take fans’ views into account.
• The sixth is for clubs to make progress on diversity in the boardroom and senior jobs.

The IFR will also publish a yearly risk assessment, with the first due in spring 2028.