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. Research by the Independent Football Regulator (IFR) found that 94% of clubs are loss-making, and more than 60% of EFL and National League clubs are technically insolvent.
The ‘State of the Game’ report warns of “a dangerous cocktail of rising debt and an over-reliance on owner funding, leaving clubs and their fans at risk”. It also finds that, despite the economic success of the Premier League, the financial “cliff-edges” between and within leagues have grown significantly. The findings come after Bury were expelled from the EFL amid financial difficulties in 2019, the first club to drop out since Maidstone’s liquidation in 1992.
The key findings
The IFR’s analysis paints a stark picture across the professional pyramid:
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 for more than 90 days without new owner funding, and 29% reported they could not survive more than 30 days without such funding.
68% of clubs have no contingency plan if their owner walks away.
The IFR states 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.
IFR chair David Kogan said: “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.
“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.”
Calls for action
Tasked with improving the financial sustainability of teams, 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 It urged clubs to put robust contingency plans in place in case owner funding is withdrawn.
Despite years of talks, 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. 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”.
The regulator also urged action on rising losses and called on clubs to show how they take fans’ views into account, and what steps they are taking to improve boardroom diversity and governance.
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, a growing number of clubs have effectively mortgaged instalments they are due to receive in transfer payments in return for an immediate injection of cash. Known as ‘transfer financing’, it 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, 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.
A worsening outlook below the Premier League
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, and two 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 (94%) EFL club owners surveyed were in favour of more robust cost controls. One investor told the report: “the single biggest issue is player wages”.
Average League One losses increased from 6% of revenue in 1992-93 to almost 50% in 2024-25. In League Two, they stand at 40%.
Many clubs rely on owner funding on a just-in-time basis, receiving frequent injections throughout the year. The majority of EFL and National League clubs do not have a contingency plan if their owner becomes unable or unwilling to continue financing operations, which leaves them particularly exposed given their limited access to alternative finance.
Kogan said: “League One and the League Two clubs will receive significantly more funding [through a new deal with the Premier League]. 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 are required to meet this standard by May 2030.
Kogan added that “owners are very well aware of the need now for some sort of coherent structure in which costs are being managed”, and said the new financial distribution deal between the Premier League and the EFL is close.
The gap between the Premier League and the rest
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, or 8.7 times the £38.9m earned in the second tier.
The revenue gap within the Championship has also grown, partly because of the increase in parachute payments. 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. A club in its first year after relegation saw its payments increase from £12m to £48.7m.
The absolute revenue gap between the big six and the rest of the Premier League has also widened significantly. In 1992-93, the six biggest clubs by revenue earned £9.4m more on average. By 2024-25, that average gap had grown to £421m. The big six account for 56% of Premier League revenues, with the remaining 14 teams sharing 44%.
Kogan summed up the problem: “Nobody in football for 100 years has believed that football was trading in a solvent and effective state. 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.”