English football’s £9bn revenues mask widespread financial fragility

English football’s record revenues are failing to deliver financial resilience, according to the Independent Football Regulator’s draft ‘State of the Game’ report, which identifies widespread losses, rising debt and dependence on owners across the professional pyramid.The report found that 94 per cent of clubs are loss-making, more than 60 per cent of EFL and National League clubs have liabilities exceeding the book value of their assets, and more than a quarter could not survive beyond a month without owner funding.IFR chair David Kogan said: “At the heart of English football’s success is a massive contradiction. While some of our clubs are among the richest and most competitive in the world, others are standing on the edge of financial disaster.“Skyrocketing revenues have been outpaced by costs which in turn have pushed up debt, loss-making and an over-reliance on owner funding.“A significant number of clubs have told us they would not survive if their owners walked away. This lack of resilience can no longer be ignored.“Anyone reading this report can be in no doubt about the need for intervention.”The findings challenge the assumption that growing international investment and broadcasting income necessarily make English football more secure, with clubs’ spending commitments absorbing revenues and leaving limited protection against disruption.The IFR identified a widening gap between divisions, with the average Premier League club earning more than eight times the revenue of its Championship counterpart.That difference makes promotion financially transformative and relegation potentially destabilising, creating incentives for clubs to spend ahead of their resources in pursuit of a place in the top flight.The report found that parachute payments contribute to those incentives within the Championship, where clubs competing against recently relegated teams face pressure to increase spending, particularly on wages.The problem also extends beyond player costs: 17 EFL and National League clubs would remain loss-making even without paying their players because their other operating expenses exceed revenue.That finding suggests wage restraint alone cannot resolve every club’s position, with some facing a more fundamental mismatch between their income and the cost of maintaining professional operations.Technical insolvency, as defined in the report, does not necessarily mean a club is about to close, but the combination of weak balance sheets, limited cash and dependence on discretionary owner support creates substantial vulnerability.The majority of clubs lack a basic contingency plan for the withdrawal of that support, leaving their ability to meet obligations exposed to changes in an owner’s circumstances or willingness to invest.Kogan told Sky: “So what we are trying to do is get ahead of the problem and take an interventionist approach with individual clubs that need it to help them get to the point of being stable and secure because too many clubs get close to the edge and depend on one thing and one thing only, which is a new owner coming down the track.“That supply of owners may dry up, and supply of media money may dry out so we have to now get ahead of the game and give them levels of security and stability that allow them to go into the future.”The regulator has outlined a six-point response covering financial risk management, revenue distribution, rising losses, supporter consultation and boardroom governance and diversity.Proposals include stronger cash reserves and credible contingency plans, alongside measures enabling clubs to rebuild balance sheets rather than immediately committing additional income to higher spending.The report arrives as the Premier League and EFL continue negotiations over a new funding agreement, with the EFL seeking £207m in additional annual solidarity payments against the top flight’s latest £180m proposal.The Premier League said: “The Premier League shares the IFR’s preference that there should be a football-led solution to revenue distributions. As the Report makes clear, new funding must go hand in hand with effective financial controls and wider reforms to strengthen clubs.“We believe the proposal we have made to the EFL, which was unanimously approved by Premier League clubs in July, meets the objectives the IFR has set out in its Report. The League remains committed to concluding a long-term partnership with the EFL that is fair, generous and balances the interests of all clubs.”The central challenge is ensuring that redistribution improves resilience rather than simply financing another round of competitive spending, with additional funding and effective cost controls needing to reinforce one another.English football’s commercial strength gives it resources that many rival markets lack, but the report indicates that success is being measured too heavily through revenue and investment rather than clubs’ capacity to withstand financial shocks.With licensing work beginning in November, the IFR intends to address individual exposures while working with leagues on longer-term controls, turning the debate from how much money enters football towards how securely the game manages it.