Majority of clubs on edge of 'financial disaster' - regulator
English football's finances are "dangerously exposed, with the majority of clubs living on the edge of financial disaster", a new report says.
A new report by the Independent Football Regulator (IFR) has revealed the precarious financial situation faced by the majority of English football clubs. According to the research, 94% of clubs are operating at a loss, and over half of the EFL and National League clubs are technically insolvent. The regulator warns that rising debt and excessive reliance on owner funding pose a significant risk to the clubs and their supporters.
The "State of the Game" report highlights the growing gap between the financial health of the Premier League and the rest of the English football pyramid. Despite the Premier League's economic success, the league's financial cliff-edges between and within leagues have widened considerably. Seventeen clubs across the EFL and National League would still go bust even if their players played for free, while 66% of clubs could not survive for more than 90 days without new owner funding. A shocking 30% of clubs could not survive more than 30 days without such funding.
Furthermore, the report found that 60% of clubs have no business plan in place, leaving them ill-prepared for future financial challenges. The IFR chair, David Kogan, stated that the foundations of the football pyramid are under intense strain and require urgent reform. He also warned that the current system of parachute payments from the Premier League to relegated Championship clubs is contributing to overspending, which in turn is driving up player wages and exacerbating the financial crisis.
The IFR has outlined six areas of concern, urging clubs to develop robust contingency plans in case owner funding is withdrawn. The regulator also calls for improved financial transparency, boardroom diversity, and governance within clubs. As the Premier League, EFL, Football Association, and Football Supporters' Association have all welcomed the report's findings, there is a clear call for immediate action to address the alarming financial situation facing English football clubs.
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