English football on ‘edge of financial disaster’, warns game’s new regulator
Widening losses and rising debts leave most of country’s clubs in perilous position despite Premier League’s riches
English football “stands on the edge of financial disaster”, the game’s independent regulator has warned, as widening losses and rising debts leave clubs dangerously reliant on funding from their owners.
While the English professional game generated annual revenue of about £9bn last year, 94 per cent of teams lost money, according to the Independent Football Regulator’s debut State of the Game report, published on Tuesday. In the Premier League, annual pre-tax losses have more than doubled since 2022 to an average of £44mn.
The Premier League generates more revenues than any other football league in the world, its leading clubs are bought and sold for billions of dollars and top players sign multimillion-pound contracts, but its riches contrast starkly with the situation further down the English football pyramid.
Almost two-thirds of the clubs outside the top division had liabilities exceeding their assets, making them “technically insolvent”, the regulator said. More than a quarter of clubs would not survive for a single month without additional shareholder funding.
The report “demonstrates how it is possible for English club football to simultaneously be the richest, best and most deeply competitive in the world while also standing on the edge of financial disaster”, IFR chair David Kogan and chief executive Richard Monks wrote.
In response to questions from journalists about the guilty verdict handed down last month to Premier League leaders Manchester City, Kogan stressed the “absolute” independence of the regulator and threatened to quit if the body faced any political interference.
“Our independence is absolute, and my independence, personally, is absolute,” Kogan said at a press conference in Manchester. “Any form of political interference in the way we operate is going to result in my resigning from this role. And I stand by that completely.”
Manchester City was found guilty by an independent commission of artificially inflating its financial position by more than £900mn over almost a decade. The club has appealed against the verdict.
English football has attracted a wave of investment in recent years, much of it from the US. Between the 2020/21 season and 2024/25, more than 78 transactions took place worth in excess of £7bn combined, the IFR found. Yet returns have so far been poor.
Since 2020/21, investors across the top five leagues of English football had lost 41 per cent of their original investment, the IFR estimated. In the same period, the FTSE 100 index had returned 36 per cent.
Kogan said that clubs were trading on the basis that “the roulette wheel for new owners is always there”, but that further cost rises or a drop in media income would challenge that assumption and leave clubs exposed.
The IFR pointed to several potential risks facing the game in the near future, including increased uncertainty around the strength of the broadcast market as the media industry consolidates.
The build-up of £3.4bn of net transfer debt in the system had also left clubs facing “substantial future net cash outflows” that would need to be funded.
Lisa Nandy, secretary of state for culture, media and sport, said football fans had for years “lived with the anxiety of knowing their club could be one bad owner or poor month away from ruin”.
“This report doesn’t just validate that anxiety, it has blown the doors off the game with the most stark uncovering of the state of football club finances in England today.”
The IFR said that the current model of financial distribution across the game needed reform, suggesting more money should flow from the Premier League to smaller clubs, but not in a way that encouraged “imprudent spending” on players. It also called on clubs to keep more cash on hand, and for leagues and owners to work together to reduce losses.
Kogan was appointed last year as chair of English football’s new football regulator, which aims to “protect and promote” the sustainability of the national game.