'State of the Game' report finds most English clubs living on financial brink
The Independent Football Regulator (IFR) has produced a 'State of the Game' report, which has taken a forensic look at English football over the past 18 months, concluding that the game's finances are dangerously exposed, with the majority of clubs living on the edge of financial disaster.
Key points
- The IFR's State of the Game report says 94 per cent of regulated English clubs are loss-making.
- Over 60 per cent of EFL and National League clubs are technically insolvent.
- The IFR proposes a six-point plan including licensing and revenue distribution reform.
The Independent Football Regulator (IFR) has published a 'State of the Game' report after an 18-month review of English football. It concludes that the game's finances are dangerously exposed, with most clubs on the edge of disaster despite over £9bn in annual revenue.
The report states that 94 per cent of the 160 clubs the IFR regulates are trading unprofitably. It warns of a "dangerous cocktail of rising debt and an over-reliance on owner funding" that puts clubs and fans at risk.
Financial pressures across the pyramid
The report identifies large financial gaps between and within leagues. The average Premier League club earns more than eight times the revenue of an average Championship club. Parachute payments from the Premier League to relegated Championship clubs contribute to overspending in that division.
Lower down, 17 EFL and National League clubs have costs exceeding revenues. More than 60 per cent of EFL and National League clubs are technically insolvent. Over a quarter of clubs would not survive more than a month without owner funding, and most lack a basic contingency plan.
We have 32 clubs that have got less than 30 days' cash cover in their accounts. So if the owner walks away or drops dead, they're insolvent and go bust.
— David Kogan, Chair of the IFR
Regulator's plan and next steps
The IFR has issued a six-point plan. It includes measures for clubs to hold more cash and put robust contingency plans in place, reform revenue distribution to ease cliff-edges, act on rising losses, and show how they consider fans' views and improve boardroom diversity and governance.
The Premier League and EFL have been negotiating a new distribution model for years without agreement. The IFR says it prefers a deal between them but could use a "back-stop" power to intervene. From November, the IFR will license clubs and intervene directly where needed.
