The chair of the Independent Football Regulator says the English game must “act before it is too late” to tackle the financial dangers facing it.
The IFR published its draft ‘State of the Game’ report on Tuesday which found that while English football generated £9billion in revenue last season, 94 per cent of clubs in the top five divisions were loss-making.
Thirty-two clubs could not survive more than 30 days without owner funding, the report found, while 17 would be loss-making even if their players played for free.
IFR chair David Kogan said in the report’s foreword that English club football was simultaneously the “richest, best and most deeply competitive in the world while also standing on the edge of financial disaster”.
The report forecasts total debt in English football would rise above £5bn by the end of this season, and that net transfer debt was approximately £3.4bn, at a time when broadcast revenues are predicted to plateau or decline in the next cycle.
Kogan told the Press Association: “Everyone needs to take into account the fact that nothing is ever forever.
“We have to look at (the potential for broadcast revenues to fall) as a risk factor, and just make a judgement call, and actually also see what happens if the money does reduce.
“At the moment, the sun is shining. There’s £9bn pounds a year coming in. This is the very moment to address the issues of liquidity and losses and debt, before suddenly you see the money going backwards and it’s too late.
“And our intention is to act before it’s too late. And I believe, actually, the world of football wants that, and that’s what we’re going to do.”
The IFR’s action plan calls for reform to football’s distribution mechanisms, finding that the average Premier League club earned 8.7 times more than the average Championship club in the 2024-25 season, compared to 2.7 times in 1992-93, the first season of the Premier League.
Kogan has been in the room with the Premier League and the EFL in recent months as they continue discussions over a ‘New Deal’ on funding and cost controls between the leagues.
“I have observed them dealing with issue after issue after issue, and reaching broad consensus on those issues, and inherently believe that the deal they’re talking about now, if it comes off, might be effective in addressing some of the issues that we raise,” he said.
One sticking point has always been parachute payments to clubs relegated from the Premier League. The report finds these are “distortive” and encourage overspending by Championship clubs, but also highlighted why they are necessary, finding that the clubs relegated from the top flight in 2024-25 saw a £70million average drop in revenue.
Kogan pointed out that the deal under discussion includes merit rakes, whereby a proportion of the solidarity funding from the Premier League to the EFL will be paid based on league position.
“Clubs in the top 10 positions of the Championship are going to receive more money,” Kogan said.
“Clubs being relegated (who are) due parachute payments are going to get less money and the delta, which was ‘that’ (hands wide apart), is going to go to ‘that’ (hands closer together).
“Does that achieve everything that the EFL might have wanted three or four years ago? No. But it goes a long way towards addressing the issue. There are a lot of moving parts here and we hope they reach an agreement.”
To tackle clubs’ reliance on owner funding, clubs will be required as part of the IFR’s licensing system to commit to an action plan setting out how they will meet the ‘Appropriate Financial Resources’ requirement by 2030.
Also, IFR chief executive Richard Monks said the regulator’s team was alive as part of its licensing regime to what the report describes as “creative compliance” with existing competition rules, such as Chelsea selling hotels to companies linked to their ownership in order to meet Premier League financial rules.
“They understand what’s going on, and crucially, they’re a cynical bunch,” he said.
“However a rule is phrased, a regulator should look at that rule and think, ‘What do we think a club would do in that situation with that rule?’ They will legitimately try and push the boundaries as far as they possibly can.
“(That is) perfectly reasonable. Your job as an effective regulator is to anticipate that, and therefore both write the rules but also supervise in a way that you manage those issues.”