The short version
- Ninety-four percent of clubs in the top five English divisions reported losses during the 2025-26 season.
- More than half of EFL and National League teams have liabilities that exceed their asset values.
- The independent regulator threatens to impose funding settlements if leagues fail to reach an agreement.
A landmark assessment by the Independent Football Regulator has exposed severe financial instability across English football, describing the current state of the sport as dangerously exposed. The watchdog’s findings indicate that the majority of clubs are operating on the precipice of financial disaster, with underlying foundations under intense strain. This evaluation serves as a stark warning that the economic model supporting the pyramid is unsustainable without immediate intervention.
The data reveals widespread insolvency among lower-tier teams. More than sixty percent of clubs in the English Football League and the National League are technically insolvent, meaning their liabilities exceed the book value of their assets. This situation has not been seen since Bury was expelled from the EFL in 2019 due to financial difficulties, marking a significant deterioration in the sector’s health over the past few years.
Loss-making operations are nearly universal across the top five tiers. Research indicates that ninety-four percent of these clubs posted losses in the 2025-26 fiscal year. The severity of these deficits is highlighted by the fact that seventeen clubs would still operate at a loss even if player wages were eliminated entirely, pointing to excessive non-playing costs as a critical drain on resources.
Liquidity remains a pressing concern for many organizations. Sixty-six percent of clubs reported they could not survive more than ninety days without fresh funding from owners, while twenty-nine percent indicated they would collapse within thirty days if such support ceased. David Kogan, the regulator’s chair, emphasized that this reliance on owner injections creates a risky scenario where clubs are vulnerable to sudden withdrawals of capital.
Governance deficiencies compound these financial risks. The report found that sixty percent of clubs lack any formal business plan, leaving them ill-equipped to manage long-term sustainability or respond to economic shocks. This absence of strategic planning exacerbates the dangers posed by rising debt levels and an over-reliance on external financing rather than organic revenue growth.
The disparity between the Premier League and lower divisions continues to widen. The average top-flight club now earns more than eight times the revenue of a typical Championship side. This gap has intensified financial pressures on lower-league teams, who often overspend in pursuit of promotion, driven by the allure of parachute payments that can distort wage structures and inflate costs across the board.
Transfer financing has emerged as a major source of short-term liquidity but also long-term risk. The practice of mortgaging future transfer fees for immediate cash has surged, with related arrangements rising from fifty-five million pounds in 2020-21 to nearly seven hundred eighty million pounds by 2024-25. Approximately one point two billion pounds of future income has already been monetized, creating complex financial links between clubs, owners, and lenders.
Net transfer debt is also climbing significantly. English clubs reported roughly four point eight billion pounds in transfer payables against only one point five billion pounds in receivables for 2025-26, resulting in a net deficit of about three point three billion pounds. This imbalance suggests that clubs are spending far more on player acquisitions than they are generating from sales, further straining their balance sheets.
The regulator has outlined six areas of concern and urged clubs to develop robust contingency plans. It has also signaled willingness to use its powers to impose a funding settlement if the Premier League and EFL fail to agree on how to share revenue more equitably. Stakeholders including the Football Association and supporters’ groups have welcomed the findings, acknowledging the need for urgent reform.
Moving forward, the focus will be on addressing these structural weaknesses before financial conditions deteriorate further. The regulator aims to stabilize the house while there is still time, emphasizing that current trends are unsustainable. Without decisive action to improve governance, reduce debt reliance, and balance revenue distribution, the risk of widespread club failures remains high.
Sources behind this briefing
Go to the original reporting
- BBC Sport↗Majority of clubs on edge of 'financial disaster' - regulator
