The short version
- Research indicates 94% of clubs in the top five English leagues recorded losses during the 2025-26 season.
- More than 60% of EFL and National League teams are technically insolvent, with liabilities exceeding asset values.
- The Independent Football Regulator urges urgent reform to address rising debt and dangerous reliance on owner funding.
A comprehensive assessment by the Independent Football Regulator has exposed severe financial instability across English football, describing the sector as dangerously exposed. The watchdog’s findings indicate that the vast majority of clubs are operating on the brink of economic collapse, with systemic risks threatening the integrity of the league pyramid. This evaluation marks a significant escalation in regulatory concern regarding the long-term viability of professional soccer entities outside the wealthiest echelons.
The data reveals that 94% of clubs competing in the top five tiers of English football posted losses during the 2025-26 fiscal year. The situation is particularly acute in the English Football League and the National League, where more than 60% of teams are technically insolvent. These organizations hold liabilities that exceed the book value of their assets, suggesting a fundamental imbalance between what they owe and what they own. This widespread deficit underscores a structural fragility that has persisted for decades but is now reaching critical levels.
Liquidity constraints pose an immediate threat to club operations. The regulator found that 66% of clubs could not remain solvent for more than ninety days if their owners ceased providing financial support. For 29% of these organizations, the window for survival shrinks to just thirty days without such injections. Furthermore, 68% of clubs lack any contingency plan should an owner withdraw funding or disappear. This heavy dependence on private capital leaves fans and communities vulnerable to sudden closures or administrative chaos.
The disparity between the Premier League and lower divisions has widened significantly, creating steep financial cliffs that destabilize the broader ecosystem. The average top-flight club now generates revenue more than eight times greater than the average Championship side. While the Premier League enjoys substantial economic success, this wealth does not trickle down effectively to support the structural health of the leagues below it. The existing parachute payment system, designed to cushion relegated teams, is cited as a factor that encourages overspending and drives up wage inflation in the Championship.
Transfer market dynamics have further exacerbated financial stress. Clubs are increasingly engaging in transfer financing, a practice where future income from player sales is mortgaged for immediate cash injections. This activity has surged dramatically, rising from £55 million in the 2020-21 season to £779 million by 2024-25. Approximately £1.2 billion of future transfer revenue has already been monetized through these arrangements. Additionally, net transfer debt stands at roughly £3.3 billion, with outgoing payments significantly outpacing incoming funds.
David Kogan, chair of the Independent Football Regulator, emphasized that seventeen clubs are operating in such a precarious state that they would fail even if player wages were eliminated entirely. He noted that thirty-two clubs are running on minimal cash reserves, making them highly susceptible to disruption if owner funding stops. Kogan described the current moment as a critical juncture where reforms must be implemented before financial conditions deteriorate further, aiming to stabilize the industry while there is still time to act.
The regulator has identified six key areas of concern related to financial risk and has called for urgent action. This includes demands for robust contingency planning, improved boardroom diversity, and greater transparency in how clubs engage with fan perspectives. The IFR holds the authority to impose funding settlements between the Premier League and the EFL if voluntary agreements cannot be reached. Officials have warned that they will not hesitate to use all available powers to enforce lasting change if the football authorities fail to address these systemic issues.
Stakeholders across the game, including the Premier League, the EFL, the Football Association, and the Football Supporters' Association, have welcomed the report’s findings. The consensus among these bodies is that the data provides a necessary wake-up call for the industry. While historical precedents like the expulsion of Bury in 2019 highlight the consequences of financial mismanagement, the current scale of insolvency suggests that isolated incidents are no longer sufficient to gauge the health of the system. Comprehensive reform appears inevitable as regulators push for a more sustainable model.
Sources behind this briefing
Go to the original reporting
- BBC Sport↗Majority of clubs on edge of 'financial disaster' - regulator
- BBC News↗Majority of English football clubs on the edge of financial disaster, report says
