The Independent Football Regulator (IFR) has released a 'State of the Game' report, a forensic review of English football over the past 18 months. It concludes that the game's finances are dangerously exposed, with the majority of clubs living on the edge of financial disaster.
The IFR says that interest and investment from around the world continue to grow within English football, but the foundations of the pyramid are under intense strain and need urgent reform. Despite over £9bn in annual revenue, 94 per cent of clubs are loss-making, as excessive short-term spending to keep up with rivals puts long-term security at risk. The regulator describes a "dangerous cocktail of rising debt and an over-reliance on owner funding, leaving clubs and their fans at risk."
The report acknowledges that Premier League success has made English football the "richest, best and most deeply competitive in the world", but it points to "financial cliff-edges between and within leagues." The average Premier League club makes more than eight times the revenue of an average Championship club, and parachute payments to relegated clubs contribute to significant overspending in the Championship. Player wage inflation also pushes clubs to take big risks chasing a Premier League place.
Lower down the pyramid, 17 EFL and National League clubs incur costs exceeding revenues, and more than 60 per cent of EFL and National League clubs are technically insolvent. IFR chair David Kogan said English football presents "two completely different positions": £9bn arrives each year, yet 94 per cent of the 160 clubs the regulator oversees trade unprofitably. He added that 32 clubs hold less than 30 days' cash cover, meaning they would go bust if an owner walked away.
Source: Sky Sports Champions League · Summarized by HeadlinesBriefing