Why most football clubs in England were threatened with bankruptcy
Britain's Independent Football Regulator has reported the insolvency of more than half of England's professional clubs and predicted a financial disaster if no changes were made
Most of the professional English leagues are on the verge of financial disaster. This is according to the State of the Game report of the Independent Football Regulator (IFR).
The IFR was created in 2025 under Britain's Football Governance Act amid an attempt to create a Super League and club financial irregularities.
The IFR is also involved in financial manipulation investigations, as in the Manchester City case.
What the State of the Game report says:
️️️️️ Since 1992, football clubs have grown 10 times faster than the UK economy. But 94% of the clubs in the top five English leagues are unprofitable for the 2025/26 season.
20% of Premier League clubs, 60% of England Football League teams (2-4th divisions) and National League (5-7th divisions) are technically insolvent.
17 clubs in the English Football League and the National League will be unprofitable, even if players play for free.
66% of clubs would not be able to survive more than 90 days without funding from new owners.
29% of clubs reported that they would not be able to exist for more than 30 days without such funding.
68% of clubs do not have a plan of action in case of departure of the owner.
More than 60% of clubs in the English Football League and the National League have liabilities that exceed the book value of their assets.
.️️️️️The catastrophic rise in wages. Wage costs have risen markedly across all leagues since 2021.
The average percentage of salaries from income is:
33% - premier league
32% - championship
71% - third division
63% - fourth division
The 20 lower division clubs spent more than 80 per cent of their revenue on player salaries. In the third division, the two clubs spent 100% of their income on salaries. 94 per cent of EFL club owners surveyed favoured tighter spending controls - as one investor put it in the report, "the biggest problem is player pay.".
️️️️️ To comply with financial regulations, clubs sell women's teams, hotels and other assets. But that doesn't solve the problem.
Net transfer debt is rising, and the system of deferred transfer payments and the pledge of future transfer payments (transfer financing) increases the risks of financial collapse.
In the 2020/21 season, transfer funding amounted to £55 million. By the 2024/25 season, it had reached £779m, an increase of more than 14 times. At the moment, around £1.2bn of future transfer revenues have already been monetised through financial arrangements - almost 22 times more than in 2020-2021. In English football, transfer payments are about 3.3 times higher than transfer revenues. In the 2025/26 season, English clubs reported transfer payments of £4.8bn but transfer receipts of just £1.5bn - around £3.3bn of net transfer debt.
️️️️️ The gap between the rich clubs of the Premier League and the rest has widened.
Clubs received £9bn in revenues for the 2025/26 season. However, most of it falls on the EPL. English teams receive an average of £80m for the Champions League. Chelsea also received more than £84m for winning the Club World Cup in 2025. The absolute income gap between the top six clubs and the rest of the Premier League has widened significantly. In 1992-93, the six biggest clubs by revenue earned £9.4m more on average. By 2024-25, that average income gap had grown to £421m. The Big Six account for 56 per cent of Premier League revenues, with 44 per cent split among the remaining 14 teams. Despite years of negotiations, the Premier League and the Football League have yet to agree on a new funding arrangement that would allocate most of the funds between the top division and the rest of the pyramid clubs. The average income of a Premier League club is now more than eight times that of a championship team. Although in the 1992-93 season exceeded 2.7 times. “The existing system of payments by the Premier League to relegated clubs contributes to the fact that the championship clubs begin to spend more than they should, which leads to inflation of players’ wages.”.
️️️️️ Increased enforcement and litigation could increase club costs and reduce the attractiveness of investment in English football.
The football regulator has called on clubs to review robust action plans in case owners stop funding, change the revenue distribution system between leagues, reduce losses, and develop a development strategy for the lower divisions.
The IFR said it had the right to impose its rules and warned that "if football fails to find a solution," the regulator would consider further steps and would not hesitate to use "all the powers at its disposal to achieve lasting change.".
