Majority of English football clubs ‘on the edge of financial disaster’, landmark report finds

The majority of clubs in the English football pyramid are “living on the edge of financial disaster”, a landmark ‘State of the Game’ report by the new independent football regulator has found. The watchdog, which was signed into UK law last year in a watershed moment for English football governance , has warned that “urgent reform” is required to protect the financial sustainability of clubs, reporting that 94 per cent of teams in England’s top five leagues made a loss in the 2025/26 season. While the report states that there is more money and investment in English football than ever before, driven by the global success of the Premier League , “nearly all clubs” remain reliant on injections of cash from their owners – with around two thirds of clubs reporting that they would not survive more than 90 days if their owners suddenly backed away and almost one third unable to last more than a month. Bury were expelled from the English Football League in 2019 after falling into financial trouble (Getty Images) The regulator said English football has become a “game loaded with risk” and found that clubs at all levels, but particularly in the Championship, League One and League Two, are operating on “cliff edges”, driven to “overspend” in order to move up the divisions and attempt to reach the riches of the Premier League. Sheffield Wednesday, Derby County, Reading and Wigan are among the clubs who have fallen into financial distress in recent years, following the collapses of Bury and Macclesfield Town in 2019 and 2020 respectively due to rising debts. Regulator chair David Kogan and CEO Richard Monks wrote in the report’s opening remarks: “The conclusion is clear: we can’t afford to waste any more time failing to address the levels of financial risk which have become embedded in English football. “At the heart of the IFR’s remit is a commitment to protect clubs as prized social and cultural assets. When a club is taken to the brink of collapse as Sheffield Wednesday, Derby and Wigan were in recent times, it affects not just the team and their supporters but the whole community and the local economy.” “The evidence in this report is as clear, detailed and objective as possible,” they add. “It is the start of a long-term process to present the reality of the game that is so important to millions of people in England and around the world. “The IFR looks forward to achieving our statutory objective of making clubs and the whole pyramid more sustainable. By doing so the future will remain bright and football will continue its incredible success for all its stakeholders. We look forward to the discussion that will follow this report.” While the regulator’s final report will be published in early 2027, following a public consultation process, it renewed calls for the Premier League and English Football League to agree to a new financial settlement and revenue distribution model. Sheffield Wednesday entered administration and were relegated to League One last season (Getty Images) The Premier League has made a formal offer to the EFL to double its solidarity payments over a 10-year period , but confirmed last month that discussions between the two bodies remained ongoing despite a wish to reach a settlement “as soon as possible”. The regulator has additional powers to impose a settlement themselves should the Premier League and EFL fail to reach an agreement, and said: “If football can’t find a solution we will consider our next steps and will not hesitate to use all the powers at our disposal to bring about lasting change.” Meanwhile, the Football Supporters’ Association said the findings of the ‘State of the Game’ report should serve as an “alarm call” for English football. "The State of the Game report clearly highlights the unsustainable, broken model of football’s finances,” FSA chair Tom Greatrex said. "How is our national game, which generates billions in revenue every year, in such a perilous condition with so many clubs living hand-to-mouth and reliant on regular handouts from owners? "Whether you are a football finance expert or a match going supporter who pays little attention to off-field issues, it is astonishing that almost one in three clubs could not survive for more than a month if an owner stopped funding them. "This is an alarm call for English men’s professional football that must precipitate real and lasting change." The culture secretary Lisa Nandy said: “Football fans for years have lived with the anxiety of knowing their club could be one bad owner or poor month away from ruin. This report doesn’t just validate that anxiety, it has blown the doors off the game with the most stark uncovering of the state of football club finances in England today. “It underlines that the fight to establish an Independent Football Regulator was vital to safeguarding the future of English football for its fans. The findings are undeniable: there is no plan b. “These clubs belong to their fans. They are nothing without their fans. We are on their side and we will always fight for them. I urge the football authorities and those running clubs to consider these findings for the good of the game, for the fans, and for the communities of which they are so often the bedrock of.” The Premier League, meanwhile, welcomed the ‘State of the Game’ report and echoed its call to find a “football-led solution” to its ongoing discussions with the EFL. “The report recognises what English football has built – the world's most popular league, the leading second tier, and a pyramid of unmatched depth. It also identifies key challenges within the game that need to be addressed in partnership,” a statement said. “The Premier League shares the IFR’s preference that there should be a football-led solution to revenue distributions. As the report makes clear, new funding must go hand in hand with effective financial controls and wider reforms to strengthen clubs. “We believe the proposal we have made to the EFL, which was unanimously approved by Premier League clubs in July, meets the objectives the IFR has set out in its report. The League remains committed to concluding a long-term partnership with the EFL that is fair, generous and balances the interests of all clubs. “We will now study the report in detail before responding to the consultation, and will continue to work constructively with the IFR, and all stakeholders, to protect and strengthen the deepest professional pyramid in world football.”