Majority of clubs on edge of 'financial disaster' - regulator

English football's finances are "dangerously exposed, with the majority of clubs living on the edge of financial disaster", according to a landmark report by the independent football regulator.

Research by the watchdog found 94% of clubs are loss-making, and more than 60% of EFL and National League clubs are technically insolvent.

The regulator (IFR) warns of "a dangerous cocktail of rising debt and an over-reliance on owner funding, leaving clubs and their fans at risk".

The 'State of the Game' report also suggests that despite the economic success of the Premier League, the financial 'cliff-edges' between and within leagues have grown significantly.

94% of clubs in the top five English leagues made losses in 2025-26

17 clubs across the EFL and National League would be loss-making even if their players played for free

66% of clubs could not survive for more than 90 days without new owner funding

29% of clubs reported they could not survive more than 30 days without such funding

68% of clubs have no contingency plan if their owner walks away

The IFR claims "the underlying foundations of the pyramid are under intense strain and require urgent reform", and its report "should serve as a wake-up call" for English football.

"Seventeen clubs are now trading in such a way that if their players played for free, their non-playing costs would mean they would go bust," IFR chair David Kogan told BBC Sport.

"Thirty-two clubs are operating on only 30 days' cash. If the owner chooses not to pay cash at the end of the month, those clubs go bust.

"That is a very, very risky scenario. This is the moment of addressing these problems before money starts to dry up.

"We can actually fix the house while the sun is still shining and that's essentially what our role is going to be in this."

Regulator would quit over Man City interference

Tasked with improving teams' financial sustainability, the IFR outlined six areas of concern around financial risk, and urged clubs to put robust contingency plans in place in case owner funding is withdrawn.

Despite years of talks, the Premier League and EFL are yet to agree a new funding settlement that would see the top flight share more money with the rest of the pyramid.

The IFR has the power to impose a deal and warns that "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".

It also urges action on rising losses and calls on clubs to show how they take fans' views into account, and the steps they are taking to improve boardroom diversity and governance.

The average Premier League club now earns more than eight times the average Championship side

The existing system of parachute payments paid by the Premier League to Championship clubs who have been relegated "contributes to the incentives for Championship clubs to overspend which drives up player wage inflation"

Net transfer debt is going up and deferred transfer payments and transfer financing create links between clubs, owners and lenders which increases "the potential for financial stress to spread across the game".

"Nobody in football for 100 years has believed that football was trading in a solvent and effective state," Kogan said.

"It's not how football has ever really operated.

"But I think now where there's so much more money involved, the extremes get more extreme.

"We knew the problems were there, I don't think anybody realised that the data was going to show quite how dramatic they are."

The Premier League, the EFL, the Football Association and the Football Supporters' Association have all issued statements welcoming the findings.

BBC Sport outlines some of the key points in the report.

Clubs increasingly mortgaging off future transfer cash

Over the past five years there has been a growing trend to effectively mortgage off instalments a club is due to receive in transfer payments in return for an immediate injection of cash.

Called 'transfer financing', it has become "an increasingly important source of liquidity".

In 2020-21, transfer financing stood at £55m. By 2024-25 it had reached £779m - a more than 14-fold increase.

Now about £1.2bn of future transfer income has already been monetised through financing arrangements - an almost 22-fold rise on 2020-21.

Across English football, payments for transfer outgoings are about 3.3 times transfer incomings.

In 2025-26, English clubs reported approximately £4.8bn in transfer payables but only £1.5bn in transfer receivables - a net transfer debt of about £3.3bn.