What a state: Three key takeaways from the Independent Football Regulator’s first State of the Game Report

The Independent Football Regulator (IFR) has released a draft of its first State of the Game Report (SOGR). Its findings paint a dire picture of English football’s finances: most clubs are technically insolvent and rely far too heavily on their owners, living “paycheck-to-paycheck”.

State of the Game Report

The IFR is mandated by the Football Governance Act 2025 to publish its SOGR once every five years. It is intended to report on “the state of English football so far as relevant to the exercise of the IFR’s functions”. The SOGR is therefore intended to focus on the financial hygiene of English football as a whole.

The IFR’s raison d’être is to “promote the financial soundness of regulated clubs”, “protect and promote the financial resilience of English football” and “safeguard the heritage of English football”. What is clear from the first SOGR is that the IFR has a mountain to climb to achieve any of these goals. The problems are pervasive, but there is no panacea.

The stats

In 2025/26, 94% of clubs were loss-making, with increasing numbers reliant on owner funding injections just to pay the bills. 66% of clubs reported that they could not survive for more than 90 days without new owner funding, and 29% said they could not survive for more than 30 days. Wages are at historic highs proportionate to revenues (20 clubs spent more than 80% of revenue on player wages), and even then the operational (non-player) costs of 17 EFL and National League clubs exceeded their revenues. The picture looks increasingly concerning the further down the pyramid one looks: 20% of Premier League clubs are technically insolvent, while that figure rises to 60% for EFL and National League clubs. The trends are heading in the wrong direction.

No wonder, then, that the IFR says English football is “standing on the edge of a financial disaster”.

What will the IFR do to fix this?

The IFR must take into account its most recent SOGR in exercising its functions. This means the lens through which it exercises its powers must be one which seeks to dig English football out of this almighty hole.

The IFR lists six things it will do to seek to fix English football’s finances. These include:

• Reform of revenue distribution. The IFR has been working with the Premier League and EFL to seek to broker a deal for the sharing of broadcast revenue, failing which it has the power to mediate under the Act. The SOGR noted that the current arrangements create incentives to overspend in the Championship, arising from both the allure of promotion to the Premier League and the distortion of competition due to parachute payments paid to clubs relegated from the Premier League.
• Reducing losses. The increase in losses has been exacerbated by rules agreed by the clubs in the Premier League and the Championship, exposing the structural and governance problems presented by competitions which are controlled by the very clubs they regulate. The IFR has said that it will use its licensing powers to address losses in clubs if necessary and may seek additional powers from Government.
• Governance improvements in the National League, whose clubs operate on a fraction of the resources that Premier League and Championship clubs have at their disposal.
• Better management of financial risk. The IFR cited the mandatory licence condition that each club must meet: to have “appropriate financial resources”. It said that clubs will be required to produce three “stress tests with mitigating action plans”, covering relegation, reduction in revenue and loss of owner funding. No longer will clubs be able to hope for the best: they must have formal contingency plans.
• Fan engagement. The IFR cited the mandatory licence condition that each club must meet: the fan engagement threshold. Clubs must consult with fans and take their views into account in their decision-making.
• Improvement of corporate governance and progress on EDI. The IFR said that corporate governance in football leaves “significant room for improvement” and noted that all clubs will need to publish a corporate governance statement every two years, explaining how they are applying the IFR’s Football Club Corporate Governance Code. The IFR said it has very limited data on EDI metrics – a problem that we highlighted to the IFR in consultations on the Governance Code – but said that its analysis “indicates that some groups with protected characteristics are underrepresented in club board and senior executive roles”. The IFR says it will establish an EDI Advisory Group “to support the IFR in increasing diversity in club boardrooms.”

Three things to keep an eye on

Those with an interest in the subject might expect development in the following areas:

1. Distribution. If the Premier League and EFL cannot reach a deal on the distribution of broadcast revenues, then the IFR will need to become more heavily involved. The trends set out in the SOGR place even more emphasis on the need for a fair deal.

2. Closer oversight. Given just how bad football’s finances are, the IFR will be keeping a close eye on clubs with a view to improving their finances. It will be interesting to see if the IFR a) takes a systematic approach, rather than addressing issues on a club-by-club basis, and b) requests further powers from Government to deal with, for example, cost caps (which would affect player salaries).

3. Governance. For too long, many clubs have adopted bad governance practices; clubs will be required to behave like the big, heritage companies that they are. How the IFR uses its powers to address poor corporate governance will be interesting to watch, as will its approach to EDI (via the EDI Advisory Group), which has (to date) been disappointingly reactive.

If you need any advice on football regulation, governance or any other issues affecting football, please get in touch with Ben Thomas and Helen Fry.

The material in this article is provided for guidance and general information only and is not intended to constitute legal or other professional advice on which you should rely. In particular, the information should not be used as a substitute for a full and proper consultation with a suitably qualified professional. Please contact the Bates Wells team if you require further information.