The Independent Football Regulator’s State of the Game Report 2026 highlights the financial challenges facing English football, with rising costs, mounting debt and growing dependence on owner funding despite record revenues.
English football continues to generate record revenues, but its financial sustainability is becoming an increasingly pressing concern. According to the State of the Game Report 2026, published by the Independent Football Regulator (IFR), 94% of clubs across England’s top five divisions recorded losses in the 2025/26 season, despite combined revenues of approximately £9 billion.
The 244-page report, released in preliminary form ahead of a final assessment, found that only seven of the 116 clubs examined avoided losses. The findings highlight the difficulty of converting commercial growth into sustainable profitability, with rising player wages, operating expenses, debt servicing costs and reliance on shareholder funding putting increasing pressure on club finances.
The figures for 2025/26 include both actual results and forecasts submitted by clubs to competition organisers.
Premier League accounts for more than 80% of English football revenue
The scale of English football’s financial growth over the past three decades has been remarkable. Since the Premier League was established in 1992, average revenues among top-flight clubs have increased 33-fold, compared with approximately threefold growth in the UK economy over the same period.
The Premier League now accounts for more than 80% of the £9 billion generated by clubs across the top five divisions. The so-called Big Six contribute 56% of total Premier League revenue, underlining the concentration of financial power at the top of the game.
The gap between divisions has widened considerably. In the 1992/93 season, a Premier League club generated an average of 2.7 times the revenue of a second-tier club. By 2024/25, that multiple had risen to 8.7.
The disparity is even greater at the opposite ends of the pyramid. In 2025/26, the highest-revenue Premier League club generated 605 times the income of the lowest-revenue club in the National League.
Financial inequality is also reflected in infrastructure spending. Between 2021/22 and 2024/25, Premier League clubs invested £2.2 billion in infrastructure, compared with approximately £400 million combined across the English Football League.
Losses deepen across the divisions
Revenue growth has failed to prevent a deterioration in financial performance, as costs have frequently risen faster than income.
In the Premier League, average losses per club more than doubled over five years, increasing from £20 million in 2021/22 to £44 million in 2025/26.
The situation is even more challenging in the lower divisions, where losses account for a larger proportion of revenue.
The IFR reported the following average losses for the 2025/26 season:
- Premier League: £44 million per club, equivalent to approximately 10–20% of revenue.
- Championship: £22 million, or 59% of revenue.
- League One: £7.5 million, representing more than 65% of revenue.
- League Two: £2.7 million, equivalent to more than 40% of revenue.
The Championship stands out for the scale of its financial pressures. Average losses have almost doubled from the £11 million to £13 million range recorded in previous seasons, reaching nearly 60% of revenue.
In League One, average losses have more than tripled since 2021/22, while League Two clubs have seen losses increase more than fourfold.
The report links these trends to the competitive pressures of promotion and relegation, which encourage clubs to spend heavily in pursuit of sporting success or survival.
Player wages, transfer fees and agents drive costs higher
Squad expenditure remains one of the principal sources of financial pressure. Between 2021/22 and 2025/26, player wage bills increased by 33% in the Premier League, 32% in the Championship, 71% in League One and 63% in League Two.
In the latest season, 20 clubs allocated more than 80% of their revenue to player wages, while six recorded wage bills exceeding their total revenue.
Transfer-related expenses have also climbed. Player transfer amortisation across the top five divisions doubled in four years, rising from £1.3 billion to £2.6 billion. Agent fees increased from £317 million to £548 million, accounting for 17% of clubs’ overall transfer expenditure.
Operating costs unrelated to players have also risen sharply. Between 2021/22 and 2025/26, these expenses increased by 68% in the Premier League, 67% in the Championship, 60% in League One and 58% in League Two.
The report identifies 17 clubs across the EFL and National League whose non-player operating expenses exceeded their entire revenue. These clubs would have recorded losses even if they had not paid player wages.
English football debt set to reach £5.1 billion
Debt represents another major concern. According to the IFR, total club debt increased from £2.8 billion in 2020/21 to £4.1 billion in 2024/25. The regulator forecasts that the figure will reach £5.1 billion by 2026/27.
Approximately 75% of the debt is concentrated in the Premier League, although reliance on owner financing is considerably greater in the lower divisions.
The cost of borrowing has risen even more rapidly. Total interest payments increased from £97 million in 2020/21 to £455 million in 2024/25, a rise of 370%, compared with 45% growth in gross debt over the same period.
The implied cost of debt climbed from 3.4% to 11%, reflecting higher market interest rates and clubs’ exposure to variable-rate borrowing.
The composition of debt varies significantly across the divisions. Shareholder loans account for just 3% of total debt in the Premier League, compared with 78% in the Championship, 90% in League One, 67% in League Two and 63% in the National League.
The IFR also found that clubs had pledged £13.7 billion in assets, revenues and equity interests as collateral for financing, including £12.1 billion attributable to Premier League clubs.
Transfer market liabilities reach £3.4 billion
The report also highlights the financial risks associated with transfer dealings.
During the 2025/26 season, English clubs reported £4.8 billion in liabilities owed to other clubs for player transfers, against approximately £1.5 billion in transfer receivables. This left the system with net transfer liabilities of around £3.4 billion.
The Premier League accounted for approximately £3.1 billion of that total, while the Championship recorded £316 million.
The regulator also raised concerns about the growing use of transfer receivables factoring, through which clubs sell or borrow against future transfer payments to secure cash upfront.
Annual factoring transactions increased from £55 million in 2020/21 to £779 million in 2024/25. The total value of transfer receivables already monetised through factoring reached approximately £1.2 billion.
The market is highly concentrated, with five of the 12 principal lenders accounting for 93.6% of transactions since 2020/21. The IFR warned that the growing financial connections between clubs, owners and lenders could amplify the impact of payment difficulties and create wider risks across the football ecosystem.
Promotion and relegation create financial pressure
The economic divide between the Premier League and the Championship remains a structural challenge, driven largely by differences in broadcasting distributions.
In 2025/26, Premier League clubs received between 10 and 17 times as much in domestic competition distributions as Championship clubs that did not receive parachute payments.
Relegation continues to carry substantial financial consequences, despite these payments, which are designed to help clubs adjust to lower revenues.
For clubs relegated from the Premier League in 2024/25, the IFR estimated an average revenue decline of £70 million, equivalent to 42%. Average wage expenditure fell by just £29 million, insufficient to offset the loss of income.
As a result, EBITDA deteriorated by £32 million, while the need for external financing increased by £11 million.
The system also creates incentives for Championship clubs to spend beyond their means in pursuit of promotion. Clubs that do not receive parachute payments allocate an average of 84% of revenue to player wages, compared with 57% for those receiving the payments.
According to the regulator’s estimates, clubs outside the parachute payment system would need to reduce their wage-to-revenue ratio to 19% to break even.
£7.2 billion in transactions fails to guarantee investor returns
Despite mounting financial pressure, English football continues to attract international capital.
The IFR identified 78 club transactions over the past five years, with a combined value of £7.2 billion. This compares with just seven acquisitions between 2000 and 2005.
However, investment activity has not necessarily translated into positive returns. According to the regulator’s indicative analysis, investors in clubs across the top five divisions recorded an estimated 41% loss on their initial investment between 2021/22 and 2025/26.
Over the same period, an investment in the FTSE 100 would have generated a return of more than 36%.
Sporting performance remains a major determinant of investment outcomes. Promoted clubs recorded estimated average returns of 85%, rising to 187% for clubs that secured promotion to the Premier League from the Championship.
By contrast, clubs that remained in the same division or suffered relegation recorded average losses of 67% and 75%, respectively.
The findings underline the extent to which club valuations and investor returns depend on on-field results and access to more lucrative competitions.
Regulator calls for reform and greater financial discipline
The IFR believes English football needs to address both the distribution of revenues across the pyramid and clubs’ ability to control spending.
At the heart of the issue, IFR chair David Kogan identified a fundamental contradiction in English football: while some clubs rank among the richest and most competitive in the world, others face severe financial instability.
Kogan warned that rising revenues have been outpaced by increasing costs, contributing to mounting debt, persistent losses and excessive dependence on owner funding.
Discussions between the Premier League and the EFL over a new distribution agreement remain central to efforts to provide greater financial support to lower divisions.
However, the regulator cautioned that redistributing additional revenue without effective spending controls could fail to address the underlying problem.
The report suggests that new squad-cost rules introduced in the Premier League and Championship may not be sufficient to reverse the trend. In the Championship, the new framework could allow aggregate squad expenditure to increase by as much as £460 million, potentially loosening constraints compared with the previous system.
The challenge for the IFR is therefore to balance the continued commercial growth of English football with long-term financial sustainability, ensuring that record revenues translate into stronger balance sheets rather than ever-higher costs, debt and losses.