Independent Football Regulator’s State of the Game Report: why are football clubs loss-making?

What the latest findings reveal about English football finances and why understanding the business behind the game matters for your future in sport.

The Independent Football Regulator’s draft State of the Game report, published on 13 October 2026, has brought English football finances into sharp focus. 

It says 94% of clubs across the top five divisions of the men’s English football pyramid were loss-making before tax in 2025/26, despite the game generating around £9 billion in revenue. 

Read the regulator’s full draft report.

For anyone interested in a career in football, the findings raise a question that reaches far beyond the latest transfer window: how can clubs turn sporting ambition into a business they can sustain? Why are football clubs loss-making, and what can future football business professionals learn from the findings?

What is the Independent Football Regulator

The Independent Football Regulator, or IFR, has three central objectives: protecting clubs’ financial soundness, strengthening the resilience of English football and safeguarding its heritage. Its planned licensing regime covers financial regulation, fan engagement and club heritage. 

Find out more about the IFR’s role.

Why are football clubs losing money

Revenue is the money a club earns through its football operations- spanning matchday, broadcast and commercial. The greatest costs incurred by a football club are player wages and amortisation of player transfer fees. Clubs can also generate significant profits on player sales, especially when selling academy talent. But when costs- particularly player related costs- outweigh revenues and profits on player sales, loss-making positions are often derived.

The draft report identifies pressure from player wages, transfer costs and non-player operating costs. It also highlights financial differences between divisions and the incentives to spend in pursuit of sporting success.

Consider a club building its budget around promotion. Investing in players might improve its chances, but the wage commitments still need to be affordable if it stays in the same division. The financial plan has to work through the less successful seasons too.

That is where football finance becomes a management skill. Decision-makers need to assess the income a signing could help generate, the full cost of the commitment and the consequences if performance falls short.

Claire O’Neill, Course Leader for BA (Hons) Football Business and Finance, Manchester, said:

“The findings of the State of the Game Report will come as no surprise to those familiar with the economics of English football. Premier League clubs collectively reported record revenues of c.£6.8bn in 2024/25, driven largely by broadcasting income. Yet, with 14 clubs spending over 70% of revenues on wages, the league recorded collective pre-tax losses of c.£950m – the largest loss since the onset of COVID in 2019/20 and seventh consecutive year of losses.

The picture is even more stark in the EFL Championship, where clubs on average spend close to 100% of revenues on wages, and all but one club reported pre-tax losses in 2024/25. This persistent loss-making reflects the pursuit of utility (or ‘win’) maximisation, given our open league system in English Football. The substantial financial rewards of promotion and on-pitch success incentivise clubs to seek competitive advantage. In the Championship, this pressure is arguably intensified by the disparity in broadcasting revenues versus the Premier League and the availability of parachute payments to a select number of clubs.”

“Historically, clubs have pursued this advantage through investment in player wages and transfer fees resulting in an ‘arms race for success’ that prioritises sporting performance over profitability. Under the Premier League’s Profitability and Sustainability Rules (PSR), clubs could incur up to £105m in adjusted losses over three seasons while continuing to invest. From 2026/27, however, the introduction of Squad Cost Ratio in both the Premier League and Championship will directly regulate seasonal wage and transfer expenditure relative to relevant revenues and profit on player sales. Managing player costs and transfers will therefore become increasingly important to regulatory compliance. The presence of the Independent Football Regulator will only serve to further encourage responsible spending behaviour.”

What does the report say about owner funding

The regulator’s summary of its findings says 29% of clubs reported they could not survive for more than 30 days without new owner funding. It also identifies 17 English Football League (EFL) and National League clubs whose non-player operating costs exceeded their total revenue in 2025/26.

Owner funding is a frequent occurrence in English football, with owners often providing significant loans on an interest-free basis to support both short-term liquidity and longer-term investment in club facilities and player related costs (within the constraints of financial regulations).

Owner investment can support a club’s development. The management challenge is understanding how dependable that funding is and what the club would do if it changed. Financial sustainability in football depends on being able to keep operating through those changes.

It is also important to distinguish profit from cash. A club needs money available when wages, suppliers and other bills fall due. For a finance or operations team, forecasting those payments and testing different funding scenarios are practical parts of keeping the organisation running.

What could this mean for football governance

The IFR describes its approach as preventive and based on the risks facing individual clubs. That places emphasis on understanding problems early and preparing for them.

For club leaders, useful questions include whether the budget remains workable after relegation, how a reduction in income would be managed and who is responsible for challenging assumptions before decisions are made.

Good governance also means being able to explain those decisions. Supporters and other stakeholders need meaningful ways to understand how a club is being run and how their views are considered.

Christopher Winn, Course Leader for MSc Football Business, added:

“A perceived lack of governance across the English football pyramid was the very catalyst for the passing of the Football Governance Act 2025 and the onset of the Independent Football Regulator. Although the number of football club insolvency events has significantly diminished in the last decade compared to levels synonymous with the prior 20 years, landmark events such Project Big Picture, the European Super League, and the demise of Bury FC were more than sufficient to demonstrate need for further oversight of ownership suitability, financial planning and club governance practices.”

“One of the ways the Independent Football Regulator has looked to improve club governance is through the establishment of ‘The Football Club Corporate Governance Code’. Until now, good governance has been nothing more than best practice for almost all English clubs, with private limited companies having no legal requirement to adhere to formalised Corporate Governance expectations. The imposition of such expectations across risk oversight, board composition, EDI and stakeholder engagement on a proportionate ‘apply and explain’ basis should serve to entrench best practice – and in doing so avert many of the cases of poor club governance that have gone before.”

The findings remain part of a draft. The IFR says responses will inform its final report, which must be published before 24 May 2027. Read about the draft report consultation.

What can future football business professionals learn

For UCFB students, the report offers a live case study in how decisions across a football club connect. A commercial team’s income forecast can influence a recruitment budget. That budget can affect the cash available for operations. Leadership teams need to understand the relationships and make decisions with the whole organisation in view.

Learning to read financial information, question assumptions and communicate a recommendation can help you contribute to those discussions. These skills are relevant across finance, commercial operations and leadership roles in the game.

At UCFB, industry discussion helps bring these issues into focus. In April 2026, students took part in a workshop exploring what football clubs can learn from financial services regulation, examining how approaches from another regulated sector could apply to football.

Matthew Macdonald, Course Leader for the MSc Sports Directorship and BA (Hons) Football Business at UCFB, said:

“The report shows that financial difficulty in football clubs rarely comes from one isolated decision. It tends to develop when sporting ambition, financial commitments and leadership responsibilities are treated as unconnected. Sound judgement comes from learning to hold all three together: understanding what a sporting strategy will really cost, what happens if it doesn’t deliver, and whether the club can live with that outcome.”

“For students, that starts with working through live cases; for those already in the game, it often means stepping back from the weekly pressure of results and testing their assumptions with peers from across the industry.”

Study football business and finance at UCFB

If you want to understand the decisions behind the game, UCFB offers study options at different stages of your career.

BA (Hons) Football Business and Finance explores accounting and financial management in the context of football organisations.

MSc Football Business examines areas including finance, fan engagement, leadership, law and governance.

MSc Sports Directorship is an executive postgraduate option for professionals developing their approach to strategic leadership and sport governance.

Explore the course that matches your experience and ambitions, or book a UCFB Open Day or Open Evening to meet our teams and learn more about your future in sport.