The Analysis Series: IFR State of the Game 2026 Systemic risk in English football: what the Independent Football Regulator’s first State of the Game Report finds, what it misses, and what boards should do about it

13th October 2026

Football Finance, Governance & Regulation  |  CWTE Limited

Source document	IFR State of the Game Report
Prepared by	Paul Quinn, MY (CWTE Limited)
Date	13 October 2026
Audience	Boards, investment committees, lenders and regulatory stakeholders
Scope	Full report reviewed; analysis weighted to Section 3 (club financial soundness) and Section 4 (systemic resilience).

Contents

Summary

Purpose, source and status of the report

The headline diagnosis: a system that does not finance itself

Systemic risk 1  Owner-funding dependency and liquidity

Systemic risk 2  Solvency erosion and the owner walk-away threshold

Systemic risk 3  Transfer debt, factoring and interconnectedness

Systemic risk 4  Third-party debt, financing costs and relegation covenants

Systemic risk 5  Financial cliff-edges and revenue distribution

Systemic risk 6  The investor landscape

Systemic risk 7  Broadcast revenue concentration and reset risk

Systemic risk 8  League governance, regulatory fragmentation and litigation

The IFR’s response: six-point plan and timetable

My assessment: systemic risk matrix and gaps in the IFR’s analysis

Implications and consultation points

Appendix  Key figures register with page references

Summary

KEY FINDING  Bottom line The IFR’s first State of the Game Report is the most complete financial diagnosis of the English pyramid yet produced, and its conclusion is unambiguous: English football is commercially the strongest league system in the world and financially one of the most fragile. 94% of clubs in the top five divisions made a pre-tax loss in 2025/26, 66% say they could not survive 90 days without new owner money, and more than 60% of EFL and National League clubs are balance-sheet insolvent on a book basis. The systemic picture is one of structurally impaired solvency, financed by a narrow, discretionary and just-in-time liquidity source, owners, supplemented by a rapidly growing and highly concentrated transfer-finance market. That is a fragile combination by any macroprudential standard.

 

Metric	Figure	Ref.
Clubs (top five tiers) loss-making before tax, 2025/26	94%	p.22
Clubs unable to survive >90 days / >30 days without owner funding	66% / 29%	p.96
EFL & NL clubs with negative equity (book) / after squad market value (EFL)	63% / 46%	pp.102–104
EFL & NL clubs whose football net debt exceeds estimated enterprise value	27%	p.105
Gross transfer payables / net transfer debt, 2025/26	£4.8bn / £3.4bn	p.180
Transfer factoring executed, 2020/21 → 2024/25	£55m → £779m (14x)	p.181
Share of transfer financing from top five lenders / single largest lender	93.6% / 43%	p.183
Interest-bearing debt cost: interest bill and implied rate, 2020/21 → 2024/25	£97m → £455m; 3.4% → 11.0%	p.82

Source: IFR, State of the Game Report (draft for consultation, October 2026). Page references are to the source document.

Systemic risk ranking (My assessment)

#	Risk	Severity	Trajectory	IFR mitigation
1	Owner-funding withdrawal / liquidity rollover	Critical	Worsening	Partial and late (plans 2027/28; stress tests May 2028)
2	Championship overspend, amplified by SCR loosening	High	Worsening	Dependent on PL–EFL deal or Part 6 backstop
3	Transfer debt and factoring network (contagion)	High	Rapidly worsening	Monitoring only
4	Solvency erosion in League One and League Two	High	Worsening	Long-dated (AFR by May 2030)
5	Broadcast revenue reset from 2028	Medium-High	Uncertain	Monitoring only
6	Debt cost, floating-rate exposure and relegation covenants	Medium-High	Elevated	Possible borrowing limits, undefined
7	Investor appetite reversal	Medium	Latent	Owner suitability tests
8	League governance, litigation and fixture congestion	Medium	Worsening	Club Code; engagement

Severity and trajectory are my judgement drawing on the IFR evidence; they are not IFR ratings.

MY ASSESSMENT: Five conclusions The trigger is liquidity; the cause is solvency. The IFR’s own econometrics show liquidity is the best short-run predictor of distress, but 97% of EFL/NL clubs have negative EBITDA. No liquidity fix survives a business model that consumes cash structurally. Owner funding is the system’s lender of last resort, and it is discretionary. 28 clubs received 12 or more owner injections in a year; 76 have no contingency plan. Where debt exceeds enterprise value (27% of EFL/NL clubs) a financially motivated owner has little economic reason to keep funding. Transfer finance is the most bank-like risk in the system and the least supervised. £1.2bn of future receipts are already monetised; the Championship has factored more than it still has on its balance sheet; one lender accounts for 43% of activity. Rules are moving in the wrong direction at the riskiest point of the pyramid. The Championship’s new Squad Cost Ratio rules could release up to £460m of additional squad spending, pro-cyclical loosening as broadcast uncertainty rises. The IFR’s response is supervisory, not prudential. Action plans, stress tests and an annual risk assessment are welcome but no hard liquidity floor, no transfer-finance exposure limits and no counterparty mapping are proposed before 2028–2030.

Purpose, source and status of the report

The Football Governance Act 2025 requires the IFR to publish a State of the Game Report at least every five years. This is the first. It is explicitly a draft for consultation, with comments due by 9 December 2026 (p.6). The IFR describes it as “the most comprehensive financial analysis of the English football industry ever undertaken” and its Chair and Chief Executive frame it as evidence that the game is “standing on the edge of financial disaster” (pp.1–3).

Evidence base

• Club, ownership, transaction and league financial data obtained under statutory information-gathering powers. Detailed Premier League and EFL data cover 2021/22 to 2025/26; National League detail covers 2025/26 only (p.6).
• 2025/26 data are a mix of actuals and forecasts submitted by clubs (forecasts as at March 2026). The record summer 2026 transfer window is not analysed (pp.20, 180).
• Financial information requests to 112 clubs; 39 owner and investor interviews conducted by BCG; debt and transfer analysis by EY Parthenon; fan research by Ipsos; academic review by Oxera (pp.12, 24, 160).

Structure and systemic risk framing

The report has five sections: the evolution of the game since 1992; the current financial state; club-level financial soundness (liquidity, solvency, distress); systemic resilience; and non-financial issues. Section 4 adopts the statutory definition of systemic risk from the Act’s explanatory notes, risks that “might not threaten any one club significantly but… their potential aggregated, correlated, and/or multiplied effects may pose a significant risk to the pyramid as a whole” (p.131), and identifies four sources: financial cliff-edges and distribution; the investor landscape; the future broadcast landscape; and transfer debt and financing.

This briefing treats systemic risk more broadly. Owner-funding dependency, solvency erosion, debt pricing and league governance are analysed by the IFR in other sections, but they are system-wide in character and are assessed here alongside the four Section 4 risks.

The headline diagnosis: a system that does not finance itself

English football generated around £9bn of revenue in 2025/26, with the Premier League accounting for more than 80% and the big six for 56% of Premier League club revenue (p.19). Revenue growth has been extraordinary,  Premier League club revenues are more than 30 times their 1992 level against a threefold rise in UK GDP (p.15), but costs have grown faster and losses have widened at every level.

Profitability, cash generation and external financing by division, 2025/26

Division	Avg loss before tax	Loss % revenue	Operating cash flow per £1 revenue	External financing per £1 revenue	Adjusted quick ratio*
Premier League	£44m	10–20%	+4p	33p	0.57
Championship	£22m	~59%	–57p	57p	0.41
League One	£7.5m	67%	–41p	72p	0.94
League Two	£2.7m	>40%	–32p	26p	0.46
National League	£1.5m	57%	–30p	55p	0.58

Source: IFR, State of the Game Report (draft for consultation, October 2026), pp.22, 75–76, 90. *Liquid assets per £1 of short-term liabilities, excluding squad market value.

Cost pressure

• Player wage costs rose between 2021/22 and 2025/26 by 33% (PL), 32% (Championship), 71% (League One) and 63% (League Two) (p.20).
• Amortisation across the pyramid doubled from £1.3bn to £2.6bn; agent fees rose from £317m to £584m, equal to 17% of total transfer costs (p.20).
• 20 clubs spent more than 80% of revenue on player wages; six spent more than 100% (p.20).
• Non-player operating costs rose 58–68% across the four EFL/PL divisions; 17 EFL and National League clubs had non-player costs exceeding total revenue,  they would lose money if their players were unpaid (p.21).
• Average external financing more than doubled in the Premier League and Championship and more than tripled in League One and League Two between 2021/22 and 2025/26; at least 30 clubs received external financing exceeding 50% of revenue (pp.22, 76).

MY ASSESSMENT The IFR’s own phrase is the right one: “at a system-wide level, football is not self-sufficient and is systemically vulnerable if economic circumstances worsen or investor appetite slows” (p.85).  Outside the Premier League, losses are not cyclical; they are the operating model. Every systemic risk in this briefing is a variation on one question,  what happens when the external money stops or slows?

 

Systemic risk 1: Owner-funding dependency and liquidity

KEY FINDING 83% of EFL and National League clubs have negative operating cash flow; most clubs do not hold enough liquid assets to meet short-term liabilities outside a transfer window; and most Championship, League One and League Two clubs hold less than 30 days of cash (pp.89–97).

 

Survival horizon without new owner funding

The IFR asked clubs how long they could operate if owner injections stopped after the March 2026 payroll. 66% said no more than 90 days; 29% said no more than 30 days (p.96). The IFR’s independent “cash operating days” measure, built from financial statements, is weaker still, indicating “some clubs may have fewer days of liquidity than they expect” (p.97).

Just-in-time owner funding

Indicator (March 2025 – March 2026)	Clubs
Received six or more owner funding injections	67
Received twelve or more owner funding injections	28
Report no funding contingency plan if owner support is withdrawn	76
Do not forecast a downside scenario	71

Source: IFR, State of the Game Report (draft for consultation, October 2026), pp.98–99.

Shareholder loans make up 78% of Championship, 90% of League One, 67% of League Two and 63% of National League interest-bearing debt (p.79). Below the Premier League, owner money is not a supplement to market finance, it is the market.

Liquidity trend

Between 2021/22 and 2025/26 the adjusted quick ratio (excluding squad value) fell 44% in League Two, 23% in the Premier League and 22% in the Championship, and rose 10% in League One (p.95). Including 40% of squad market value, the Premier League’s convention lifts median ratios above 1.5, but only during transfer windows, and the IFR does not treat players as liquid assets for licensing purposes (pp.90, 93).

Liquidity is the best predictor of distress

The IFR’s econometric work on seven distress events (2021/22–2025/26) finds that lower adjusted quick ratios and weaker operating cash flow are the strongest predictors of distress, while absolute levels of solvency, profitability and external financing are not statistically useful differentiators; rising net debt-to-revenue and falling financing inflows are (p.127). Distressed clubs’ quick ratio fell from c.0.7 two years before distress to c.0.25 in the distress year, against a stable c.1.1 for other clubs; their cash days fell from c.180 to c.30 the year before distress (p.122).

MY ASSESSMENT  Rollover risk by another name Clubs funded by monthly owner injections are exposed in the same way as banks funded by short-term wholesale markets: solvency only matters when the rollover stops, and then it matters immediately. The difference is that an owner’s decision is idiosyncratic and unobservable until it happens, Wigan entered administration within a month of a change of ownership when £6m of promised funding did not arrive (p.119). The IFR’s finding that liquidity predicts distress is the trigger, not the cause. 97% of EFL/NL clubs have negative EBITDA (p.107). Any liquidity requirement that is not paired with cost control will be consumed. Equally, the investor objection to liquidity buffers (“if your cash is on the sidelines, it’s on the sidelines”, p.169) does not answer the IFR’s own evidence. A minimum, verifiable funding commitment, committed owner facilities or escrowed cover for a defined number of operating days, is the proportionate middle course.

 

REGULATORY ACTION: What the IFR proposes All clubs to agree an action plan to meet the statutory ‘Appropriate Financial Resources’ requirement by May 2030; plans agreed before the start of 2027/28 (p.37). All clubs to produce three stress tests,  relegation, revenue reduction and loss of owner funding,  with mitigating action plans, by May 2028 (p.37). Continued review of owner suitability including sufficiency of owner financial resources (p.37).

 

Systemic risk 2: Solvency erosion and the owner walk-away threshold

KEY FINDING 63% of EFL and National League clubs and 20% of Premier League clubs have liabilities exceeding the book value of their assets. After adding squad market value, 46% of EFL clubs remain in negative equity (no Premier League club does). 27% of EFL and National League clubs have football net debt exceeding their estimated enterprise value (pp.102–105).

 

Football net debt to estimated enterprise value

Division	2021/22	2025/26	Direction
Premier League	28.9%	31.4%	Broadly stable
Championship	117.7%	93.9%	Improving (shift to equity)
League One	20.8%	83.1%	Sharp deterioration
League Two	32.0%	85.2%	Sharp deterioration

Source: IFR, State of the Game Report (draft for consultation, October 2026), p.106. Football net debt = gross debt less cash plus net transfer debt; EV at 2x revenue (6x for the big six).

Debt serviceability

Division	Avg EBITDA 2021/22	Avg EBITDA 2025/26
Premier League	+£27.6m	+£46.6m
Championship	–£13.2m	–£17.8m
League One	–£2.4m	–£6.5m
League Two	–£0.6m	–£2.6m

Source: IFR, State of the Game Report (draft for consultation, October 2026), p.108.

With 97% of EFL and National League clubs generating negative EBITDA, interest cover and debt/EBITDA are not meaningful: debt can only be repaid from further owner funding, borrowing or player sales (p.107). Endnotes record that League One debt rose from 0.57x to 1.04x revenue and League Two from 0.29x to 0.63x between 2021/22 and 2024/25 (endnote 172).

MY ASSESSMENT:  The walk-away threshold Once a club’s net debt exceeds its saleable value, its equity is out of the money. A financially motivated owner then has an option, not an obligation: continue to fund losses in the hope of promotion, or stop. The IFR recognises this (“shareholders may have less economic incentive to provide further financing”, p.105) but does not draw the systemic implication: the clubs most dependent on owner money are precisely those where owners have the weakest economic reason to keep supplying it. With League One and League Two leverage rising roughly fourfold and nearly threefold in four years, that cohort is growing. The Premier League’s new SSR Positive Equity Test (liabilities no more than 90% of adjusted assets in 2026/27, tightening to 80% from 2028/29, p.103) is the only solvency floor in the system, and it applies where solvency is least impaired.

 

Systemic risk 3: Transfer debt, factoring and interconnectedness

KEY FINDING English clubs reported £4.8bn of transfer payables against £1.5bn of receivables, net transfer debt of c.£3.4bn, in 2025/26. Payables are 3.3 times receivables. Annual transfer factoring rose fourteen-fold from £55m to £779m between 2020/21 and 2024/25, and c.£1.2bn of future receipts have already been monetised (pp.179–184).

 

Transfer positions by division, 2025/26

Division	Payables	Receivables	Net transfer debt	Receivables factored	Share of total receivable stream already monetised*
Premier League	£4,354m	£1,248m	£3,106m	£975m	44%
Championship	£468m	£152m	£316m	£238m	61%
League One	£19m	£49m	(£30m)	£9.7m	17%
League Two	£2.8m	£6.6m	(£3.8m)	£0m	0%
National League	£0.1m	£0.6m	(£0.5m)	£0m	0%
Total	£4,844m	£1,456m	£3,388m	£1,223m	46%

Source: IFR, State of the Game Report (draft for consultation, October 2026), Charts 4.5.1 and 4.5.3 (pp.180, 182). Net transfer debt and the final column are my calculations from the chart values. *Factored ÷ (factored + remaining receivables). Brackets denote a net surplus.

Growth in transfer financing executed in-year

Season	2020/21	2021/22	2022/23	2023/24	2024/25
Transfer financing executed	£55m	£78m	£169m	£333m	£779m

Source: IFR, State of the Game Report (draft for consultation, October 2026), Chart 4.5.2 (p.181).

The three transmission channels the IFR identifies

• Future cash-flow pressure. Net transfer debt averages c.£155m per Premier League club and c.£13m per Championship club, to be funded from operating cash flow, player sales, borrowing or owners (p.183). Factoring brings receipts forward and leaves less to offset future payables.

• Lender concentration. Only 12 lenders have provided transfer financing since 2020/21; five account for 93.6% and one for 43% (p.183). A change in risk appetite or exposure limits at a single provider would create immediate liquidity pressure at the clubs that depend on it.

• Contagion. Instalment structures link buying and selling clubs; factoring adds a non-football counterparty and, under recourse arrangements, routes a buyer’s default back to the seller (pp.183–184; endnote 417). The football creditor rule limits loss transfer in insolvency but “does not remove transfer debt, eliminate exposures to transfer financing providers or prevent financial stress from being transmitted through financing arrangements” (p.184).

RISK FLAG: The Championship has spent its future Championship clubs have factored £238m of receivables against £152m still on balance sheets: 61% of the division’s total transfer-receivable stream has already been converted to cash (p.182). In the division where the IFR also finds the strongest incentive to overspend, the principal shock absorber, future player-sale proceeds, has largely been drawn down in advance.

 

MY ASSESSMENT  The most bank-like risk, and the least supervised Transfer receivables and payables form a bilateral credit network with maturity transformation, a small number of specialist lenders and recourse back to originators. That is a recognisable financial-stability structure, and it is growing fastest. Yet the IFR proposes monitoring only. Four gaps stand out: No counterparty map. The report quantifies aggregates but not who owes whom. Endnote 416 confirms receivables may be owed by clubs outside the English system,  cross-border exposures sit outside both the IFR’s remit and the football creditor rule. No recourse split. Without knowing what share of the £1.2bn is with recourse, the true contingent liability of selling clubs is unknown. No maturity profile. £4.8bn of payables is a stock; boards and regulators need the 12, 24 and 36-month settlement wall. Unclear priority of assigned receivables. Whether a lender that has purchased a transfer receivable inherits football-creditor priority is a material legal question the report does not address. The evidence strengthens the case for centralised transfer settlement and netting, which would cut gross settlement flows, give the regulator a real-time exposure map and make lender concentration visible.

Systemic risk 4: Third-party debt, financing costs and relegation covenants

Debt stock and pricing

Measure	2020/21	2024/25	Change
Gross interest-bearing debt	£2.8bn	£4.1bn	+46%
Aggregate interest cost	£97m	£455m	+370%
Implied cost of debt	3.4%	11.0%	+7.6 pts

Source: IFR, State of the Game Report (draft for consultation, October 2026), pp.23, 78, 82. Gross debt forecast to reach £5.1bn by 2026/27; Premier League c.75% of total. Excludes non-interest-bearing shareholder loans.

• 79% of Premier League clubs have at least one floating-rate facility (p.82). Mean interest margins: 2.8% in the Premier League, 6.7% in the Championship.
• Premier League clubs hold more than £3bn of bank debt and almost £1.5bn from debt capital markets (p.80). Private credit is a growing, higher-priced source with “less collaboration/relationship focus in distress/default scenarios” (p.81).
• Clubs have pledged c.£13.7bn of assets, revenues and equity as security, £12.1bn in the Premier League, £1.3bn in the Championship (p.84). Fixed assets are the most common security, followed by shares and revenues.

Relegation-linked covenants

Feature (Premier League)	Prevalence
Clubs with at least one facility containing a relegation covenant	60% of clubs
Facilities with full or partial repayment on relegation	c.35% of facilities
Facilities secured on broadcast, sponsorship or commercial receivables	21% of facilities
Facilities with margin step-ups on relegation	15% of facilities
Clubs borrowing against parachute payments (repayment or security)	3 clubs

Source: IFR, State of the Game Report (draft for consultation, October 2026), p.83.

MY ASSESSMENT Pricing has repriced faster than leverage. Interest costs rose eight times faster than the debt stock. An implied 11.0% cost against a 2.8% Premier League mean margin indicates a material high-cost tail (private credit, fees, Championship lending) that the report does not decompose. That is where refinancing risk sits. Relegation covenants are pro-cyclical by design. They accelerate repayment and raise margins at exactly the moment revenue falls by c.42% (Section 7). The IFR identifies this but proposes no response beyond a possible future limit on borrowing. Pledged security is c.3.3 times interest-bearing debt (comparing 2025/26 security with 2024/25 debt). In stress, control of stadia, training grounds and shares,  the heritage assets the Act exists to protect,  passes to lenders. The heritage and financial-resilience objectives intersect here and the report does not connect them. The debt figures understate indebtedness. Non-interest-bearing shareholder loans are excluded, although the IFR itself notes they may become third-party debt on a sale or insolvency (p.101). The footnoted fall in aggregate debt-to-revenue (0.55x to 0.50x, endnote 171) should not be read as de-leveraging.

 

Systemic risk 5: Financial cliff-edges and revenue distribution

Domestic competition distributions per club, 2025/26

Club category	Distribution per club	Multiple of tier below
Premier League club	£117m–£198m	2–3x Y1 parachute; 10–17x non-parachute
Championship  year-one parachute	£55m	5x non-parachute Championship
Championship  non-parachute	£12m	5x League One
League One	£2.4m	1.4x League Two
League Two	£1.7m	8x National League

Source: IFR, State of the Game Report (draft for consultation, October 2026), p.137. Parachute payments totalled £226m (5.7% of PL revenue) and EFL solidarity £141m in 2025/26 (pp.136–137).

The relegation shock

Relegated in 2024/25	Revenue	Player wages	EBITDA / financing
Premier League → Championship	–£70m (–42%)	–£29m (–34%)	EBITDA –£32m; external financing +£11m
Championship → League One	–£10m (–37%)	–£10m (–47%)	EBITDA broadly stable
League One → League Two	–£0.3m (–4%)	–£0.5m (–12%)	External financing –£1.3m

Source: IFR, State of the Game Report (draft for consultation, October 2026), pp.140–141.

The Championship overspend trap

• Non-parachute Championship clubs spend 84% of revenue on player wages against an EBITDA break-even ratio of 19%; all spent at least 59% and ten spent more than 80% (p.143).
• Promotion lifted non-parachute clubs’ revenue by £139m (+376%); the gap between parachute and non-parachute clubs has widened from £14m (2012/13) to £43m (2025/26) (pp.143, 145).
• New Championship SCR rules could increase total squad costs by £460m, from £1.02bn to £1.48bn, if headroom is fully used, non-parachute clubs from 86% to 125% squad cost ratio, parachute clubs from 67% to 97% (p.144).
• Only 47% of promoted clubs survive their first Premier League season (vs c.80% in the Championship, League One and National League); the three-season rolling survival rate fell from c.65% (2017/18) to c.20% (2025/26) (pp.150–152).

RISK FLAG: Pro-cyclical loosening The IFR states that the new Championship rules “will significantly loosen the financial constraints” (p.144). Combined with factored receivables, negative EBITDA and covenant-driven relegation stress, the Championship is the pyramid’s principal accumulation point for systemic risk. Any increase in solidarity money without a binding cost constraint will, as 12 of 14 EFL owners themselves warn, flow into wages (p.169).

 

REGULATORY ACTION  Distribution reform and the Part 6 backstop Premier League clubs have approved a proposal,  still under discussion with the EFL,  to more than double solidarity payments, introduce merit rakes, ring-fence an infrastructure fund, tighten Championship financial controls, create a lifeboat fund and phase down parachute payments (Box 4.2.1, p.138). The IFR prefers a football-led agreement; failing that, a competition organiser may trigger the Part 6 backstop, leading to mediation and, if needed, an IFR distribution order that would consider cost controls, merit rakes, lifeboat funds and the quantum distributed (p.35).

 

Systemic risk 6: The investor landscape

Ownership activity has accelerated: 78 transactions worth £7.2bn in the five years to 2024/25 against 30 worth £2.4bn in the previous five; around half of all clubs and 65% of Premier League clubs changed ownership (pp.50, 161). Ownership is increasingly overseas (75% of Premier League revenue controlled by non-domestic owners; 46% of pyramid revenue by North American owners), institutional (3% of revenues in 2016, 11% in 2025) and multi-club (85% of Premier League clubs are part of a multi-club or multi-sport structure) (p.50).

Indicative investor returns, 2021/22 to 2025/26

Cohort	Indicative EV return
All clubs (76 with complete data)	–41%
FTSE 100 benchmark, same period	>+36%
Clubs promoted (any division)	+85%
Championship → Premier League and stayed up	+187%
Premier League clubs that stayed in the Premier League	+13%
Clubs that stayed in the same league (all divisions)	–67%
Clubs relegated (all divisions) / relegated from the Premier League	–75% / –101%

Source: IFR, State of the Game Report (draft for consultation, October 2026), pp.171–173. EV = 2x revenue (6x big six) less accumulated losses as proxy for owner funding. Only 21 of 76 clubs generated a positive return.

What owners told the IFR

Proposition	Support
More robust cost controls (EFL owners)	17 of 18
Redistribution should fund infrastructure, not wages (EFL owners)	12 of 14
Opposed to redistribution (Premier League owners)	6 of 9
Restrictions on third-party debt beneficial (EFL owners)	13 of 22
Opposed to liquidity requirements (all investors)	17 of 21
Robust owner and director tests important	32 of 32

Source: IFR, State of the Game Report (draft for consultation, October 2026), p.169. Based on BCG interviews with 39 owners and investors.

MY ASSESSMENT The returns analysis is crude, fixed revenue multiples and accumulated losses as a proxy for owner funding, but its message is robust: outside promotion, owning an English club has destroyed value. The pool of capital funding the pyramid is therefore motivated by non-financial returns or by a lottery-ticket bet on promotion (“buy the lottery ticket”, “a VC bet”, pp.166–167). Both are pro-cyclical and correlated: a tightening in US or global capital conditions would hit the dominant owner cohort simultaneously. The systemic section does not examine multi-club ownership, related-party flows, intra-group transfers and cross-jurisdictional exposures, despite 85% of Premier League clubs sitting in such structures. Nor does it quantify concentration of owner funding (how much of the pyramid’s external financing comes from the largest owners). Both are gaps.

 

RISK FLA:  Illicit finance (Box 4.3.1) Citing the 2025 National Risk Assessment, the IFR notes football’s exposure to money laundering via offshore structures, shell companies, transfers and sponsorship, and that distressed clubs are most vulnerable. It also records the FCA’s warning to clubs that funds from unauthorised crypto firms may constitute criminal property under POCA (p.164).

 

Systemic risk 7: Broadcast revenue concentration and reset risk

Broadcast income is 51% of Premier League club revenue, 45% in the Championship and 32% in Leagues One and Two (p.19). Current deals are secured until 2027/28 (Premier League international), 2028/29 (Premier League domestic and EFL) and 2030/31 (National League) (p.175). The IFR identifies a maturing domestic market, profit-focused and consolidating broadcasters, uncertain streaming demand, piracy (20% of fans watch illegally at least monthly) and concentration,  more than 70% of Premier League media revenue comes from five media companies (p.176).

Stress test: additional average loss from a fall in broadcast revenue (costs held constant)

Category	2025/26 avg loss	–15%	–25%	–50%
PL big six	£62m (9%)	+£41m	+£68m	+£135m
PL other	£37m (16%)	+£24m	+£39m	+£79m
Championship  parachute	£31m (33%)	+£8.2m	+£14m	+£27m
Championship  other	£20m (64%)	+£1.8m	+£3.0m	+£5.9m
League One	£7.5m (67%)	+£0.7m	+£1.1m	+£2.2m
League Two	£2.7m (43%)	+£0.3m	+£0.4m	+£0.9m
National League	£1.5m (57%)	+£0.1m	+£0.1m	+£0.2m

Source: IFR, State of the Game Report (draft for consultation, October 2026), Table 4.4.1 (p.177). Percentages in brackets are loss as % of revenue.

RISK FLAG: The precedent When ITV Digital collapsed in March 2002 it owed the EFL £178.5m of a £315m three-year deal; Sky’s replacement was worth £95m over four years. The shock contributed to 16 insolvency events in 2002 and 2003 (p.111). The IFR names two systemic channels: an in-deal default by a broadcaster and a lower value at the next tender (p.177).

 

MY ASSESSMENT The 2028/29 rights cycle lands in the same window as the IFR’s stress tests (May 2028) and the Appropriate Financial Resources deadline (May 2030). Clubs will be asked to rebuild balance sheets just as the revenue line that underwrites them is repriced. The stress table holds costs constant and runs one division at a time; a correlated scenario, lower rights, weaker investor appetite, falling player values and higher debt costs, which the IFR itself describes as a possible “negative spiral” (p.40),  is the scenario that matters, and it is not modelled in the main report.

 

Systemic risk 8: League governance, regulatory fragmentation and litigation

The IFR explicitly frames league governance as a source of systemic risk (p.199). Competition organisers now act as both commercial bodies and regulators, with rule-making by club vote and diverging interests between the big six and the rest.

• Premier League administrative expenses rose from £45m (2015/16) to £212m (2024/25), +369%, partly reflecting exceptional disciplinary cases; EFL costs rose from £22m to £35m. National League central costs are only £15,000 per club against £483,000 in the EFL and £10.6m in the Premier League (pp.195–196).
• Rule-making has been repeatedly blocked or challenged: the PFA’s successful 2020 challenge to League One and Two salary caps; the failed Top-to-Bottom Anchor in 2025; League Two’s 2026 rejection of tighter SCMP rules; and the PFA’s High Court challenge to League One’s new rules (p.193).
• Creative compliance: stadium sales within corporate groups (Derby, Sheffield Wednesday, Birmingham); Chelsea’s £76.5m hotel sale and £198.7m women’s team sale to BlueCo; Aston Villa’s women’s team sale to V Sports (p.194).
• Litigation is rising, including Manchester City’s APT challenges and the £35m Burnley compensation award against Everton, which is under appeal (p.195).
• Fixture congestion: further expansion of UEFA and FIFA club competitions into domestic slots could reduce the value of domestic media rights (p.198).

MY ASSESSMENT Fragmented, contested and litigated rule-making is not merely an administrative cost; it is why the cost base has not been controlled. The IFR’s finding that league financial rules have had “limited impact in reducing losses” (p.33) and its Section 3 conclusion that “existing competition organiser rules alone have not been sufficient” (p.128) are the strongest arguments in the report for the IFR to set minimum prudential standards itself rather than rely on league rule-books.

The IFR’s response: six-point plan and timetable

#	Action	Key mechanism
1	Reform revenue distribution, focused on stability not spending	Football-led deal preferred; Part 6 backstop if not
2	Leagues, clubs and stakeholders to agree plans to reduce losses	Licensing conditions if needed; may seek further powers from Government
3	Strengthen National League governance	Work with stakeholders on oversight
4	Clubs must improve financial risk management	AFR action plans; three mandatory stress tests
5	Clubs must show they take fans’ views into account	Fan Engagement Threshold Requirement; annual fan consultation report
6	Improve corporate governance and board diversity	Club Code statements; EDI Advisory Group

Source: IFR, State of the Game Report (draft for consultation, October 2026), pp.34–38.

Timetable

Date	Milestone
9 December 2026	Consultation on the draft report closes
Before start of 2027/28	IFR to agree Appropriate Financial Resources action plans with every club
October 2027	First biennial corporate governance statements due
Spring 2028	First IFR annual systemic risk assessment
May 2028	Three stress tests with mitigating action plans due from all clubs
2028	First IFR review of corporate governance statements
May 2030	Clubs must meet Appropriate Financial Resources and Fan Engagement thresholds; full licences
By 2032	Latest date for the next State of the Game Report

Source: IFR, State of the Game Report (draft for consultation, October 2026), pp.35–39.

Systemic issues the IFR commits to monitor

• Domestic and international competition for fixture slots and the impact on broadcast values.
• Competitiveness undermined by widening revenue disparity within and between leagues.
• Effectiveness of league governance, rising central costs and litigation.
• A lower-growth, lower-investment outlook, “a negative spiral of decreasing player values, increasing debt-servicing costs, reduced investment and a reversing of the virtuous circle” (p.40).

My assessment: systemic risk matrix and gaps in the IFR’s analysis

Systemic risk matrix

Risk	Transmission channel	Severity	IFR mitigation	Adequacy
Owner-funding withdrawal	Idiosyncratic stop in just-in-time funding → missed payroll/HMRC → distress; correlated if capital conditions tighten	Critical	AFR plans 2027/28; stress tests 2028; owner tests	Partial — no liquidity floor
Championship overspend	Parachute gap + promotion prize + SCR headroom → wage inflation → losses funded by owners/factoring	High	Distribution reform; backstop	Contingent on deal and cost controls
Transfer debt network	Payment default or lender retreat → liquidity gap at seller → onward default; recourse to originator	High	Monitoring	Inadequate
L1/L2 solvency erosion	Debt growing faster than value → equity out of the money → owner exit	High	AFR by 2030	Too slow
Broadcast reset	Lower rights or in-deal default → system-wide revenue shock	Medium-High	Monitoring; stress tests	Partial,  no correlated scenario
Debt cost and covenants	Floating rates, high-cost tail, relegation acceleration	Medium-High	Possible borrowing limits	Undefined
Investor appetite	Negative returns → shrinking capital pool → less owner funding	Medium	Owner tests	Indirect
League governance	Blocked rules, litigation, creative compliance → uncontrolled costs	Medium	Club Code; engagement	Indirect

MY assessment.

Where the report is strong

• A genuine system-wide dataset gathered under statutory powers,  the first time liquidity, solvency, debt and transfer exposures have been measured consistently across five divisions.
• Football-specific metrics (adjusted quick ratio, cash operating days, football net debt to EV) rather than generic accounting ratios.
• Empirical identification of liquidity as the leading indicator of distress, consistent with the academic literature (Evans 2024; Alaminos and Fernandez 2019).
• A candid statement that league rules have not worked and that the Championship SCR will loosen constraints.

Where the systemic analysis falls short

• No integrated stress scenario. Each risk is assessed separately. The “negative spiral” the IFR describes on p.40 is never quantified in the main report.

• No network or counterparty analysis of transfer obligations, including cross-border exposures, recourse terms and maturity profile.

• Lender concentration identified but not named or limited. A single provider at 43% of transfer financing is a single point of failure.

• Multi-club ownership absent from the systemic section despite covering 85% of Premier League clubs.

• Interest-rate and refinancing risk under-developed. A more than threefold rise in the implied cost of debt and widespread floating-rate exposure warrant a maturity and repricing analysis.

• Debt measure excludes non-interest-bearing shareholder loans, understating claims that crystallise on sale or insolvency.

• The response is back-loaded. The first hard outputs (stress tests) arrive in May 2028, after the 2026/27 Championship SCR loosening and the record summer 2026 transfer window, and close to the next broadcast cycle.

MY ASSESSMENT: Overall judgement The diagnosis is right and well evidenced. The prescription is proportionate in tone but too slow and too reliant on clubs’ own plans for a system where the IFR’s data show most lower-league clubs are weeks, not months, from a liquidity event. The report makes the case for macroprudential tools, liquidity floors, counterparty exposure limits, a central transfer-settlement mechanism and a correlated system-wide stress test, without proposing them.

 

Implications for boards and consultation points

For club boards

• Treat the May 2028 stress tests as a 2026/27 task: model relegation, a 25–50% broadcast fall and full loss of owner funding now, using the IFR’s own metrics (adjusted quick ratio, cash operating days, football net debt to EV).
• Document a funding contingency plan; 76 clubs currently have none and owner suitability now explicitly includes financial capacity.
• Inventory relegation covenants, floating-rate exposure and factoring with recourse; boards should know their 12/24/36-month transfer settlement profile.
• Expect the IFR’s AFR action plan to constrain future borrowing and require higher cash holdings (p.37).

For lenders and transfer financiers

• The IFR has put lender concentration and recourse on the record; expect data requests on exposure, terms and counterparties, and potential licensing conditions on club borrowing.
• Championship exposures warrant particular scrutiny given the factored-to-remaining receivable position and SCR loosening.

For investors and acquirers

• The IFR’s indicative returns (–41% on average) will frame regulatory expectations of owner capacity; acquisition models should assume sustained funding of losses and a materially higher bar on owner financial resources.
• Distribution reform (merit rakes, parachute phase-down) changes Championship economics, price it explicitly.

Suggested consultation response points (deadline 9 December 2026)

• Request a correlated, system-wide stress scenario combining broadcast, investor-appetite, player-value and interest-rate shocks, published at least in summary form.

• Request a transfer-obligation network analysis (counterparties, recourse, maturities, cross-border share) and disclosure of lender concentration by provider tier.

• Propose a minimum verifiable liquidity standard (committed funding or cash cover for a defined number of operating days) as part of Appropriate Financial Resources.

• Ask the IFR to clarify the creditor-priority status of assigned transfer receivables and the treatment of factoring in its debt metrics.

• Seek bringing forward the stress-test deadline for Championship clubs and clubs with factored receivables exceeding remaining receivables.

• Request inclusion of non-interest-bearing shareholder loans and multi-club related-party exposures in the systemic risk assessment.

• Invite assessment of a central transfer clearing and netting mechanism as a systemic-risk mitigant.

Appendix: Key figures register with page references

Figure	Value	Page
Total revenue, top five tiers, 2025/26	c.£9bn	19
Highest PL vs lowest NL club revenue	605x	17
Clubs loss-making before tax, 2025/26	94%	22, 75
Avg PL loss before tax 2021/22 → 2025/26	£20m → £44m	75
Avg Championship loss 2025/26	£22m (c.59% of revenue)	75
EFL & NL clubs with negative operating cash flow	83%	89
Clubs <90 / <30 days survival without owner funding	66% / 29%	96
Clubs with ≥6 / ≥12 owner injections in a year	67 / 28	98
Clubs without funding contingency plan / downside forecast	76 / 71	99
Negative equity: EFL & NL (book) / PL (book)	63% / 20%	102
EFL negative equity after squad market value	46%	104
EFL & NL football net debt > EV	27%	105
EFL & NL clubs with negative EBITDA	97%	107
Formal insolvency events since 1992 / liquidations	71 / 8	111–112
Clubs in financial distress since 2018/19	≥20	112
Gross interest-bearing debt 2020/21 / 2024/25 / 2026/27F	£2.8bn / £4.1bn / £5.1bn	78
Interest cost 2020/21 → 2024/25	£97m → £455m	82
Implied cost of debt	3.4% → 11.0%	82
PL clubs with floating-rate facility / relegation covenant	79% / 60%	82–83
Security pledged (total / PL)	£13.7bn / £12.1bn	84
Transfer payables / receivables / net	£4.8bn / £1.5bn / £3.4bn	180
Transfer factoring executed 2024/25	£779m	181
Receivables monetised (stock)	c.£1.2bn	182–184
Transfer finance lenders / top-5 share / largest	12 / 93.6% / 43%	183
PL distribution per club / non-parachute Championship	£117–198m / £12m	137
Revenue fall on relegation from PL (2024/25)	–£70m (–42%)	140
Championship SCR additional headroom	£460m	144
Promoted club first-season PL survival	47%	150
Average indicative investor return 2021/22–2025/26	–41% (FTSE 100 >+36%)	171–173
PL clubs in multi-club / multi-sport structures	85%	50
PL administrative expenses 2015/16 → 2024/25	£45m → £212m	195

Source: IFR, State of the Game Report (draft for consultation, October 2026).