The Analysis Series: The IFR’s liquidity rules, financial plan template & Supervisory Strategy: a cash floor, not yet a capital test

 

Source documents	IFR, (Liquidity & Licensing Technical Consultation , November 2026); IFR; Supervisory strategy November 2026 IFR, draft Financial Plan Submission template (Excel, consultation version). All published 10 November 2026.
Prepared by	Paul Quinn,
Date	11 November 2026
Audience	Club boards and finance directors, lenders and transfer financiers, investors, supporters’ trusts and regulatory stakeholders
Consultation window	10 November 2026 to 18 December 2026 (six weeks)
Scope	All three documents read in full. Analysis weighted to the liquidity framework (Consultation Chapter 1; Strategy sections 4–7) and to what the financial plan template will capture.

Summary

KEY FINDING Bottom line

For the first time an English football regulator has set a hard, quantified cash floor, and has defined what counts towards it more strictly than any rule in the game.

From 2027 every EFL and National League club will be told its own liquidity expectation: one month’s wages for every club, plus up to five months’ forecast operating cash losses for clubs judged higher risk. Two-thirds must sit as unencumbered cash, gilts, US Treasuries or money-market funds in the licensed club’s own name. Undrawn bank facilities, owners’ promises and unsold players do not count. The buffer is built a third at a time, with the full amount due by summer 2030.

On the quality of liquidity the IFR has got it right, and gone further than I proposed in October. On the quantity, the calibration is modest, and the IFR says so itself. The weaknesses are structural: the Premier League is carved out of the starting expectations; the stress tests are single-factor and mild; and the package remains a liquidity regime. It asks whether a club can pay its bills through a shock. It does not ask whether the club has the permanent, loss-absorbing capital to survive one.

In my analysis of the draft State of the Game report on 13 October I concluded that the IFR’s response was “supervisory, not prudential” and that it proposed “no hard liquidity floor”. Today’s documents answer the second half of that criticism directly. They do not yet answer the argument I set out in Solvency, not liquidity? on 6 October: that every principal financial rule in English football measures liquidity or flow, and none measures capital. This package adds a much better liquidity rule. It does not add a capital rule.

Issue	What the IFR proposes	My assessment
Liquidity floor	Club-specific expectation: 1 month’s wages plus 0, 2 or 5 months’ operating cash losses by risk tier	Right instrument, modest calibration
Quality of liquidity	Unencumbered, in the licensed entity’s name, under effective control; no RCFs, owner letters or players	Strongest element of the package
Premier League	No starting expectation; risk assessment only; review in 2028	Principal weakness; internally inconsistent
Transition	1/3 by summer 2028, 2/3 by 2029, full by summer 2030	Back-loaded into the 2028/29 broadcast cycle
Financial plan template	Three-year forecasts, cash history, survival days, debt, security and club-by-club transfer schedules	A major data advance; captures most of what I asked for
Stress tests	10% income fall; relegation; loss of main external funding	Single-factor; the income shock is mild
Solvency / capital	Qualitative risk factor; possible debt or cost DLCs	Still no capital test
Licence transfers	IFR discretion to move a licence between entities, with anti-avoidance	Necessary; creditor and heritage protections should be explicit
Supervision	Named supervisors, annual club risk letters, powers as last resort	Sensible architecture; no public disclosure

What was published on 10th November 2026

The IFR released three linked documents, which should be read together.

• The Supervisory Strategy sets out how the IFR will supervise clubs between provisional licensing in May 2027 and full licensing by May 2030, and responds to the most pressing findings of the State of the Game report. It is the IFR’s policy statement; parts will be updated after consultation.
• The Liquidity & Licensing Technical Consultation sets out the detailed proposal on liquidity (Chapter 1), consults on the financial plan template (Chapter 2) and proposes a new power to transfer a licence between legal entities (Chapter 3 and Annex A). It is open until 18 December 2026.
• The draft Financial Plan Submission template is the Excel workbook every club will complete for its financial plan Mandatory Licence Condition (MLC), first due in May 2028 and annually thereafter. The consultation version has no formulas, drop-downs or cell locking, and the final version may be structured differently.

The legal frame is unchanged. Under the Football Governance Act 2025 a club needs a licence to play in the top five divisions from 2027/28. To obtain a full licence by May 2030 it must meet three Threshold Requirements, including holding appropriate financial resources. The IFR’s Licensing Guidance (1 July 2026) already defined that test against four risk factors: liquidity and cash flow; debt and solvency; business model; and governance. Today’s documents put numbers on the first of those factors.

Date	Milestone
10 Nov – 18 Dec 2026	Liquidity & Licensing consultation open
9 Dec 2026	State of the Game consultation closes (per the draft report)
May 2027	Provisional licences granted; IFR can use formal powers, including Discretionary Licence Conditions (DLCs)
Summer 2027	Clubs’ action plans to 2030 agreed; first annual club-specific liquidity expectation communicated
15 Aug 2027	First annual fan consultation report due
31 Oct 2027	First corporate governance statement due
Nov 2027	IFR fan engagement Supervisory Statement
May 2028	First financial plans, including three mandatory stress tests
Summer 2028	One-third of liquidity expectation to be met
2028	Formal review of the liquidity framework, including the Premier League position
Summer 2029	Two-thirds to be met
May / Summer 2030	Full licences; full liquidity expectation met

Why the IFR has started with liquidity

The Supervisory Strategy is unusually blunt about the starting position. Drawing on the State of the Game report, it records that most clubs do not generate enough cash from operations to cover their expenses and so depend on owner funding; that many owners fund sporadically, some more than once a month, so that little cash is held in reserve; that if an owner stops, many clubs “could default on their obligations (e.g. payroll) within days”; and that most clubs have no contingency plan (Strategy, 4.4). It concludes that, at present, “many clubs would not satisfy” the liquidity element of the Threshold Requirement (4.5).

Two further passages deserve attention. First, the IFR states that the stress scenarios it describes, a delayed owner injection missing payroll, a sudden income fall, an unforeseen tax bill or fine, an owner stopping funding, “are not abstract”: since its inception it has “observed several occasions where a club has or has very nearly failed to meet its commitments” as a result (5.5). Second, it confronts the owners’ objection directly. Avoiding “trapped capital” may be rational for an owner, but it leaves the club, “the entities that the IFR has been established to protect”, exposed to near-immediate distress if the owner’s intentions or circumstances change (5.9). That is the right ordering of interests.

MY ASSESSMENT The trigger, not the cause

The IFR’s own econometrics in the State of the Game report found that liquidity is the best short-run predictor of distress, while 97% of EFL and National League clubs have negative EBITDA. My conclusion then was that “the trigger is liquidity; the cause is solvency”, and that “no liquidity fix survives a business model that consumes cash structurally”.

The IFR accepts the first half and acknowledges the second: liquidity is “only one part” of a club’s financial position, and the IFR will continue to consider “debt, solvency, business model and governance” (Consultation, p.4). It describes the liquidity expectations as “the start of a multi-year process” (Strategy, 4.7). That is honest. But it means the structural question, whether clubs hold any real equity, has been deferred rather than answered.

The liquidity framework in detail

Each EFL and National League club will receive, annually from summer 2027, a club-specific liquidity expectation built from three elements: a baseline common to all clubs, a risk-adjusted component, and an adjustment for individual circumstances (Consultation, 1.5).

Risk profile	Baseline	Risk-adjusted component	Qualifying liquidity	Timeframe
Higher	1 month’s wages	5 months’ operating losses	Two-thirds in cash, gilts, US Treasuries or MMFs in the club’s name; up to one-third through a portion of committed, unencumbered future transfer receivables	Built up a third a year to 2030
Medium	1 month’s wages	2 months’ operating losses	As above	As above
Lower	1 month’s wages	Nil	As above	As above

The definitions matter more than the table.

• Wages are forecast cash expenditure on player and non-player wages, salaries and employment costs, taken from the club’s financial plan. The baseline is one month’s average over the forecast season (1.6a).
• Operating losses are monthly average forecast net operating cash outflows, on a cash basis, excluding non-cash items such as amortisation (1.6b). In the template, operating cash flow sits separately from capital expenditure, player registrations and financing, so player sales do not reduce the operating-loss measure. Where losses are immaterial or operating cash flow is positive, the IFR may apply a proxy so that the risk component is still scaled.
• Both are forward-looking, taken from the submitted plan, and subject to IFR adjustment (1.7). The risk tier is set using the indicators of low risk listed in the Strategy (7.3) and the Consultation (1.9): income covering operating costs; no large negative cash flows; pre-funding forecast losses; limited reliance on frequent owner injections; no large or growing non-strategic external debt; no covenants that would impose immediate cash pressure if triggered; limited encumbrance of assets and future income; robust planning and scenario analysis; and no contingent liabilities that could cause distress if they crystallised.

The IFR frames the calibration as proportionate. It notes that the one-month baseline is “materially below” practice in other industries, where reserves of three to nine months’ operating costs are typical (1.8a; Strategy, 5.2), and that clubs that reduce their risk will reduce their expectation (1.10). The framework is a starting point, to be reviewed formally in 2028 once the first financial plans and stress tests are in.

What the numbers mean for a typical Championship club

The IFR publishes no worked example, so I have built an illustrative one from State of the Game averages. It is not a forecast for any club.

Input or output	Figure	Basis
Revenue (non-parachute Championship club)	c.£37m	Promotion lifted non-parachute revenue by £139m, or 376% (SotG p.143); £139m ÷ 3.76
Player wages	c.£31m a year; c.£2.6m a month	84% of revenue (SotG p.143). Excludes non-player staff, so understates the IFR baseline
Operating cash loss	c.£21m a year; c.£1.8m a month	Championship operating cash flow of –57p per £1 of revenue (SotG pp.75–76)
Expectation: lower risk	c.£2.6m	1 month’s wages
Expectation: medium risk	c.£6.1m	£2.6m + 2 × £1.8m
Expectation: higher risk	c.£11.4m	£2.6m + 5 × £1.8m
Higher-risk phasing	c.£3.8m (2028); c.£7.6m (2029); c.£11.4m (2030)	One-third a year
Higher-risk buffer as runway	c.6½ months of average net cash burn	£11.4m ÷ £1.8m. Seasonal troughs would shorten it

Two readings follow. The first is that the higher-risk expectation is meaningful. Against the State of the Game finding that most Championship clubs hold less than 30 days’ cash, a buffer of circa six months’ average net burn is a step change. The IFR’s own distress analysis showed cash days at distressed clubs falling from about 180 to about 30 in the year before distress. This buffer is sized to sit around the top of that path.

The second is that the buffer is not loss-absorbing capital. It is cash that is consumed in a stress and must be rebuilt, almost certainly by the owner. For a higher-risk club burning £21m a year, an £11.4m reserve buys time. It does not change the business model, and the 2030 deadline arrives after the next domestic broadcast cycle begins in 2028/29.

Qualifying liquidity: the strongest part of the package

A club can meet its expectation only through specific “Qualifying Liquidity”, a deliberately narrow subset of the IFR’s wider definition of liquid assets (1.18).

Element	Counts?	Condition
Cash in a UK instant access account	Yes (any share)	Fully unencumbered; in the licensed entity’s name; under the effective control of club officials
Gilts, US Treasuries, money-market fund shares	Yes (any share)	Directly owned; unencumbered; marked to market; club must test and document conversion time and hold cash to cover it
UK fixed-term deposits or CDs (max 35 days)	Final third only	In the licensed entity’s name; usable on maturity
Committed future transfer receivables	Final third only, haircut	Contractually committed to the licensed entity; unencumbered and available to be forward-factored; allowable share depends on counterparty reliability and tenor
Undrawn overdraft or RCF	No	Revocable and likely to be withdrawn in stress. A genuinely irrevocable facility may be discussed for the final third
Written owner commitments	No	No contractual basis, or revocable
Unsold players	No	Value realisable only in windows; volatile
Cash in an account subject to a charge, or with the overdraft bank without a set-off waiver	No	Must be released from the charge, held elsewhere, or the set-off right formally waived

“Effective control” means arrangements under which the money can be used without material restriction, for example without needing external consent, and clubs must be able to demonstrate it (1.21). The IFR says its emphasis on unencumbered resources is “deliberate”, so that the reserve “will genuinely be usable when a stress takes hold” (1.22). The “club” follows the IFR’s reporting perimeter, but the IFR keeps discretion to name the specific entity that must hold the cash (1.27).

MY ASSESSMENT The IFR has gone further than I proposed, and it is right to

In October I suggested that “a minimum, verifiable funding commitment, committed owner facilities or escrowed cover for a defined number of operating days” was the proportionate middle course. The IFR has rejected committed owner facilities and written owner commitments outright, and it is right. The State of the Game report itself records Wigan entering administration within a month of a change of ownership when £6m of promised funding did not arrive. A promise is not a reserve.

This is the post-2008 lesson applied properly. In Solvency, not liquidity? I argued that owner lending is football’s equivalent of pre-2008 hybrid capital: “it counts in good times and disappears when needed.” The IFR has applied the same logic to liquidity. Only what cannot be withdrawn, and is already in the club’s hands, counts. The Basel III liquidity rules made the same distinction between high-quality liquid assets and everything else.

The contrast with the Premier League’s new Sustainability and Systemic Resilience (SSR) liquidity test is stark. As I noted in my analysis of squad-value financing, the SSR test counts 40% of squad market value as a liquid asset. The IFR counts unsold players at nil.

Three consequences will bite harder than the headline numbers suggest.

• Encumbrance. Many club borrowings sit behind all-asset debentures that include bank accounts. Burnley’s 2025 Fasanara charges, for example, cover all property, including Turf Moor. The State of the Game report recorded about £13.7bn of assets, revenues and equity pledged as security across the pyramid. Every such club must negotiate a carve-out for a ring-fenced account, or move the reserve to a different bank. The IFR will agree transition timetables individually (1.24), but lenders now have a regulatory reason to accept a carve-out, since an unencumbered reserve also protects them.
• Cash in the wrong entity. Holding the reserve in the licensed entity’s name addresses a pattern I have documented repeatedly. Newcastle United’s accounts show £189.1m owed by group undertakings following related-party asset sales, a receivable rather than cash. Burnley FC Holdings is owed £81m by Velocity Capital (UK) Holdings, a parent that has never filed accounts and whose cash flow underpins Burnley’s going-concern case. Neither balance would qualify. The IFR’s discretion to name the entity that must hold the cash should be used.
• Factoring now has a regulatory cost. Only unencumbered receivables count towards the final third. A receivable that has been factored, or pledged, is excluded. In the Championship, where on my calculation from State of the Game data 61% of the transfer-receivable stream has already been monetised, the eligible pool is thin. That is an implicit brake on factoring, and a welcome one.

The receivables route still needs tightening. A transfer receivable is a claim on another club, and as I set out in Football’s shadow credit market, inter-club instalments are exactly the channel through which stress spreads from one club to the next. Counting them as liquidity, even at a haircut, imports counterparty risk into the buffer. The IFR should publish its haircut method, cap the share of the final third that any single counterparty can provide, and apply a deeper discount to receivables owed by clubs outside the English system, which sit beyond both its reach and the football creditor rule.

The Premier League carve-out

The IFR is “not proposing to apply the concept of starting liquidity expectations to Premier League clubs at this stage” (1.13). Its reasons are that State of the Game evidence suggests liquidity risk is “less acute” in the Premier League, and that its clubs have “greater access to commercial financing” and better recovery options (1.12; Strategy, 6.4). All Premier League clubs remain subject to a risk assessment, and some may be required to hold more liquid assets. A promoted club is expected at least to keep the reserve it held in the Championship (1.14). A relegated club may be granted transitional arrangements (1.15). The position will be reviewed in 2028.

MY ASSESSMENT The reasoning is inconsistent

The IFR excludes undrawn RCFs from EFL clubs’ qualifying liquidity because such facilities are “highly likely to be withdrawn should a club enter into a stress” (1.25). It then exempts Premier League clubs from a starting expectation partly because they can borrow commercially. That is the same assumption, applied in reverse. Access to commercial credit is reliable until the moment it is needed, which is the core lesson of 2008.

The evidence does not support a lower-risk presumption across the division. The State of the Game report records that 20% of Premier League clubs have negative book equity; 60% have at least one facility with a relegation covenant, and about 35% of facilities require full or partial repayment on relegation; 79% have floating-rate exposure; net transfer debt is about £3.1bn; and, on my calculation from its figures, 44% of the division’s transfer-receivable stream has already been monetised. The Premier League’s adjusted quick ratio, excluding squad value, was 0.57.

My stress test of Manchester United shows how this plays out at the largest club. Relegation would breach the £125m minimum EBITDA covenant in a second Championship season, at which point the £200m RCF that makes up most of the club’s liquidity could be withdrawn. Liquidity that depends on a lender’s continued consent is exactly what the IFR refuses to count for a Championship club.

There is also a timing problem. Relegation is the defining shock in English football. Under the proposals, a club builds no IFR reserve while in the Premier League, when its revenue is highest and a buffer is cheapest to build. It then faces the requirement, with transitional relief, in the Championship, after revenue has fallen by an average of about £70m (42%). In the capital framework I proposed in October I argued for a dedicated relegation buffer, sized to the modelled revenue loss net of parachute payments and wage reductions, held while the club is in the Premier League. The 2028 review should start there. As an interim step, the IFR’s Premier League risk assessments should test liquidity explicitly against a relegation scenario that assumes undrawn facilities are withdrawn.

Transition, enforcement and supervision

Clubs will build the reserve in thirds by summer 2028, 2029 and 2030, and must not fall below the applicable level once reached (1.29–1.31). From 2028, stress-test results will feed into the risk assessment and may change a club’s expectation (1.32). Assessments are annual, but can be brought forward after a material change (1.33). Where the IFR has particular concerns it will agree a faster timeline, and if necessary impose DLCs: a formal liquidity requirement, a debt requirement or a reduction in overall cost (1.34). For the highest-risk clubs, reporting may move to monthly liquidity data (Strategy, 9.1), and financial plans may be required earlier or more often (Consultation, fn.1).

The Supervisory Strategy sets the tone of enforcement. It has four strands: clear and consistent expectations (an annual Supervisory Strategy, a structured risk framework and an annual Club Risk Letter); supportive, relationship-driven engagement through a named supervisor working on a “no surprises” basis; intensity of supervision proportionate to risk; and formal powers used as a last resort (Strategy, 2.1). Clubs will be expected to notify the IFR of material changes under s.50 of the Act, and to comply with “not just the letter, but the spirit” of the guidance.

MY ASSESSMENT Supervision without disclosure

This is a sensible way to start a new regime, and the power to escalate to DLCs from May 2027 gives it teeth. Two reservations. First, the phasing remains back-loaded: only one-third of the reserve is required before the first stress tests are submitted, and the full amount coincides with the repricing risk of the 2028/29 rights cycle. The IFR should use its stated discretion to accelerate the timeline for clubs whose factored receivables exceed their remaining receivables, and for clubs whose survival-days return falls below 15.

Second, the Club Risk Letters and club-specific expectations will be confidential. Supporters, local creditors and HMRC, the parties who bear the losses when a club fails, will not know which clubs are rated higher-risk or whether they are meeting their expectation. Banking regulation answered that problem with mandatory public disclosure of capital and liquidity ratios. The IFR should commit, at the 2028 review, to a minimum public disclosure standard.

The financial plan template: the most important data advance yet

The consultation asks only about the template’s structure and content, not submission process or definitions (2.5–2.6). The workbook is more significant than the consultation’s brief treatment suggests. Plans are submitted on 31 May and cover the rest of the current year plus the following two (2.3), and returns to leagues will not satisfy the MLC (2.8).

Template section	What it requires	Why it matters
3.1–3.2 P&L and balance sheet	Three-year forecasts (half-yearly for the first forecast year); owner and related-party loans split from external debt; transfer debtors and creditors split short and long-term; “Other Unencumbered Qualifying Liquid Assets” line	Non-interest-bearing shareholder loans now sit in a common format, a gap I flagged in October
3.2b Overdue payables	Overdue sums owed to clubs, leagues, staff and agents, HMRC, and trade creditors over 120 days	Early-warning indicators of a liquidity event
3.3a Cash history	Twelve month-end balances; lowest balance and date; “survival days” counting only cash and facilities the lender cannot cancel at short notice; occasions under 15 days; number of owner injections	Puts the State of the Game’s survey questions on a statutory, recurring footing
3.3b–d Cash-flow forecast	Quarterly; fixed and variable distributions; contracted and planned transfers; forward financing of transfer and broadcast income; committed and planned owner and external loans; undrawn facilities by type, including private credit; owner funding schedule with evidence	Separates contracted cash from hope
5.1–5.3 Stress tests	Pre- and post-mitigation quarterly cash flows for: a 10% fall in annual income; relegation; removal of the main external funding source. Mitigations split into income, cost and financing actions	Forces contingency planning that 76 clubs said they did not have
6.1 Debt, covenants, security	Facility-level terms, maturity, rate type, whether access is irrevocable, covenants and events of default; covenant breaches and expected breaches, including relegation triggers; a security register by asset or income stream and beneficiary	Maps heritage assets pledged to lenders
6.2 Transfers	Payables and receivables by counterparty club, by year to Year 7+; whether payables have been deferred through forward factoring; whether receivables are unencumbered and available for factoring	A bilateral counterparty and maturity map

MY ASSESSMENT Most of what I asked for, with four gaps

In October I asked the IFR for a transfer-obligation network analysis covering counterparties and maturities, and for non-interest-bearing shareholder loans to be included in its debt measures. Section 6.2 collects club-by-club, year-by-year transfer cash flows from every licensed club. Aggregated, that gives the IFR the counterparty map and settlement profile that, as I wrote in Football’s shadow credit market, “no regulator publishes”. The flag for forward-factored payables, the less-noticed practice of financing the buying side, is a thoughtful inclusion.

Four gaps remain. (1) Recourse. Nothing records whether factored receivables were sold with or without recourse, so the contingent liability of selling clubs stays unknown. (2) Contingent transfer fees. The schedules ask for “planned” payments on agreed terms; appearance, performance and sell-on liabilities are not separately captured. (3) Contracted wage commitments. These are the largest fixed liability in football, but the template records forecast wage spend, not the remaining contractual commitment. (4) Capital. The balance sheet collects net assets and owner loans, but no metric converts them into a measure of loss-absorbing capacity.

The stress tests are the weaker part of the template. Each scenario is run alone. The 10% income reduction is mild beside the IFR’s own State of the Game sensitivities, which modelled broadcast falls of 15%, 25% and 50%. The scenario I argued “is the scenario that matters” is not required: a correlated shock in which broadcast values fall, investor appetite weakens, player values drop and refinancing costs rise together, which is the “negative spiral” the IFR itself describes. Nor is there a scenario for withdrawal of factoring and refinancing, or the failure of the largest transfer counterparty. All three appeared in the stress framework I proposed on 6 October.

Licence transfers

The Act and the current rules contain no mechanism for moving a licence from the entity that operates the team to another entity in the same structure (3.3). The IFR proposes new Licensing Rules B1.5–B1.6 giving it sole discretion to approve a transfer on written request, with guidance (1.32–1.39) requiring advance notice and: details of the new entity; the reason; before-and-after group structure charts; evidence of continued compliance with MLCs, Threshold Requirements and any DLCs; and “details of any assets or liabilities that will remain with, or transfer from, the current legal entity”. Existing conditions follow the licence. The IFR may refuse a transfer that would circumvent the regime, and ownership-driven transfers will run alongside the Owners, Directors and Senior Executives (ODSE) test.

MY ASSESSMENT Necessary, but name the risks

The power is needed: without it, a routine restructuring could jeopardise a club’s place in its competition. But a change of operating entity is also the classic route by which valuable assets and income are separated from creditors, a pattern the IFR’s own State of the Game report described as “creative compliance” through intra-group stadium and other asset sales.

The guidance should say so explicitly. A transfer should normally be refused unless: the new entity takes on all football and non-football liabilities of the old one, or creditors (HMRC and local suppliers included) are demonstrably no worse off; the stadium, training ground and security position is unchanged or improved; the accumulated qualifying liquidity moves with the licence; and, where a parent is involved, its own accounts are filed and up to date. The Velocity–Burnley case shows why that last condition is not a formality.

What is still missing: a capital test

The documents are clear that liquidity is a first step. The Strategy says the IFR will engage clubs “in due course on other central aspects of financial risk” (4.8), and that unsustainable debt “can pose significant risks” to resilience (8.1a). But its only debt proposal is to “work with clubs” on sustainable debt management.

The gap is the one I described in Solvency, not liquidity?. A club can meet every rule in the English game, and now meet its IFR liquidity expectation, while holding negative tangible equity funded by revocable owner loans and factored receivables. The State of the Game report found that 63% of EFL and National League clubs have negative book equity, 46% of EFL clubs are still in negative equity after adding squad market value, and 27% have football net debt above their estimated enterprise value. At that point a financially motivated owner’s equity is out of the money, and the owner’s incentive to keep funding weakens. A cash reserve does not change that incentive. Permanent capital does.

MY ASSESSMENT The 2028 review should put the capital question

The template will give the IFR, from May 2028, every input needed to calibrate a capital standard: net assets, owner loans by type, security, transfer positions and stress-tested cash flows. My proposal of 6 October set out the architecture: qualifying “Football Core Equity” (tangible equity plus owner funding that is formally subordinated, irrevocable and non-interest-bearing); a risk-exposure measure built on commitments; a minimum ratio and conservation buffer; a relegation buffer; a leverage backstop; and an annual stress test.

The cheapest first step costs committed owners nothing: require owner funding that owners describe as permanent to be made permanent in law, through subordination or conversion to equity. The IFR has already decided that an owner’s promise is not liquidity. The same reasoning says that an owner’s revocable loan is not capital.

Implications

For EFL and National League boards. Build the template now and run it on current numbers. Work out your likely risk tier against the nine indicators, and calculate the cost of moving down a tier: every month of operating loss removed from the forecast reduces the expectation directly. Inventory every charge over bank accounts and every overdraft set-off right, and open negotiations with lenders. Stop treating factoring as free: a factored receivable no longer counts towards the final third.

For Premier League boards. The absence of a starting expectation is not an exemption. Expect the risk assessment to test liquidity against relegation with undrawn facilities assumed withdrawn, and expect the 2028 review to revisit the carve-out. Clubs with relegation covenants and RCF-dependent liquidity are the obvious candidates for club-specific requirements.

For lenders and transfer financiers. Requests to carve ring-fenced accounts out of security packages will follow. Facility-level terms, covenants and security will be reported to the IFR annually. Factoring demand may soften in the Championship as clubs preserve eligible receivables.

For owners and acquirers. Model the reserve as permanently trapped capital: £10m or more at a higher-risk Championship club, on my illustration. The stress scenario of losing the main external funding source assumes the owner stops, which by design penalises dependence.

For supporters’ trusts. The reserve is the first protection the regime gives the club, as distinct from its owner. Ask your club, through the fan consultation process, which risk tier it expects and how it will fund the reserve.

Suggested consultation response points (deadline 18 December 2026)

1. Retain the qualifying-liquidity definitions without dilution, in particular the exclusion of undrawn facilities, owner commitments and player values.
2. Publish the haircut method for transfer receivables, cap single-counterparty concentration within the final third, and apply a deeper discount to receivables owed by clubs outside English football.
3. Apply a starting expectation to Premier League clubs from the 2028 review, at minimum a relegation buffer, and in the interim test Premier League liquidity against relegation with undrawn facilities assumed withdrawn.
4. Use the stated discretion to accelerate the timetable for clubs with factored receivables exceeding remaining receivables, or with survival days below 15 in the prior year.
5. Add a correlated stress scenario (broadcast fall, investor retrenchment, player-value impairment and higher refinancing costs together), and scenarios for withdrawal of factoring and default of the largest transfer counterparty. Raise the income shock above 10%.
6. Add template fields for factoring recourse, contingent transfer fees by type, and remaining contracted wage commitments by year.
7. Make creditor-protection, heritage-asset and parent-disclosure conditions explicit in the licence-transfer guidance, and require accumulated qualifying liquidity to move with the licence.
8. Commit to a minimum public disclosure standard for risk tier and compliance with the liquidity expectation.
9. Signal that the 2028 review will consider a capital-adequacy standard, starting with mandatory subordination or conversion of owner funding described as permanent.

Data limitations and caveats

• All three documents are consultation or policy drafts. The IFR states that relevant sections of the Supervisory Strategy and Licensing Rules and Guidance will be updated after consultation, and that the final template may be structured differently.
• The IFR has not published its internal risk framework, its tier thresholds, the operating-loss proxy for clubs with positive operating cash flow, or the transfer-receivable haircut. Statements about which clubs will fall into which tier are therefore judgement.
• The Championship illustration combines division-level State of the Game averages (draft, October 2026), including a Championship-wide operating cash flow ratio that includes parachute clubs, with non-parachute revenue and wage figures. It uses player wages only, which understates the IFR’s wage baseline. It is indicative, not a projection for any club.
• State of the Game figures are from the IFR’s draft for consultation and may be revised. 2025/26 data combine actuals and club forecasts as at March 2026.
• The Manchester United, Newcastle United and Burnley references draw on my earlier published analyses and the public filings cited in them.

Related analysis on The Esk

• IFR State of the Game 2026: what the report finds, what it misses, and what boards should do about it (13 October 2026)
• Solvency, not liquidity? Gordon Brown’s diagnosis of the 2008 banking crisis and its implications for capital adequacy and regulation in English football (6 October 2026)
• Squad-value financing in football, private credit, unsold players and the return of mark-to-model lending (16 October 2026)
• Systemic risk: football’s shadow credit market (3 September 2026)
• Manchester United: the financial and covenant consequences of a low finish or relegation in 2026/27 (1 November 2026)
• Newcastle United’s £95m equity injection (5 November 2026)
• Velocity Capital (UK) Holdings: the parent Burnley depends on, and nobody can see (28 October 2026)

Sources

• Independent Football Regulator, Liquidity & Licensing Technical Consultation, Consultation Paper, November 2026 (published 10 November 2026).
• Independent Football Regulator, IFR Supervisory Strategy, November 2026.
• Independent Football Regulator, Financial Plan Submission template (consultation version, Excel), November 2026.
• Independent Football Regulator, Licensing Guidance, 1 July 2026.
• Independent Football Regulator, State of the Game Report (draft for consultation), October 2026.
• Football Governance Act 2025.

Paul Quinn, CWTE Limited. Corrections policy: theesk.org/corrections