As required by the Football Governance Act 2025 (the Act) the Independent Football Regulator (IFR) will finalise and publish its first State of the Game Report in May next year.

In preparation the IFR has issued a comprehensive draft of its intended report (the Report) and the clear impression this gives of the state of the English game at the top five levels, is that it’s… well actually, in a “a bit of a state”!

The anguished surprise this triggered in sections of the media seems slightly synthetic given that anyone following football beyond checking the results on a Saturday evening, will know that despite the revenue it generates the game’s financial condition can only be described as “very poorly”.

Certainly, this will not be news to Derby supporters, and indeed our club has achieved the dubious accolade of appearing in the Report as a case study exemplifying the need for change.

The Report illustrates Football’s fragile financial condition, the threat to life this poses for many of the 116 clubs and how the English game can be the richest in the world while simultaneously standing on the brink of disaster. For example:

• Approximately two thirds of clubs reported that they would not survive more than 90 days without injections of owner funding – and that’s the good news, as;
• More than a quarter are saying they would not be able to see out the month, while;
• The IFR believes some clubs’ self reported survival estimates may be optimistic.

Taking 1992 as year zero in the history of English football is guaranteed to annoy, but the inception of the colossal money-making machine that is the Premier League (PL) is at the root of much that is wrong in the game’s financial management.

From 1992 to 2025 average club revenues in the PL saw a 33-fold increase of £330 million, with the Championship’s equivalent metrics for example, just ten-fold and £35 million.

The biggest single contributor to the increase in revenue is of course the sale of broadcast rights, but the Report does refer to an important contribution made by increases in match day revenue. Disappointingly though it provides no real analysis of what this has meant in terms of cost for match going supporters.

As well as between leagues revenue gaps have also emerged within them; the most important being that between the six biggest clubs by revenue in the PL and the rest, and for Derby County, the gap in the Championship caused by parachute payments. In 2025/26 these amounted to £48.7 million for a year one parachute club vs. £5.3 million in solidarity payments for a non-parachute club.

As we know too well clubs on the wrong side of the revenue gap are inclined to overspend, with the greatest incentive to do so being felt by non-parachute clubs in the Championship. As a result, at all five levels profitability has worsened significantly, with 94% of all clubs making a loss in 2025/26. This is especially so below the PL, with losses in the Championship representing 42% of revenue in 2024/25, up from 10% in 1992/93, and with 83% of EFL and National League (NL) clubs having negative operating cash flows. As a consequence:

• Indebtedness has increased to the point where the 116 clubs’ combined debt is forecast to rise to an eye-watering £5.1 billion during the current season.
• Most clubs do not have sufficient liquid assets to cover their short-term liabilities.
• 63% of EFL and NL clubs, and 20% of PL clubs are technically insolvent, as are 46% of EFL clubs even when the market value of playing squads is factored in.

In addition to the financial cliff-edge between PL and Championship, and within the latter due to the imbalances caused by parachute payments the Report identifies a series of other key risks arising from the game’s financial model:

• Owners and investors no longer willing or able to continue to provide funding – a development Derby County supporters are painfully familiar with and a risk exacerbated by the absence at two-thirds of clubs of a related contingency plan.
• Reductions in the level of broadcast revenues, which for the Premier League and EFL will be subject to renegotiation over the next two seasons.
• Increasing levels of transfer debt and its financing arrangements, being major contributors to clubs’ liquidity challenges and vulnerable to changes in lender risk appetite with the potential for financial stress to spread across the game.

As well as finance the Report also covers challenges arising from the conflicting priorities of the game’s multiple stakeholders (governing bodies and competition organisers (domestic and international), the clubs, players and fans). It also concludes that clubs have more to do to achieve compliance with the Football Club Corporate Governance Code (the Club Code) and on employee diversity to properly reflect their local communities.

The report also references the IFR’s survey of supporters’ views on clubs’ approach to and attitude towards fan engagement. This has revealed that while fans are relatively positive about clubs’ willingness to engage, they remain sceptical about the extent to which they actually listen to and consider fans’ views in making decisions.

In response to all the above the Report calls for systemic change in the approach to football’s finances, more robust governance of clubs and improved fan engagement.  In this regard it proposes a six-point action plan:

• Reform of revenue distribution focusing on financial stability as opposed to encouraging imprudent spending.  The IFR is currently facilitating negotiations between PL and EFL on a settlement that will hopefully mitigate the cost of relegation from the PL and reduce the impact of parachute payments on financial incentives in the Championship.
• Action by leagues, clubs and other stakeholders to reduce losses, including steps to address concerns about ever increasing agents’ fees.
• Action at NL level to ensure football governance addresses risks arising from the professional status of almost all its clubs and their limited ability to raise funds.
• Improved management of financial risk by clubs. All clubs are to commit to a plan to meet the “appropriate financial resources” requirement of the Act by 2030, with the plan to to be agreed before the start of next season.
• By May 2030 clubs will be required to demonstrate how they have consulted fans and have taken their views into account before reaching applicable decisions.
• Improved corporate governance and progress on board and senior executive diversity by clubs, with a statement every two years (from October 2027) explaining how they are applying the Club Code.

As well as sending a powerful message supporting the need for reform to the game’s administrators, the Report provides both opportunities and encouragement to clubs to benchmark themselves against the drivers of financial risk and their management thereof, as well as the IFR’s expectations for club governance and fan engagement.

In this regard a clear priority is the aforementioned plan to meet the “appropriate financial resources” requirement. 

It is hoped that clubs are actively considering their position relative to this requirement and their intended approach to identified deficiencies. 

The development of their plans also represents an opportunity for clubs to demonstrate commitment to fan engagement around the “relevant matters” defined in the Act – particularly those relating to strategic direction and objectives and to clubs’ business priorities – by seeking feedback and challenge from supporter representatives as part of the development process. 

This will also be a test of the IFR’s collaborative approach to regulation. We can only hope it succeeds!