The Independent Football Regulator (IFR) has warned, in a detailed report, of a serious financial crisis in English club football.
“It is the ‘richest, best and most competitive in the world, and yet it is on the brink of a financial disaster’,” said IFR chairman David Kogan on Tuesday.
In its “State of the Game” report, the IFR noted that whilst English football generated £9 billion (€10.6 billion) in revenue last season, 94 per cent of clubs in the top five leagues made losses. The report predicts that total debt in English football will rise to over 5 billion pounds (5.9 billion euros) by the end of the current season, with net transfer debt expected to stand at 3.4 billion pounds (4 billion euros). “Everyone must bear in mind that nothing lasts forever,” said Kogan, referring to the state of English club football.
“We can repair the house whilst the sun is still shining”
The IFR has been tasked with improving the financial stability of the clubs; amongst other things, it is calling for robust contingency plans in the event that funding from club owners ceases. A model for the redistribution of revenue from the Premier League to the lower leagues of the English football pyramid is also under discussion. However, despite lengthy discussions, the leagues have not yet reached an agreement. The IFR would have the authority to enforce an agreement.
The report must now serve as “a wake-up call” for English football, the IFR stated, adding that “the fundamental foundations of the pyramid are under considerable pressure and are in urgent need of reform”. Kogan believes “now is the time to tackle these issues”, he told the BBC, “before the money gradually runs out. We can repair the house whilst the sun is still shining.”
English club football had already come under the spotlight this summer due to the financial scandal surrounding Manchester City. Following breaches of the Premier League’s financial regulations, the ten-time English champions were found guilty on all 115 charges by an independent commission. The consequences the club will face remain to be seen.