English football regulator to propose cost controls: 94% of clubs are losing money

The Independent Football Regulator (IFR) will recommend that clubs adopt stricter cost controls in the State of the Game report published on Tuesday. It is the most eagerly awaited study on the financial health of English men's football, and its findings paint a stark picture: out of the country's 116 biggest clubs, 94% are making losses.

• The draft report is 250 pages long, with the final version due in the spring.
• An eight-week public consultation period begins this week.
• 94% of England's 116 leading clubs are loss-making.
• IFR chair David Kogan and chief executive Richard Monks will hold a press conference in Manchester.
• The regulator has powers to assess the suitability of owners and directors.

A 250-page report on the finances of English football

The document is a draft that will be subject to an eight-week public consultation. The final version will be released in the spring. The work has taken almost 18 months to complete and is the most detailed study ever produced on the football industry and its accounts.

The report stems from the Football Governance Act, the legislation that created the independent regulator. Among its headline conclusions is the finding that the vast majority of clubs across England's top two tiers are not profitable, reinforcing concerns that the current spending model is unsustainable for many organisations.

Cost controls as the regulator's main recommendation

The IFR will set out a series of recommendations for the regulator and clubs to improve financial sustainability. The most significant is the introduction of greater controls on spending, a measure designed to curb the mounting losses affecting teams in both the Premier League and the English Football League.

David Kogan, the organisation's chair, and Richard Monks, its chief executive, will provide further details at a press conference in Manchester on Tuesday. The event comes at a particularly sensitive time, with the Manchester City case still unresolved and the financial settlement between the Premier League and the EFL yet to be agreed.

The Manchester City case and the regulator's powers

The press conference is likely to be dominated by questions about whether the regulator could force the sale of Manchester City if the mass guilty verdicts issued by an independent commission are upheld on appeal.

As the administrator of an enhanced owners, directors and senior executives test, the IFR has the authority to assess the suitability of those running clubs where there is clear evidence of wrongdoing by individuals.

Premier League and EFL settlement talks remain unresolved

EFL clubs had been waiting for this report in the hope that it would strengthen their hand in negotiations with the Premier League over a new financial settlement. The document may not help them as much as they wish, however, as it is likely to include details of extravagant and unsustainable spending by many lower-division clubs.

The Premier League has offered a new deal worth £180m per year over ten years, a significant increase from the current £150m figure. The EFL, for its part, wants £207m a year plus the option to renegotiate after five seasons.

The EFL has also proposed the creation of a so-called lifeboat fund for clubs in financial distress. If the two leagues cannot reach an agreement themselves, the regulator has the power to impose a settlement. Both sides are likely to seize on elements of the report to bolster their arguments.

What the report means for the future of English football

The study arrives at a pivotal moment for the governance of English football. The creation of the IFR represented a historic change in the oversight of the sport, and this first State of the Game report will set the tone for its work in the years ahead.

The combination of cost controls, owner oversight and the ability to intervene in revenue distribution between leagues paints a picture of a regulator with ambitious tools. The challenge will be applying them without curbing the competitiveness of a game that remains the most watched in the world.