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The financial challenges Nottingham Forest could face if they are ever relegated from the Premier League have been laid bare in a new report.
English football is “standing on the edge of financial disaster”, according to the new Independent Football Regulator. IFR chair David Kogan says there is a “massive contradiction” between the wealth of the Premier League and debt-ridden clubs in the rest of the pyramid.
The regulator’s State of the Game report - which is published today - reveals that nearly two thirds of English Football League and National League clubs are technically insolvent, where their liabilities are greater than their assets. It also says that more than a quarter of clubs would not be able to survive for more than 30 days if owners pulled their funding.
In Evangelos Marinakis, however, Forest at least have an owner who has consistently shown his commitment to the club. The Greek businessman is as ambitious for the Reds as ever, having appointed Oliver Glasner as head coach in the summer.
However, IFR Chair David Kogan said: “At the heart of English football’s success is a massive contradiction. While some of our clubs are among the richest and most competitive in the world, others are standing on the edge of financial disaster.
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“Skyrocketing revenues have been outpaced by costs which in turn have pushed up debt, loss-making and an over-reliance on owner funding. A significant number of clubs that told us they would not survive if their owners walked away. This lack of resilience can no longer be ignored. Anyone reading this report can be in no doubt about the need for intervention.
“Football has always been bloody risky but now if you fail the failure is much harder to take because the numbers are so much bigger and that’s where we come in.”
The 245 page report also reveals: Incredibly, 94 per cent of English football’s top 116 clubs - across the Premier League, EFL and National League - are loss-making; average club revenue has gone up by 2,100 per cent since the Premier League was formed in 1992; wages have gone up by 50 fold in the Premier League; wage costs in the Premier League currently range from £88m to £364m; one Premier League investor said buying into a top flight club was “high risk gambling”.
In all but one of their seasons in the top flight since promotion in 2022, the Reds have battled for survival. The report highlights the “substantial risk” of relegation from the Premier League as clubs suffer a revenue drop of 70 per cent. It highlights Bury, Wigan and Derby County as case studies of how clubs suffer financial difficulties - and warn dozens more clubs are on the brink.
The IFR has set out a six-point plan while also revealing the full details of the “financial deal” between the Premier League and EFL which includes scaling back parachute payments.
The IFR six point plan is…
Revenue distribution should be reformed, but changes should focus on financial stability, not encouraging imprudent spending.
Leagues, clubs and other stakeholders should take action to reduce financial losses.
Action should be taken at National League level to ensure football governance matches the risk within the game.
Clubs must improve how they manage financial risk.
Clubs must show how they take fans’ views into account.
Clubs should improve Corporate Governance and make progress on boardroom and senior executive diversity.
And the full details of the Premier League “deal” - which has been agreed by the 20 top flight clubs, including Forest - would start from the 2026/27 season. It has yet to be rubber-stamped by the EFL but is getting closer.
The IFR has made it clear that the Premier League must reach agreement with the EFL - or it will step in to force the top flight to find more cash for the rest of the pyramid.
The “deal” includes…
Increased solidarity payments: The proposal would more than double existing solidarity payments to EFL clubs.
Merit rakes: The size of each club’s solidarity payments would be dependent on sporting performance for all EFL leagues.
Ring-fenced infrastructure fund: Part of the additional funding would be ring-fenced for infrastructure projects to advance sustainability requirements.
Tighter financial controls: To reduce financial losses in the Championship.
Life-boat fund: The proposal would create a lifeboat fund to help prevent club liquidation.
Reducing parachute payments: The proposal would implement a phased reduction in the level of parachute payments made to relegated Premier League clubs.
Culture Secretary Lisa Nandy said: “Football fans for years have lived with the anxiety of knowing their club could be one bad owner or poor month away from ruin. This report doesn’t just validate that anxiety, it has blown the doors off the game with the most stark uncovering of the state of football club finances in England today.
“It underlines that the fight to establish an Independent Football Regulator was vital to safeguarding the future of English football for its fans. The findings are undeniable: there is no Plan B.
“These clubs belong to their fans. They are nothing without their fans. We are on their side and we will always fight for them. I urge the football authorities and those running clubs to consider these findings for the good of the game, for the fans, and for the communities of which they are so often the bedrock of.”
The Football Supporters’ Association (FSA) chair Tom Greatrex said: “The State of the Game report clearly highlights the unsustainable, broken model of football’s finances. How is our national game, which generates billions in revenue every year, in such a perilous condition with so many clubs living hand-to-mouth and reliant on regular handouts from owners?
“Whether you are a football finance expert or a match going supporter who pays little attention to off-field issues, it is astonishing that almost one in three clubs could not survive for more than a month if an owner stopped funding them. This is an alarm call for English men’s professional football that must precipitate real and lasting change.”
The Premier League said it “welcomed” the new report and pledged to carry on working with the EFL to find a solution.
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