England's Independent Football Regulator says the country's clubs are "dangerously exposed" to financial risk, after a newly released report found that 94 percent of clubs across the top five divisions were operating at a loss.
The IFR, which was established last year, has proposed stronger cost controls and contingency planning as part of a six-point plan aimed at improving the financial sustainability of the English game.
Its draft State of the Game report found that nearly two-thirds of English Football League and National League clubs were "technically insolvent" and increasingly reliant on cash injections from their owners. The report will undergo an eight-week public consultation before a final version is published.
IFR Chair David Kogan said some clubs are among the richest and most competitive in the world, while others are standing on the edge of financial disaster. He said a significant number of clubs have told the regulator they would not survive if their owners walked away.
The regulator said clubs should manage financial risks more effectively and put contingency plans in place in case owners withdraw their support.
Britain's culture secretary, Lisa Nandy, said the findings painted a stark picture of club finances. She said football fans have for years lived with the anxiety of knowing their club could be one bad owner or poor month away from ruin, and said the report had "blown the doors off the game" with the starkest uncovering yet of English football club finances.
The Premier League said it agreed with the report's preference for a "football-led solution to revenue distribution," adding that new funding must go hand in hand with effective financial controls and wider reforms to strengthen clubs. The league is currently negotiating a new revenue-sharing deal with the English Football League. Media reports cited in the report said Premier League clubs have offered $4.2 billion over 10 years in addition to existing funding, while the EFL has asked for $2.3 billion over five years. The Premier League said its proposal, unanimously approved by its clubs in July, meets the objectives the IFR set out in its report.
Manchester City case looms over regulator
Kogan said he had faced no political pressure since Manchester City were found guilty of serious breaches of the Premier League's financial rules by an independent commission. City have appealed the decision and continue to maintain their innocence, saying the commission's opinion contains "clear material errors."
The IFR has the power to assess the suitability of club owners over financial wrongdoing, raising the possibility of scrutiny of City's ownership if the club loses its appeal.
Kogan said he had made it very clear that any form of political interference in how the regulator operates would result in his resignation from the role. He told reporters at Manchester's National Football Museum that the IFR has come under absolutely no political pressure whatsoever on this or any other topic.
The comments come a day after UK Prime Minister Andy Burnham said he would publish details of his past meetings with Manchester City, after Conservative leader Kemi Badenoch challenged him to disclose everything regarding his dealings with the club.
