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‘We are going to be a part of football’s future’ – independent football regulator David Kogan
English football’s independent regulator (IFR) has announced a review of ‘parachute payments’ to relegated clubs as part of a “ground-breaking” analysis of the men’s professional game.
The regulatory body has outlined the scope of its forthcoming State of the Game report, which it says will “shine a light on the financial pressures, governance gaps, and structural risks” confronting the industry.
The draft report, expected later this year, will examine the flow of finances throughout the sport’s top five tiers, as well as the financial stability of clubs.
According to the regulator, this will be “the most in-depth assessment of the industry ever conducted”.
The report is also set to address issues such as “cliff-edges” between leagues, club debt and liquidity, ownership models, the broadcasting landscape, and the impact of player wages and academy development on the game’s financial sustainability.
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Championship sides Leicester and Southampton have experienced relegation from the Premier League twice in the past three seasons, subsequently achieving immediate promotion back in 2023-24.
The report will consider the Premier League’s controversial multi-million pound parachute payments, which are allocated to relegated clubs over a three-year period.
The English Football League (EFL) contends that these payments, amounting to tens of millions of pounds for relegated clubs, distort competition. The EFL has advocated for their elimination to secure a greater share of the revenue generated by the top flight.
However, the Premier League maintains that the payments are vital in assuring club owners’ confidence to invest.
This disagreement is a key factor in the failure of the two leagues to reach a new financial agreement that would channel more funds down the football pyramid, despite years of negotiations and pressure from political figures.
The regulator will possess ‘backstop powers’ to mediate a financial settlement if the Premier League and EFL fail to reach an agreement. The findings of the State of the Game report will inform its perspective on the appropriate level of redistribution from the Premier League.
David Kogan, chair of the independent football regulator, stated: “The game has never been examined like this before… The State of the Game report will give football the clarity it deserves, so decisions by the IFR can be made with confidence and for the long-term.”
The regulator will be empowered to use statutory authority to access information from clubs and competition organizers.
The State of the Game’s terms of reference will be subject to a four-week consultation, with the final report slated for publication in 2027.
The report will also examine Equality, Diversity, and Inclusion (EDI), fan engagement, and heritage, including a review of existing protections for club stadiums, crests, and colors.
However, ticket prices and the video assistant referee (VAR) system fall outside the scope of the report.
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