A stark financial divide is opening up between the Premier League and the rest of English football, according to a major new analysis. The report lands as the new Independent Football Regulator (IFR) prepares to oversee the sport's often turbulent finances.
The Growing Financial Chasm
The latest annual study from consultants LCP, analysing the 2023-24 season, shows that while overall losses across the English football pyramid fell to £0.8bn, this masks a critical split. The improvement is solely due to the Premier League's financial recovery. Losses in the EFL Championship grew to £369m, a figure 42% higher than the Premier League's total deficit.
LCP describes this as "a growing decoupling of the Premier League from the rest of the football pyramid." The loss margin for top-flight clubs was just 4%, compared to a staggering 38% in the Championship and 68% in League One.
The Regulator's Daunting Task
The IFR, established by the government, will inherit the challenge of policing club finances. Its creation follows widespread criticism of the existing bodies—the FA, Premier League, and EFL—for their handling of unfit owners and financial sustainability. Many clubs have faced points deductions and relegation after financial failures, eroding trust in the old system.
One Premier League chairman privately expressed a weary hope that the new regulator doesn't "mess it up," reflecting industry scepticism about bureaucratic intervention. However, with the regulator now a reality, its immediate test will be the long-running stand-off over funding.
Parachute Payments and a Potential Deal
The Premier League and EFL have been locked in sporadic negotiations over the share of broadcast revenue that flows down the pyramid. LCP suggests any new financial settlement should include strict ring-fencing of funds for infrastructure, academies, and debt repayment, rather than simply inflating player wages.
In a potential compromise, the report suggests the IFR could back the EFL's call to end parachute payments for relegated clubs, which distort competition in the Championship. In return, the EFL might accept tighter controls on how its clubs spend any increased funding from the Premier League.
"The EFL to accept strict ring-fencing in return for the PL conceding a substantial reduction in PL parachute payments. There’s my Christmas present idea for the IFR’s mediators," writes sports columnist Ed Warner.
The report underscores the scale of the IFR's mission: to bridge a widening financial gap and impose stability on a football landscape where, for many clubs, the dream of on-pitch success continues to outweigh the imperative of balance-sheet prudence.
