Football watchdog to unveil levy proposals as report lays bare game's financial peril

English football's new watchdog will unveil details within days of its new funding levy as it lays bare the scale of the financial perils plaguing the game's professional pyramid.

Sky News has learnt that the Independent Football Regulator (IFR) will publish a consultation during the week of 19 October setting out plans to charge clubs on a sliding scale which will cover both the cost of establishing the new body as well as its annual running costs.

Club executives, who received a letter from the IFR this week informing them of its plans, said they were braced for the bill to have risen well beyond the £10m average annual figure projected when the IFR was conceived by the last Conservative government.

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One said the IFR would cost "in the tens of millions of pounds" to run it annually, with top-flight clubs being asked to fund by far the largest share of the bill.

A consultation on the new IFR levy will come a week after the regulator publishes its inaugural State of the Game report, which is expected to conclude that - despite the enormous sums of money being spent in the Premier League - the sport is in a state of severe financial disrepair.

One football industry source said the report, to be published on Tuesday, would show that the overwhelming majority of the 116 clubs regulated by the IFR were operating with negative EBITDA - effectively meaning that their core operating expenses are greater than their total revenues.

Its analysis will reveal that 94% of clubs are lossmaking, according to the industry insider.

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The State of the Game report will also reinforce the deluge of money making its way from professional clubs to agents in the form of fees, with the figure for 2024-25 standing at £484m for the entire pyramid.

It is further expected to conclude that, based on its analysis, few clubs have the financial resources to survive for more than a brief period without their owners' support.

The report's publication will come at a critical time for English football.

As well as the turmoil caused by Manchester City having been found guilty of 115 charges of financial wrongdoing brought by the Premier League, the top flight and English Football League are locked in talks about a financial redistribution agreement known as the 'New Deal'.

Sky News revealed earlier this week that the two leagues and the IFR had met on Monday in a bid to thrash out an agreement prior to the State of the Game report's publication.

The EFL held a series of divisional meetings on Thursday, with the EFL board meeting on Friday to decide on its next steps.

Club executives have expressed scepticism that an agreement will be reached in the next few days.

The Premier League has indicated during recent discussions that it is prepared to offer £180m-a-year to EFL clubs in additional solidarity payments, although any increase from a £150m-a-year proposal tabled during the summer would require approval from top-flight clubs.

In addition to the additional annual payments from the Premier League, it is proposing a new 'lifeboat fund' for lower league clubs which find themselves in financial distress.

The package also features a reduction in the parachute payments made to clubs relegated from the Premier League, as well as a pot of money ring-fenced for infrastructure investment by the EFL's 72 clubs.

The new funding would be in addition to funds already invested by the Premier League in the wider English game.

Rick Parry, the EFL chairman, has proposed an alternative New Deal figure of £207m-a-year.

If the Premier League and EFL cannot reach agreement, the regulator would have to step in to use its backstop powers to impose a deal on both sides.

David Kogan, who chairs the IFR, has said that the use of its backstop powers would reflect "an utter failure" by English football's power-brokers.

"Going forward, it's to everyone's benefit for football to try to reach this understanding," he told an industry conference earlier this year.

However, the EFL could face having to wait a further protracted period before a deal is imposed, starving its clubs of the additional funding many say they are financially dependent upon.

The IFR declined to comment.

(c) Sky News 2026: Football watchdog to unveil levy proposals as report lays bare game's financial peril