English football’s independent regulator (IFR) has confirmed it will review parachute payments to relegated Premier League clubs as part of a major State of the Game report examining the structure, finances, and governance of the men’s professional game. The report is described as a “ground-breaking” analysis and is due to be published in draft later this year, with a final version expected in 2027.
Championship sides Leicester and Southampton have been relegated from the Premier League twice in the past three seasons – and both gained promotion straight back in 2023-24. Photo credit: Getty Images.

Scope of the State of the Game Report

The IFR says the report will be the most in-depth assessment of English football ever conducted, examining:

• Financial flows across the top five tiers
• Club balance sheets, liquidity, and debt
• Ownership models and governance
• Broadcast revenues and distribution
• Impact of player wages, academy systems, and talent development
• Cliff-edges between leagues, which can threaten club stability

The regulator will also consider Equality, Diversity, and Inclusion (EDI), fan engagement, and club heritage, including protections for stadiums, crests, and colours. However, ticket pricing and VAR will not fall within the report’s remit.

Parachute Payments Under Scrutiny

A central focus of the review will be the Premier League’s multi-million-pound parachute payments, distributed to clubs relegated from the top flight over three years. These payments are worth tens of millions of pounds per club and have long been a source of controversy.

The English Football League (EFL) argues the payments distort competition in the Championship and have campaigned for them to be scrapped, hoping to redirect more funds down the football pyramid. In contrast, the Premier League maintains that parachute payments are essential to give club owners the confidence to invest, ensuring financial stability even after relegation.

The disagreement has contributed to the failure of the Premier League and EFL to reach a new financial settlement, despite years of negotiations and political pressure. The IFR will use its backstop powers to mediate if no agreement is reached, with the findings of the State of the Game report guiding potential redistribution of Premier League wealth.

Powers and Consultation

David Kogan, chair of the IFR, emphasized the significance of the review:

“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 have statutory powers to access financial and operational data from clubs and competition organisers. The terms of reference for the report will undergo a four-week consultation, allowing stakeholders, including clubs, fans, and leagues, to provide input before publication.

Wider Context: Stabilizing the Game

The review forms part of the IFR’s broader mission to strengthen the financial sustainability, governance, and competitive balance of English football. By providing a clear picture of how money flows through the sport, the regulator aims to ensure clubs can operate safely while maintaining competitive integrity, supporting fan engagement, and protecting football’s heritage.