Football regulator: EFL, National League clubs must hold financial reserves

EFL and National League clubs will be compelled to hold financial reserves relative to their level of risk by the Independent Football Regulator (IFR).

Clubs deemed to be at high risk of running into financial difficulty by the IFR will be required to hold the equivalent of five months' operating losses in reserve, dropping to two months for those deemed medium risk.

Low-risk clubs will be required to hold one month's wages, the IFR said, as it opened a six-week consultation on reserves on Tuesday. There will be no fixed requirement on Premier League clubs, the IFR said, but they will be assessed on a case-by-case basis.

The IFR's "State of the Game" report published last month found 94% of clubs in the top five English leagues were loss-making, despite generating revenue of £9 billion last season.

IFR chair David Kogan wrote in the report's foreword that the English game was "standing on the edge of financial disaster." 

The reserves requirement will be phased in over a three-year period starting in June 2027, with clubs expected to hold the appropriate reserves by 2030 in order to meet licensing requirements.

The requirement is one part of a three-year 'supervision strategy' which will cover all financial, non-financial and heritage requirements in order to be licensed by the regulator from 2030.

IFR chief executive Richard Monks said: "The State of the Game report revealed just how serious the financial issues have become at some of our clubs. It has shown there is an urgent need to take action.

"Today we have set out how we plan to work with clubs to establish a more resilient financial base and to reduce their exposure.

"Our approach is proportionate to the financial risk and builds in a long lead time for clubs to enable them to stabilise their finances over the next three years."