Football Regulator Issues Stark Warning Over Relegation 'Death Sentence'
David Kogan, the chair of the Independent Football Regulator (IFR), has delivered a stark warning that relegation can act as a "death sentence" for English football clubs, primarily due to the severe financial disparities between divisions. He has urgently called upon the Premier League and the English Football League (EFL) to swiftly agree on a new financial settlement, emphasising that the "clock is ticking" for a resolution to be reached.
Systemic Financial Risks Across the Football Pyramid
Kogan highlighted widespread dissatisfaction with the existing 2019 deal, which continues to be rolled over without substantial reform. He cautioned that the IFR possesses backstop powers to intervene if the leagues fail to reach an agreement independently. However, he expressed a clear preference for football to find its own solutions to these deep-seated systemic issues, rather than relying on regulatory imposition.
His observations were shared at the Financial Times Business of Football Summit in London, preceding the IFR's first draft of a comprehensive 'State of the Game' review scheduled for later this year. Kogan painted a concerning picture of the sport's overall financial health, noting that the current system inherently bakes in significant risk.
Clubs on the Brink and Unsustainable Cliff Edges
"Multiple clubs throughout the pyramid have told us they would not be able to survive a month if their owner stopped funding," Kogan revealed. He added that while players' wages are "rocketing in the Premier League", this inflationary trend is also evident "across the pyramid", exacerbating financial pressures at all levels.
He elaborated on the devastating impact of demotion, stating: "Relegation, for many, is a near death sentence. Clubs facing relegation can see their revenues cut by up to 80 per cent if they fail to bounce back quickly, and the early analysis we've done suggests this is just as much of a problem between League Two and the National League as it is between the Premier League and the Championship."
Kogan stressed the unsustainability of the current model, noting: "The whole pyramid is facing a series of cliff edges that people talk about. They have not been addressed, and without better financial mitigation they are entirely unsustainable." He reiterated the regulator's core commitment: "We are there to regulate this, to protect the pyramid that English football has depended on now for over 160 years."
Stalled Talks and Regulatory Scrutiny
Talks for a 'New Deal' between the Premier League and the EFL have stalled, potentially paving the way for the regulator to impose a solution if formally requested. Kogan confirmed that the IFR would scrutinise key aspects such as "the current mechanism for parachute payments, the cliff edges and the other features of the existing deal," aligning precisely with its statutory mandate to enhance the long-term sustainability of the game.
When questioned specifically about the future of parachute payments—financial supports given to relegated clubs—Kogan indicated they would not disappear immediately. "Parachute payments are not going to vanish overnight," he said, adding that detailed discussions would take place, with concrete outcomes to be revealed in due course as part of the broader settlement negotiations.
