English football’s finances are facing their most detailed examination to date. The Independent Football Regulator’s draft State of the Game report, open for consultation until the end of the year, found that 94% of clubs across the top five divisions operated at a loss and that two thirds could not survive 90 days without continued funding from their existing owners. The findings have sharpened a long-running debate about how clubs can build more durable businesses.

Attention is turning to the revenue clubs control most directly. Joseph Smith, a senior consultant at Henham Strategy, argues that matchday income has become the decisive growth driver for clubs outside the top flight and that stadium development is the fastest way to expand it. His intervention coincides with a government programme designed to accelerate regeneration around football grounds.

A report that reframed the debate

Clubs are not ordinary businesses

The regulator was established because parliament determined that football clubs are not ordinary businesses. A club that fails cannot easily be replaced, and the community built around it loses something no balance sheet captures. The Football Governance Act therefore imposes a level of scrutiny uncommon in most industries, and the draft report is its first full accounting of where the money actually goes.

That scrutiny has revealed how thin the margins are. Nearly 20 EFL and National League clubs reported non-player operating costs higher than their total revenues, a position few businesses could sustain for long. The report describes an English game that is simultaneously wealthy and exposed, with risk concentrated in the lower reaches of the pyramid.

Where the money comes from

Television income has long dominated the debate, particularly redistribution and parachute payments at the top of the game. The regulator’s analysis shows that matchday income matters more the further down the pyramid a club sits. In the Premier League it represented 14% of revenue, but the figure rises to 19% in the Championship and 35% in Leagues One and Two.

For clubs outside the top flight, the turnstile is therefore a core commercial asset rather than a supplement. Capacity, facilities and premium seating all feed directly into the revenue base, and tiers of hospitality have become popular additions to grounds over the past decade. The state of a club’s stadium has become a fair proxy for the state of its business.

The widening investment gap

Premier League scale against League Two caution

The sums involved in infrastructure differ by orders of magnitude. Premier League clubs invested £2.2 billion in infrastructure between the 2021/22 and 2024/25 seasons, supported by higher ticket prices, strong demand and corporate hospitality. League Two clubs invested just £16 million over the same period, a gap that compounds with every season.

Larger clubs can also absorb the delays and cost rises that routinely affect construction projects. Smaller clubs have no such cushion, and a stalled scheme can mean the difference between spades in the ground and nothing at all. The regulator concludes that stadium investment has significantly increased revenue for the largest clubs, reinforcing the divide between divisions.

Lessons from Luton Town’s long wait

Luton Town illustrates the problem. The club announced plans to move from Kenilworth Road to the Power Court development in 2016, and the project has faced planning, legal and design hurdles ever since. In the same period the club itself has moved between divisions, a reminder that results on the pitch rarely wait for paperwork off it.

For a smaller club, such delays could prove decisive. Smith argues that government involvement is the practical way for projects lower down the pyramid to overcome barriers that clubs cannot address alone.

The case for government action

What the Stadium Regeneration Accelerator must deliver

The Stadium Regeneration Accelerator, announced earlier this year, offers a clear incentive to focus on the largest projects. Ministers are already supporting major regeneration schemes that create housing, jobs and investment around football grounds. On Smith’s argument, the true test of the initiative is whether it enables projects that would otherwise never leave the drawing board.

Success would be measured not only in headline schemes but in viable clubs given room to grow. Support that reaches projects lower down the pyramid would strengthen club businesses while anchoring wider renewal, bringing homes, employment and private capital to areas that have often waited decades for investment. With the regulator’s consultation open until the end of the year, the opportunity is there for policy to keep pace with the ambition of the clubs and communities involved.