English men’s football club losses reduce to £0.8bn as the Premier League pulls away from the pyramid

The third annual analysis of English men’s football by LCP’s Sport Analytics and Advisory practice “The Premier League de-couples from the pyramid?” shows that overall losses fell to £0.8bn in the 2023–24 season, but rose in the Championship and the rest of the EFL and National League. There were strong signs of a growing ‘de-coupling’ of the Premier League from the rest of the football pyramid.

The LCP team analysed the finances and sporting success of the 92 clubs in the Premier League, Championship and Leagues One and Two, plus, for the first time, all 24 National League clubs which are now under the supervision of the new Independent Football Regulator (IFR).

Overall, men’s football is thriving in many ways, with full stadiums in the Premier League, rising revenues and strong fan interest across the pyramid. Still, however, the IFR faces serious challenges as financial pressures continue to build, particularly below the Premier League.

Key highlights:

• Revenues grew by 7% to £7.7bn, although the Premier League’s share fell slightly from 86% to 83%, partly due to changes in club mix.
• 84% of clubs reported losses, with total losses in 2023–24 (£0.8bn) significantly lower than in 2022–23 (£1.2bn).
• Losses fell sharply in the Premier League but rose across the EFL and National League, with Championship clubs (£369m) recording higher combined losses than the Premier League (£260m) for the first time since LCP’s analysis began.
• Premier League clubs overall lost 4% of total revenues (down from 12% for the previous year), whereas for the Championship this loss ratio was 38% and for League One 68%.
• In the Premier League, wages as a proportion of revenues continued to fall, but for Championship and League One clubs, they remained unsustainably high at around 90%.
• 74% of clubs disclose in their accounts either a material uncertainty about their ability to continue operating over the next 12 months (13 clubs) or a dependence on discretionary owner funding to meet their obligations (73 clubs).
• 30 regulated clubs (25% of the total) did not have their accounts audited: these included 4 League One clubs, 7 League Two clubs and 19 in the National League.

LCP experts see the Premier League increasingly pulling away from the rest of the pyramid in terms of financial outlook. Premier League losses have narrowed, as PSR and UEFA salary-cap rules have curbed spending, and player wages have remained below 70% of revenues for many years.

Lower down, however, the picture is more concerning. Average annual losses per club stand at £15m in the Championship, £5m in League One, more than £2m in League Two and £1m in the National League, with wage-to-revenue ratios at 91% and 87% in the top two EFL tiers.

There are still positives. LCP notes continued interest from new owners, especially from the US. Many recent protracted sales at clubs such as Reading, Morecambe and Sheffield Wednesday reflected unrealistic seller expectations rather than a lack of prospective buyers.

However, with lower league losses mounting, LCP warns there is a risk that the market may soon reach a tipping point. Buyer demand risks falling behind the number of clubs for sale, which could leave many smaller, community-rooted clubs exposed to serious financial strain.

Taking wage-to-revenue ratios, debt exposure and liquidity into account, alongside each club’s sporting achievements, LCP’s Sustainability Matrix showed the clubs with the weakest financial scores by league for the period under review were:

At the other end, the clubs with the strongest financial performance (top three in each league) are:

The Regulator’s main levers to support financial sustainability are its oversight of licensing rules, including the new Owners, Directors and Senior Executives regime, and its role in shaping the Premier League revenue distribution to the rest of the pyramid.

LCP recommends the IFR:

• Requires clubs to provide greater security against projected future losses through either liquid assets or legally binding guarantees/contingent assets
• Ringfences part of any additional distributed funds from the Premier League down the pyramid to support longer-term stability in areas such as:
  • Football infrastructure, including stadiums, training facilities and academies
  • Operational infrastructure and commercial systems
  • Social impact initiatives such as fan engagement, inclusion programmes, women’s teams and environmental sustainability
  • Paying off debt
• Consider making it a requirement for clubs to have their accounts audited. This should reduce the risk of financial mismanagement (accidental or deliberate) going unnoticed until it becomes a major problem.

Bart Huby, Partner and Head of Sports Analytics and Advisory, commented:

“This report comes at a pivotal time for the men’s game in England. With the Independent Football Regulator now responsible for safeguarding the financial health of 116 clubs across the top five tiers, the challenges it faces are substantial.

“The widening gap between the Premier League and the rest of the pyramid, combined with increasing reliance on wealthy owners, shows why effective regulation is crucial. The warnings set out in the Fan-Led Review remain just as relevant today, and how the Regulator responds will shape the future of the men’s game.”

Aaryaman Banerji, Head of Football Governance, added:

“English football is one of this country’s most successful and recognisable global assets. Whilst the game continues in many ways to thrive, many clubs, particularly those lower down the pyramid, face systemic pressures.

“With these points in mind, it is crucial that we find a solution that protects the financial and cultural framework in which men’s football operates. The IFR has a critical opportunity to strengthen the game’s long-term resilience at a moment when the risks are particularly stark.”