Regulator report to review parachute payments

English football's independent regulator (IFR) has confirmed 'parachute payments' to relegated clubs will be reviewed as part of "ground-breaking" analysis it is conducting into the men's professional game.

The watchdog has revealed the proposed scope of its State of the Game report that it claims will "shine a light on the financial pressures, governance gaps, and structural risks" facing the industry.

Due to be published in draft later this year, it will examine how money flows through the sport's top five tiers, and the strength of clubs' balance sheets.

The watchdog says it will be "the most in-depth assessment of the industry ever conducted".

Other areas it is set to cover include "cliff-edges" between leagues, club debt and liquidity, models of ownership, the broadcast landscape, and the impact of player wages and academy development on the financial sustainability of the game.

The report will consider the Premier League's controversial multi-million pound parachute payments that are given to relegated clubs over a three-year period.

The English Football League (EFL) believes the payments - worth tens of millions of pounds to relegated clubs - distort competition and has wanted them scrapped so it gets a greater share of the wealth generated by the top flight.

But the Premier League says the payments are essential to give club owners the confidence to invest.

The disagreement is among the reasons the two leagues have been unable to reach a new financial settlement that would see more money make its way down the football pyramid, despite years of negotiations and pressure from politicians.

The regulator will have 'backstop powers' to mediate a financial settlement if the Premier League and EFL continue to fail to reach an agreement, with the findings of the State of the Game report helping it to form a view on how much the Premier League should redistribute.

David Kogan, chair of the independent football regulator, said: "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 be able to use statutory powers to access information from clubs and competition organisers.

The State of the Game's terms of reference will be subject to a four-week consultation, with a final report set to be published in 2027.

It will also examine Equality, Diversity, and Inclusion (EDI), fan engagement and heritage, including a review of existing protections for club stadiums, crests and colours.

However, ticket prices and the video assistant referee (VAR) system are outside of its scope.