The IFR approach to regulating club finances in English football becomes clearer

The plans are set out in its consultation on the new licensing regime, which the IFR intends to put into operation during the 2026-27 season. The consultation is open until 8 December 2025, giving clubs a valuable opportunity to provide feedback on any concerns they have with the IFR approach, before the IFR undertakes further work on its rules and guidance in early 2026.

To assist clubs in preparing for their first licence application to the IFR, Pinsent Masons has developed Know The Score – a free to use self-assessment tool for football clubs. The tool produces a tailored report summarising a club’s current state of readiness, enabling it to identify where to focus efforts in this preparatory period.

The legislative framework for IFR regulation

The Football Governance Act 2025 (FGA) provides the framework laying down the ground rules for how the IFR operates and how it should regulate club finances. It sets the IFR an objective of promoting the “financial soundness” of clubs, and outlines the process for regulation by way of clubs securing a licence from the IFR to operate. All clubs will be subject to standard mandatory licence conditions, and the IFR may in addition impose discretionary licence conditions on a club, tailored to its circumstances, impacting on how it must manage its finances.

The IFR’s role does not displace league rules relating to club finances, which may still apply – as long as they do not conflict with IFR requirements. This includes the new financial regulations that Premier League clubs voted in favour of last month, which are due to come into force next season. This means there is some overlap and duplication in the reporting obligations that clubs face, and they will expect to see the IFR and leagues working together to minimise the burden of this.

Within the FGA’s framework, the IFR has a wide discretion to decide how it should go about regulating club finances, on matters such as what details clubs will need to include in the papers they submit to the IFR, and how strongly or frequently the IFR will intervene in a club’s affairs. It is these issues which the IFR has now clarified, with the principles that will guide its regulatory approach.

The IFR principles of financial regulation

To supplement its overarching objectives and regulatory principles set out in the FGA, the IFR has set out five principles that will govern its approach to financial regulation:

• Mandating forward-looking risk management by clubs;
• Club boards remaining responsible for managing a club’s financial soundness;
• Interventions tailored to specific risks - not a ‘one-size-fits-all’ approach;
• Working with clubs to help them meet IFR expectations;
• Mandating financial reporting that helps clubs manage their own risks.

In its consultation paper, the IFR goes on to describe what these principles will mean in practice for the way it will regulate clubs, as summarised below.

The regulatory relationship with clubs

The IFR emphasises that it will be a “supervision-led regulator” – seeking to influence clubs through informal, constructive dialogue, and only intervening through use of its statutory powers where that does not achieve the desired outcomes. To support this, every club will have a named supervisor in the IFR as its regular point of contact.

Some clubs may have legitimate concerns that this will reveal commercially damaging information and will welcome that the IFR has confirmed it will give them the opportunity to first make representations about any sensitive information that they consider should not be made public. This issue often arises with other regulators, and clubs may wish to take swift legal action in some cases, if they feel the IFR is not taking the necessary steps to protect their commercially sensitive information.

Financial reporting

The FGA requires each club to submit to the IFR a strategic business plan for the period up to the end of the next season after the club makes its licence application, together with a financial plan. The IFR has now given more detail on the risk assessments that it will require clubs to carry out and report on in their financial plans.

Each club will need to stress-test their financial forecasts against potential adverse scenarios that could arise, and describe their mitigation plans for responding to them. All clubs will need to address three key risks as a minimum:

• Relegation – financial impact of relegation to a lower division;
• Withdrawal of owner funding – impact of loss of financial support from a principal owner;
• Significant revenue shock – impact of sudden reduction in turnover, such as reduced broadcasting revenue.

This could pose some difficult questions for the large number of clubs that operate at a loss and are heavily dependent on broadcasting revenue and/or the financial support of a generous owner for their survival.

Risk-based approach

The IFR has emphasised that its interventions will be focussed on clubs considered most at risk, as regards their financial sustainability. It will focus on two core factors in identifying clubs at risk: their source of funding, and their cashflow situation.

On a club’s source of funding, the IFR will look to assess if the source is reliable and stable; concentrated in coming from one or two providers; and whether it can readily be replaced if that source of funding is withdrawn. So, if a club is reliant on an unpredictable flow of income from a single owner which could not be easily replaced if that owner were to withdraw, then the IFR is likely to intervene to require the club to take steps to reduce its exposure to financial risk.

On cashflow, the IFR will require clubs to demonstrate they have sufficient access to cash resources to meet their cashflow needs – and provide stress-tested cashflow forecasts that demonstrate they are able to maintain short-term cashflow. If the IFR is not satisfied that a club has sufficiently robust cashflow plans in place, it is likely to intervene and require a club to hold a minimum cash reserve as a liquidity buffer, and/or reduce its debt or expenditure.

Next steps on the IFR licensing regime

The IFR has stated that its next step after this consultation will be to prepare a second consultation for spring 2026. This will provide further detail by way of draft rules and statutory guidance on the licensing regime, including templates for clubs to use for their licence applications and financial plans.

It then intends to publish the final rules and guidance on the licensing regime in summer 2026. The IFR will open its application window for clubs to submit their first license applications from November 2026, and no later than February 2027. Clubs will need to have secured their provisional licence from the IFR before the start of the 2027/28 season to operate a team in one of the top five tiers of English football in that season.