IFR Licensing Regime set to pull clubs back from 'Cliff Edge'
Date Published
- IFR licensing plans focus on financial reality not accounting presentation
- Regime will deliver for fans by protecting club finances and heritage
- Corporate Governance, EDI and Fan Consultation reporting required as part of proposed licensing conditions.
England’s leading clubs will need to demonstrate they can withstand major financial shocks as part of new licensing requirements, the Independent Football Regulator has announced.
The requirement is part of the IFR’s new licensing regime which will underpin the regulator’s core mission: to build a stronger and more financially sustainable game for fans and clubs in the top five divisions of English men’s football.
Clubs must also report publicly on their corporate governance, fan engagement activities and equality, diversity and inclusion commitments. If they fail to meet the IFR’s new licensing standards, clubs could then be required to take on additional measures to improve standards.
IFR CEO Richard Monks said:
“It cannot be right that so many clubs exist on a cliff edge where one change could threaten their entire existence – fans should be debating formations not finances.
“Our licensing regime will ensure that club risk is managed appropriately, creating a more stable environment for growth and investment.
“The IFR will work with clubs and support them to meet the licensing requirements which are absolutely essential to our mission to change English football for good.”
The IFR will require all 116 regulated clubs to hold ‘appropriate financial resources’ in order to achieve a full licence.
This means clubs must have sufficient resources to meet their financial commitments and withstand stresses such as relegation, withdrawal of owner funding or other income shocks. The IFR will adapt to the levels of risk we see at each club on a case-by-case basis. The higher the risk, the greater the requirements from us. The lower the risk, the lower the demands.
The IFR’s regulatory regime will focus on financial reality not accounting presentation, including the amount of cash the club will be required to hold.
If the IFR believes a club is at risk of failing to meet the necessary requirements, the regulator may impose specific licence conditions to get clubs back on track. Depending on the risk posed, this may require clubs holding a sufficient level of liquidity, reducing expenditure, or restructuring debt.
Compliance with Premier League, EFL or National League rules will not automatically mean that clubs meet the appropriate financial resources requirements of the IFR.
Club liquidity will be monitored on an ongoing basis by the IFR. Football players will not be counted as liquid assets as clubs cannot readily realise their value outside transfer windows.
Clubs will be required to regularly report to the IFR to demonstrate how they are meeting the Club Corporate Governance Code, including on Equality, Diversity and Inclusion.
The IFR regime will be risk based and the organisation will work with clubs to give them sufficient time and support to adapt to the new licence requirements. Clubs must provide detailed sources of funding information to the IFR as well as how their organisation is structured as part of the proposed licensing regime.
Clubs, fans and competition owners, as well as interested third parties are invited to take part in the consultation process which will run for seven weeks.
Notes to editors:
- Previous consultations on the IFR’s licensing regime can be found here.
- A provisional licensing pilot EoI has been shared with clubs and will commence in later this year. Provisional licensing will begin from the 2027/28 season.
- To comply with a full licence, clubs must show evidence of having appropriate financial resources, appropriate non-financial resources and having meaningfully consulted with fans, through the submission of full financial plans, corporate governance statements and publication of the Club Code and Annual Fan Consultation Report.
- The IFR considers liquid assets as those assets held by the club that can be converted into cash almost immediately and without significant loss of value. This does not include football players.