Football's New Regulator Will Cost £20.3m a Year. Who Pays?

Eighty-five per cent from twenty clubs

The Independent Football Regulator published its proposed funding arrangements on 23 October, setting out how English football will pay for its own watchdog from the 2027/28 season. The headline requirement is £20.3m a year, replacing the government funding that has supported the regulator since its establishment under the Football Governance Act 2025, which permits licensed clubs to be required to finance it through a levy.

The more revealing figure sits beneath the total. The regulator expects Premier League clubs to meet approximately 85% of its annual costs, which on a £20.3m requirement amounts to something in the region of £17.3m. Twenty clubs would therefore fund roughly five-sixths of a body whose remit covers 116, with the ninety-six clubs across the Championship, League One, League Two and the National League sharing the balance.

That is a deliberate design rather than an accident of the formula. The regulator's chief executive, Richard Monks, has said most clubs would pay around 0.1% of annual revenue, and the regulator says no club would pay more than 0.5%. Charging every club the same amount would have produced a levy of roughly £175,000 each, which would be immaterial to a Premier League club and ruinous to a National League one. Allocating by financial capacity is the only workable approach, and it produces a distribution in which the division generating the overwhelming majority of English football's revenue also pays the overwhelming majority of the cost of overseeing it.

It also means the regulator's independence rests on a particular arrangement: the body charged with scrutinising Premier League clubs, and with backstop powers over how the Premier League distributes its money, will be funded almost entirely by those clubs. That is not unusual among statutory regulators, which are commonly financed by the industries they supervise. But it is worth stating plainly, because it is the structural fact the levy creates.

What clubs would pay

The consultation sets out illustrative annual charges across the five regulated divisions.

These are illustrations rather than tariffs. The regulator says actual invoices will be calculated using the latest available financial information as at August 2027, so a club's eventual charge will depend on its position then rather than on the figures published this week. The published numbers are useful for understanding the shape of the model, not for budgeting.

The spread is the point. A £1.8m charge is around three thousand times a National League club's contribution, and the gap between the top of the Premier League and the bottom of the regulated pyramid is wider still once the lowest charges are taken into account. For a club with revenues in the hundreds of millions, £1.8m is a line item. For a National League club operating on a fraction of that, with limited cash reserves and often a single principal funder, even a few hundred pounds is a figure that has to be found.

A budget that has roughly doubled

The proposed total is substantially above what was envisaged when the regulator was created. Earlier government assessments put annual operating costs at around £10m. The regulator is now proposing £18.3m for operations alone, with the full requirement at £20.3m — roughly double the original estimate, and the element of the announcement most likely to attract objection during the consultation.

Nor is £20.3m a standing figure. The requirement rises to £20.9m in 2028/29, which reflects both the escalating recovery of establishment costs and the regulator's expectation that its licensing regime will be more fully operational. Clubs assessing the long-term cost should treat the first-year number as a starting point rather than a ceiling.

The regulator argues the cost is modest in proportion to the industry, putting the levy at about 0.2% of the £9bn in annual revenue English football generates. It has also compared its budget with the administrative expenditure of football's existing competition organisers, citing Premier League administrative expenses of more than £200m in 2024/25 and EFL administrative expenses of approximately £35m.

That comparison is doing less work than it appears to, and it reportedly irritated the Premier League. The league employs more than three times the regulator's staff and generates in excess of £4bn a year, and its administrative expenses cover operating the competition, commercial and broadcasting arrangements, investment in the game's growth and its own legal costs. None of those are the functions of an independent statutory regulator. The figures establish that £20.3m is small relative to what football already spends administering itself; they do not establish that it is the right price for regulation.

The regulator plans to employ approximately 100 people, based principally at a Manchester headquarters with a satellite office in London, to operate a licensing system, assess the suitability of owners and directors, monitor financial sustainability, protect specified elements of club heritage and exercise statutory powers where required. It has already reported conducting advanced suitability checks on 40 owners, directors and senior executives, and publishing ten consultations with associated rules or guidance.

Establishment costs and the litigation provision

Two of the three components of the levy are not operating expenditure at all, and both deserve separate attention.

The first is the recovery of what it cost to establish the regulator before clubs began funding it. That expenditure has been reported at approximately £45m, and the consultation proposes recovering it gradually rather than in a single charge: £1m in the first levy year and £2m in the second, leaving roughly £42m to be recovered over the following years. Those later amounts are approximate and subject to the final recovery schedule, which the consultation itself is partly about. The important point for clubs is that the £1m appearing in the 2027/28 levy is the smallest instalment of a much larger historical bill, and the establishment element of the charge is scheduled to grow.

The second is a £1m contribution towards reserves for potential litigation. Regulatory decisions can be challenged, and a body making licensing determinations and suitability assessments about wealthy and well-advised clubs should expect some of them to be contested. The regulator has said it would pursue legal action only where advice indicated it would succeed.

What happens if litigation costs exceed the provision is the more interesting mechanism. The regulator has indicated that exceptional legal costs could be met initially by government funding and recovered from clubs through future levies. Contemporary reporting has raised the scale of the Manchester City proceedings as an illustration of what football litigation can cost — those proceedings are a Premier League matter rather than the regulator's own, and nothing in the levy consultation establishes a liability arising from them, but the comparison explains why a £1m reserve may prove conservative. A single substantial challenge could exceed it, and the cost would ultimately fall on clubs in a later year rather than disappearing.

Why the largest clubs pay most

The levy is not determined by division alone, which is what produces the range within the Premier League itself.

Alongside central distribution income, the consultation is reported to propose additional charges for three categories: clubs participating in UEFA or FIFA competitions, clubs receiving Premier League parachute payments, and clubs generating commercial revenue above a £150m threshold. The effect is to separate clubs that share a division but not a financial position.

The parachute-payment adjustment is the clearest example. A Championship club receiving parachute payments takes substantially larger central distributions than a divisional rival that does not, and the proposed levy reflects that rather than treating the Championship as a single category — which is why the £45,000 illustrative figure is specified as applying to clubs without those payments.

The commercial-revenue threshold does similar work at the top. The difference between the Premier League's largest commercial operations and its smallest is considerable, and a flat top-flight charge would ignore it. There is a certain symmetry in the result: the revenue disparities the regulator documented in its State of the Game report are now being used to decide who funds the regulator itself.

It is worth being clear about what the levy is not. It is a cost-recovery mechanism, not a redistribution tool. The money collected funds the regulator rather than moving between clubs, and nothing in the allocation formula transfers resources from the Premier League to the EFL. But the formula still embodies a judgement about relative capacity to pay, and that judgement rests on the same evidence base as the regulator's substantive findings.

A regulator funded by loss-making clubs

The levy proposal follows the regulator's first State of the Game report, published on 13 October, which set out an uncomfortable assessment of the finances it will now be funded to oversee.

The report found that 94% of clubs across the regulated pyramid were loss-making in 2025/26, with total losses of £1.7bn. Twenty-nine per cent said they could not operate for more than thirty days without further owner funding, and 66% said they would struggle beyond three months. Seventeen EFL and National League clubs had non-player operating costs exceeding their total income, meaning they would have been loss-making before paying a single player.

The report also found that 63% of EFL and National League clubs had liabilities exceeding the book value of their assets. That finding is sometimes described as technical insolvency, and the description requires care: negative shareholders' funds do not establish that a club cannot meet its debts as they fall due. A club with reliable financing and sufficient liquidity can trade normally with negative net assets, and in football a substantial proportion of those liabilities often represents shareholder loans rather than third-party debt. What the finding does establish is that most clubs below the Premier League have little balance-sheet capacity to absorb a shock.

Against that backdrop, affordability is a reasonable test of the levy, and the regulator's answer is the allocation itself. A National League club paying under £600 and a League Two club paying around £6,000 are being asked for amounts that are small relative to the charges at the top. The design acknowledges that clubs dependent on owner funding to cover recurring losses should not finance regulatory oversight on the same terms as clubs receiving Premier League broadcasting income.

That does not entirely dispose of the question. The regulator will be collecting money from an industry in which most clubs lose money and a majority below the top flight have negative net assets. The case for it is that effective oversight reduces the frequency and severity of financial failure, which would be worth considerably more to those clubs than the levy costs them. Whether that holds will depend on how well the regulator performs, which is precisely what cannot be assessed before it has done the job.

What happens next

The consultation opened on 23 October and closes at 5pm on Friday 4 December 2026, a six-week window covering two distinct questions: how the overall levy should be divided between clubs, and how the regulator should calculate its costs, reserves and recovery of establishment expenditure.

Final levy rules are expected in 2027, with clubs paying from the 2027/28 season and invoices anticipated from August 2027. Until then every divisional figure published this week remains illustrative.

The regulator's first significant financial decision is therefore about its own funding, and it has proposed a model in which the wealthiest clubs pay substantially more than the rest. The harder part of the consultation is not whether that principle is right — it plainly is — but whether a budget roughly twice the size originally envisaged can be explained in terms of what the regulator will actually do, and how its costs will be controlled once licensing is fully running.

The Bottom Line

The Independent Football Regulator is proposing a £20.3m annual levy to oversee an industry generating around £9bn, and it expects twenty Premier League clubs to fund roughly £17.3m of it. At the other end of its remit, National League clubs would pay under £600 each.

That allocation is the right way round. Regulatory costs should follow financial capacity, and a flat charge across 116 clubs would have been indefensible given what the regulator's own report says about finances below the Premier League.

The open question is the total rather than the split. A budget roughly twice the size originally estimated, funded by an industry in which 94% of clubs lose money, requires a clearer account of what the money buys than a comparison with the Premier League's administrative expenses provides. The consultation closes on 4 December, and it is the first real test of whether a body created to improve financial accountability can demonstrate it about itself.