Investing in a football stadium can be the difference between sinking and swimming and the government must play a role, writes Joseph Smith.

It is fair to say that the Independent Football Regulator’s draft State of the Game report provides the most comprehensive analysis of English football’s finances to date. Published last week and open for consultation until the end of the year, it highlights that while English football is both highly competitive and wealthy it faces significant financial risk.

The report’s key findings? That 94 per cent of clubs in the top five divisions – from the Premier League down to the National League – operated at a loss, and that two thirds could not survive 90 days without additional funding from existing owners. Nearly 20 EFL and National League clubs reported non-player operating cost figures that were higher than their total revenues.

The regulator was established because parliament determined that football clubs are not ordinary businesses. Since a club cannot be easily replaced if it fails, the Football Governance Act imposes a level of scrutiny uncommon in most industries.

The long-standing debate

Debate has long focused on television revenue – which for the Premier League is into the billions – including redistribution and parachute payments from the top flight. However, the regulator highlights that matchday income becomes increasingly important further down the league pyramid. In the top division it represented 14 per cent of revenue but that rises to 19 per cent in the Championship and 35 per cent in Leagues One and Two.

Matchday income is therefore essential, and stadium improvements can be a direct way to achieve this. Larger stadiums allow for more ticket sales where demand exists, and enhanced facilities support higher-value matchday and commercial activities – tiers of premium seating have been a popular addition to many stadiums over the last decade. The regulator concludes that investment in stadiums and infrastructure has significantly increased revenue for the largest clubs.

Premier League clubs benefit from higher ticket prices, stronger demand and corporate hospitality, and invested £2.2bn in infrastructure between 2021/22 and 2024/25. By contrast, League Two clubs invested only £16m. Large clubs can also manage delays and rising costs, while smaller clubs have limited capacity to do so.

Stadium investment key

Luton Town is an example of this; the club announced plans to move from Kenilworth Road to Power Court in 2016 but since then the club has moved between divisions while the stadium project faced planning, legal and design hurdles. For smaller clubs such delays could be the difference between spades in the ground and nothing at all.

The government must therefore step up and reduce some of the planning, transport, land and infrastructure barriers that hinder private investment. The Stadium Regeneration Accelerator announced earlier this year will offer a clear incentive to focus on the largest projects. But the true measure of the initiative is whether government involvement enables projects to go ahead that otherwise would not.

Stadium investment is part of the solution to a problem that plagues most of the sport. The government should continue supporting major regeneration schemes that create housing, jobs and investment, but the opportunity extends further. The true value of the Stadium Regeneration Accelerator lies in helping viable projects lower down the pyramid overcome barriers that clubs cannot address alone. This would not only support regeneration around football grounds but also help vulnerable clubs build stronger businesses.