THIS IS WORSE THAN ANYONE THOUGHT Explosive Evidence Suggests the EFL Crisis Could Destroy Clubs Overnight

The EFL is ‘broken’ – with clubs in the Championship on track to lose an average of £15million per season and those across the competition set to post annual losses of more than £600m, a Daily Mail Sport investigation can reveal.

Shock figures highlight the desperate state of play outside the promised land of the Premier League, with the staggering sums being lost each year laid bare. So far, 14 Championship clubs have filed their figures for 2024-25 and they paint a stark picture.

Of that group, 13 posted soaring average losses of £14m. That includes league leaders Coventry City (a £21m loss from a profit Oof £8.7m last year), Norwich City (£20.7m) and QPR (£20.1m). Preston North End, who have never played in the Premier League, lost £13.4m. Oxford United lost £17.5m, while Portsmouth lost £4.3m. Plymouth Argyle, relegated to League One, registered a £300,000 profit.

Stoke City, owned by the billionaire Coates family, would appear to be an anomaly. The Potteries club posted a ‘profit’ of £64m however, that only came on the back of their owners writing off a vast £90m loan.

League insiders believe the difference between revenues of the Premier League and Championship, which now stands at a cavernous £5.3bn, had led to irrational behaviour among some of those in charge who are grossly overspending in an increasingly desperate bid to reach the top flight – and that for the latest financial year, the 72 outside the top flight could record staggering combined losses of around £600m.

Today, in English football’s second tier, owners are routinely having to write cheques of around £14m simply to stand still – either loaning their club money or writing off losses altogether.

Sheffield Wednesday have been stuck in administration limbo for five months after Dejphon Chansiri’s tortured reign

Teams like Sunderland have spent big to escape the EFL – but those who don’t get there can end up in serious danger

The spectre of parachute payments, which see relegated sides handed around £100m over three years (should they not win promotion), are also playing a key role according to those within the industry. Between 2018-19 and 2024-25, revenue among Championship clubs rose from £21m to £27m. To those with parachute payments that figure went from £57m to £90m.

‘This is just not a level playing field,’ bemoans one exec. The issue is also exacerbated by a difference in player trading, with parachute clubs in 2023-24 having an average profit of £54m in the transfer market as opposed to £8m elsewhere. EFL bosses believe the payments are a ‘trampoline’ and ‘anti-competition’.

Wage inflation is also wreaking havoc. Kieran Maguire, the respected football finance expert, believes the average salary in the Championship last season was £14,000 a week, while in Leagues One and Two those numbers were an inflation-busting £3,900 and £2,000 a week.

Indeed, between 2018-19 and 2024-25, League One clubs saw revenue rise by just five per cent as wage costs more than tripled. There are now believed to be multiple players in the third tier making five-figure sums each week.

The average Championship wage bill for 2023-24 was £37m, although for parachute clubs it was £71m, and non-parachute clubs £28.2m. Other societal costs including rising energy bills and national insurance have also played a role.

Daily Mail Sport has spoken to executives across the three divisions to seek their views, with each speaking on the condition of anonymity. ‘The system is broken,’ says one Championship official. ‘My owner asked me what we could do to make our club sustainable. When I’d finished laughing I told them it was simple – we could get relegated and live within our means in League One. It’s like the Wild West out there, and the only people profiting are players and agents.’

University lecturer Maguire, of The Price of Football podcast, believes the logic among those who are grossly overspending is fairly simple. ‘It’s like you and I buying a lottery ticket,’ he explains. ‘But unlike you and I, you have a three in 24 chance of winning. There are wealthy individuals who are willing to pay the sums we are seeing to buy that lottery ticket.

‘Southampton stank the place out last season, finished bottom of the Premier League and pocketed £109m, whereas your average Championship side got around £11m.’

Maguire also believes there is a disparity within the EFL itself. ‘There have always been losses in Leagues One and Two and the TV gap is similar (as that between the Premier League and Championship).

‘Southampton stank the place out last season, finished bottom of the Premier League and still pocketed £109m (in top-flight prize money, TV money and other commercial revenue)’

Championship leaders Coventry City look set for promotion – but it’s just as well after they lost £21m last season

Norwich City, who have spent 10 seasons in the Premier League, lost £20.7m last season as they try to get back to the riches of the top flight

‘Clubs in the Championship get 80 per cent of the revenue and 12 per cent in League One – so you have a similar position with some of those in League One overspending to get to the Championship.’

Maguire points out that even the fifth-tier National League is not immune, with clubs desperate to punch their ticket to the EFL. ‘Stockport did £5m getting out of it,’ he says. ‘Wrexham won’t have been far off.’

It is a continued, sorry story in the third and fourth tiers. So far nine League One clubs have returned their figures for 2024-25, with losses averaging £8.23m. That is almost double the £4.2m average from the previous year. Relegated Cardiff City lost £35.1m, while Burton Albion posted a deficit of £8.1m and Wycombe lost £9.9m.

In League Two, 10 clubs have posted average losses of £2.44m. That is more than double the previous season’s £1.2m. Bristol Rovers’ number was £6.8m followed by Gillingham on £5.7m and Cambridge United with £3.7m.

When it comes to wages, the average staff costs from the six clubs to have declared is an astounding £13.42m, although that does include Cardiff’s second-tier numbers.

In League Two, six clubs have declared their staff costs with a scarcely-believable average so far of £7.08m. With Sheffield Wednesday now in administration and without a buyer after former owner Dejphon Chansiri refused to continue funding heavy losses, there are grave fears others could go the same way when their own owners get fed up with handing out eye-watering sums with little return.

Historic clubs, institutions of the game, whose very futures now lie directly in the hands of their owners. The influx of American owners at suddenly big-spending clubs such as Birmingham City and Wrexham may well be welcomed by their own fanbases, but the impact their investments have had on wage-spend is being felt elsewhere as others feel under pressure to keep up and to remain competitive.

All of this comes against the backdrop of a continued dispute between the EFL and the Premier League over financial redistribution, which may well see the newly appointed Independent Football Regulator step in. The argument among those in the Premier League is well quoted and fairly simple. Why should they hand over more money to owners who, in some cases, are wealthier than they are so those owners can then use that money to try and take their lucrative places at the top table?

The EFL would point to many of the statistics above. Their view is that all of the madness is being caused by a desperation to get to the promised land and that the promised land should do its bit to ensure the rest of football does not eat itself.

US ownership is rising in the EFL such as at Wrexham, owned by Hollywood’s Rob Mac (left) and Ryan Reynolds, and Birmingham – who count Tom Brady (right) among their investors

Clubs such as Luton Town have shot up through the leagues only for the bubble to burst rapidly and dramatically – the Hatters suffered back-to-back relegations after being in the top flight

The futures of historic clubs, institutions of the game, now lie directly in the hands of their owners

Much will depend on the reading of the situation from IFR chair and former chief Premier League rights negotiator David Kogan. Kogan was at the Premier League shareholder meeting last month, has been visiting clubs and was at the EFL annual summit at the Belfry in March, where clubs unsurprisingly voted to extend the Championship play-offs from four to six. Two more lottery tickets up for grabs.

Kogan has commenced work on his State of the Game Report, and the EFL will hope their arguments feature prominently in his final draft. Should an agreement on redistribution remain outstanding, he would have the power to force the issue via a backstop, but clues were thin on the ground according to those who were at the Belfry.

That said, a hint at an end to the war arrived at the Churchill Hotel last week where Premier League chief executive Richard Masters suggested to top-flight clubs at the latest shareholder meeting that they should aim to find an agreement in months, albeit without prejudicing their own position and ensuring it could not be used as a starting point ahead of a backstop. Perhaps the view now is that negotiation, rather than a forced deal, may be preferable.

For all of the above, the story in the EFL is not all doom and gloom. While financial performance is an indicator which cannot be ignored, other signs point to positivity. Record attendances were posted in 2023-24 and largely maintained last season on the back of a post-Covid boost, with numbers not seen since the post-War boom.

The Championship is the second most-watched league in Europe after the Premier League, ahead of the Bundesliga, La Liga and Serie A. The ‘basic award’ handed to clubs by the EFL has never been higher. With almost a third of clubs now owned by Americans, a growing US interest helped drive a broadcast deal with CBS, which airs more than 250 EFL matches across the Atlantic.

This week EFL officials are in Florida to see how they can grow further in the US. They will be buoyed by viewing figures attracted here for Hollywood pair Rob McElhenney and Ryan Reynolds’ watchalong on Sky for Wrexham v Swansea City which Daily Mail Sport understands attracted a total audience of 424,000 – a significant increase on average viewers for a Championship match.

Regardless, the feeling is that we are hurtling towards a tipping point and the concern is that those who keep paying millions for lottery tickets without tasting success will eventually decide to cut their losses, and take centuries of history with them on their way out of the door.

‘The backstop cannot come quick enough,’ says another exec. ‘It cannot carry on like this.’ In an op-ed published with this report today, EFL CEO Trevor Birch outlines the frightening reality of the situation. ‘The clock is ticking,’ he says.