David Kogan, the new independent regulator for English football, has warned that relegation can constitute a “death sentence” for clubs, urging the Premier League and Football League to reach a new financial agreement.
Speaking at the Financial Times Business of Football Summit in London, Kogan highlighted the urgent need for a fresh deal, noting that the current 2019 agreement is being rolled over to “no-one’s satisfaction.” He warned that in the absence of an agreement, the regulator could intervene, though he prefers that the leagues find their own solution.
Kogan emphasized that the vast revenue gap between the Premier League and the second-tier Championship encourages clubs to take financial risks to either reach the top flight or maintain their position. He also raised concerns over parachute payments, which give relegated clubs a cash injection that may provide an advantage over Championship rivals.
“The current system bakes in risk. Multiple clubs throughout the pyramid have told us they would not be able to survive a month if their owner stopped funding,” Kogan said. He added that soaring player wages are affecting clubs across all divisions, not just the Premier League.
He warned that relegation can reduce a club’s revenues by up to 80 percent if they fail to bounce back quickly, and early analysis shows the same risk exists between League Two and the National League. “The whole pyramid is facing a series of cliff edges. The clock is ticking,” Kogan said.
Addressing parachute payments specifically, Kogan acknowledged they are not going to disappear overnight but said discussions on reform are expected in due course.
His remarks underline the precarious financial state of English football clubs outside the top flight and signal potential regulatory intervention if the leagues fail to modernize their financial structures.
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