Financial rules were meant to protect clubs, yet crises at Derby County, Reading and Wigan Athletic show how fans are still paying the price for owners’ decisions.
The English game has never had more money, yet too many EFL clubs remain 1 bad owner, 1 bad season, or 1 failed gamble from chaos. Supporters see points deductions, embargoes and fire sales arrive after the damage is done, while the people who made the calls often move on.
With an Independent Football Regulator on the way, this is the moment to turn reactive punishment into proactive protection.
What is broken in the current system
Derby County became the emblem of how Profitability and Sustainability can bite late. Under former owner Mel Morris, the stadium, Pride Park, was sold to a company he controlled, a move that drew scrutiny and later legal wrangles.
When administration finally came, the sanction was a 21-point penalty in the Championship, a punishment that fell on the team and the fans. The individuals who shaped the risk profile were not the ones docked points on a Saturday afternoon.
Reading was taken over by Dai Yongge in 2017. The Royals lived through a cycle of heavy losses, spending beyond revenues and repeated EFL interventions. Embargoes, business plan requirements and points penalties arrived after the club had already crossed the line. The feeling among supporters has been clear for years: sanctions land on the badge, not on the boardroom where decisions were made.
Club statement | EFL confirm points deduction penalty 📰
We can confirm that we have accepted the penalty of a six point deduction as a result of exceeding the EFL’s Profit and Sustainability limits.
Read the full statement here 👉
— Reading FC (@ReadingFC) November 17, 2021
Few stories illustrate fragility like Wigan Athletic. The club lurched through ownership changes, unpaid wages and multiple points deductions. Under the group fronted by Talal Al Hammad and backed by Abdulrahman Al-Jasmi, missed payrolls led to sanctions and distrust. Local businessman Mike Danson later stepped in to stabilise operations, yet the episode exposed how quickly a club can unravel when owners fall short of basic funding tests.
These are not isolated tales. From Bury’s expulsion under Steve Dale to Macclesfield’s winding-up under Amar Alkadhi, the same pattern appears: rules that trigger only when crisis is visible, a vetting process that has not kept out weak or unsuitable owners, and a lack of transparency that leaves supporters guessing until the penalty drops.
The Owners’ and Directors’ Test has long been criticised for being narrow, box-ticking and overly private. Meanwhile, P&S focuses on backward-looking losses, so enforcement tends to arrive after cash has run out and creditors, players and staff are already suffering.
What the Independent Regulator promises, and what it must deliver
The government’s Football Governance Act introduces an Independent Football Regulator with powers that go beyond the EFL’s self-regulation. The intent is prevention, not punishment: tougher suitability checks for prospective owners and officers, scrutiny of sources of wealth, and the ability to refuse or remove owners who cannot meet standards. If implemented properly, that is a shift from firefighting to risk control.
🚨 Independent Football Regulator legally established today
📜 Jim Ratcliffe says red tape could ‘ruin’ the Premier League. But why are Man Utd, architects of the Super League which catalysed the regulator, opposed?
W/ @KieranMaguire for @tbrfootball https://t.co/8ezgF8ZBjl
— Adam Williams (@Adam___Williams) November 3, 2025
There are 4 tests the new regime must pass:
1) Proactive liquidity safeguards: Clubs that operate with wafer-thin cash must hold liquidity buffers, verified by independent auditors, to cover wages and tax for a set period. That would have changed the picture at Wigan when payrolls were missed, and at other clubs where HMRC debt spiralled. A licence condition with real-time monitoring, not an after-the-event fine, protects players, staff and community programmes.
2) Ownership vetting that looks through the structure: The regulator should examine beneficial ownership, related-party transactions and debt instruments in plain language. If an owner proposes a stadium sale, inter-company loan or opaque offshore financing, the club must disclose it in advance and show fair value. The Derby Pride Park saga showed how arrangements that are technically allowable can still push risk onto the club if left unchecked.
3) Accountability that follows the decision-makers: Fans do not want another season where points come off the league table while former directors face minimal consequences. The new system should allow targeted sanctions on individuals who submit misleading information or breach licence conditions, including director bans tied to football, personal financial penalties and mandatory restitution schedules if rules are broken. Punish the decision, not the shirt.
4) Radical transparency with fans: Clubs should publish simplified, timely financial dashboards: cash runway, debt, contingent liabilities and any regulator-imposed conditions. Shadow boards and fan representation can work only if information flows. Reading supporters repeatedly asked the same questions for years, yet clarity arrived late and usually alongside bad news. Make disclosure routine, not exceptional.
Wigan have had a very difficult few months. They were deducted 8 points before the season started after being in financial turmoil for the majority of last season. Multiple players have walked away from their contracts. Their captain was sold just 24 hours ago, the odds have been… pic.twitter.com/AMbAb6iW7u
— Football Away Days (@FBAwayDays) August 5, 2023
The regulator can also address systemic fragility. Most EFL sides are structurally loss-making and rely on owner funding. Sensible debt limits, guardrails on leveraged buy-outs and stress-testing against relegation would reduce boom-and-bust cycles.
None of this should strangle ambition. Ipswich Town and Southampton have shown how smart ownership and recruitment can coexist with discipline, while clubs like Luton Town climbed by turning transparency and sustainable planning into a competitive edge. The aim is not to flatten the pyramid; it is to prevent collapses that hollow out communities and erase history.
The EFL did not create every crisis, and the league has tightened elements of P&S over time. Yet supporters no longer accept a model that waits for the iceberg, then fines the lifeboats.
