Leicester City budgeted like a top-eight club, was relegated, then lost six points

Back-to-back fifth-placed finishes in the Premier League convinced Leicester City's board, in the words of BBC Sport's report, that this was the club's natural place, and it spent accordingly. The club paid just over £100m to sign six players across 2021-22 and 2022-23, and its wage bill ballooned to £206m. Football finance expert Kieran Maguire told the BBC the club had "effectively budgeted" for a top-eight finish "and didn't take into consideration the potential downside".

Premier League contracts normally carry clauses that cut pay by 30% to 50% on relegation. It is widely reported that Leicester inserted none. When the club went down in 2022-23 it was spending 116% of its income on salaries, and 102% the following season, when a £107m wage bill was, per Maguire, unprecedented for a second-tier club. The Championship median was £29m.

That Championship spending is what the Premier League later penalised: it put the club £20.8m over the profit and sustainability (PSR) threshold. A commission docked Leicester six points in February 2026, leaving a team that had gone straight back down from the Premier League sitting just above the relegation zone on goal difference, ten years after the 2016 title.

Relegated in 2023, then a six-point deduction in February 2026 after breaching the PSR threshold by £20.8m.

The board treated a top-eight finish as the baseline and budgeted for it, with no plan for the downside.

Reportedly, player contracts had no relegation salary-reduction clauses, so the wage bill did not fall when the club did.

Spending stayed far above second-tier levels after relegation: 116% of income on wages in 2022-23 and 102% in 2023-24.

The club fought every financial charge, which caused delays, and the commission rejected its claim of having shown "exceptional co-operation".

Budget for the season you might have, not the one you just had: contracts without a downside clause turn one bad year into a multi-year bill.

King Power International Group, which has owned the club since 2010, called the points deduction "disproportionate" and insisted the club had done nothing wrong. The BBC reported that one sanction mechanism the Premier League proposed would have meant a 12-point deduction. The club had no manager after Marti Cifuentes was sacked after six months, no permanent chief executive and no technical director, and fan protests against the owners were growing. In 2018 Leicester had already paid the EFL £3.1m to settle a dispute over its 2013-14 Championship-winning season.