Almost a decade ago the Foxes achieved the greatest underdog story in English football history by winning the Premier League in 2016. Fast-forward to 2026, and it could be playing football in the third tier of English football after an appeal for a six-point deduction was upheld.
Leicester City’s appeal to overturn a six-point deduction for breaking English Football League (EFL) financial rules has been rejected.
Leicester were first charged in February 2026 after an independent commission found the club had broken financial rules. The latest ruling means the 2015/16 Premier League winners are only one point away from escaping the EFL Championship relegation zone, sitting 22nd on 41 points.
The Premier League charged Leicester in 2024 after it found the club had broken Profit & Sustainability Rules (PSR) across the three-year period from 2020 to 2023, amounting to £129.4m in losses, £24.4m over the three-year threshold.
Leicester argued during the 2023/24 season, when it competed in the EFL Championship, PSR did not apply and an appeal panel board sided with the club in September 2024.
Leicester was placed under investigation after being referred to an independent commissioner by the EFL over breaches of the football league’s financial rules. The club was questioned over a failure to submit annual accounts to the Premier League by December 31, 2024, and failure to provide full and prompt assistance to the league in response to its inquiries.
“With the matter now at an end and five games of the season remaining, everyone at the club is fully focused on the matches in front of us and on shaping the outcome of our season through our results on the pitch,” said a club statement.
“We know this has been a challenging period, and we thank our supporters for the backing they continue to give the team. The responsibility now is to ensure these remaining games are approached with the focus and intent our current situation demands.”
The financial implications of another Leicester relegation?
If Leicester were to be relegated for a second consecutive season, it could compound even more financial issues for the club.
While parachute payments from last season’s relegation from the Premier League will not be accounted for in Leicester’s 2025 financial statement, it will only receive a 12.6% basic rate solidarity payment, which is significantly less than the approximate £30-50m it will receive in its 2026 financial statement.
The club may also find it extremely difficult to sell players who continue to play for Leicester on high salaries relative to other Championship and League One clubs.
According to Capology, Leicester ranks number one for the highest paying payroll in the 2025/26 Championship, with an estimated gross annual payroll of £42.6m per-year, or £820,500 per-week.
Relegation to League One can also mean Leicester are not ensured to be immediately promoted back to the Championship, and even the Premier League, in the new age of more stringent financial rules.
Whilst returning to the Premier League this season, Sunderland were relegated to the Championship after the 2016/17 season, and then relegated to League One after the 2017/18 season after spending a decade in the Premier League.
From 2017 to 2024, Sunderland experienced consecutive years of losses due to salaries and significantly less access to valuable commercial partnerships that are afforded to Premier League clubs, due to the league’s global popularity.
