Leicester City’s Points Deduction – Why did it happen?
This week, Leicester City Football Club was hit with a six-point deduction in the Championship. For the club and its fans currently in the midst of a relegation fight in the Championship, this is a major effect on their season but what has happened and why is a points deduction the consequence?
What is a points deduction and why is it so serious?
A points deduction is one of the most severe penalties a football club can face. It means the club loses points from its league total, which can have a huge impact on promotion, relegation, effecting the club’s future. Such sanctions are reserved for significant breaches of the EFL Profit and Sustainability Rules (“P&S Rules”). in this case, the financial regulations that govern how much clubs can spend and lose over a set period.
What rules have Leicester City been deemed to have breached?
Leicester City was found by the Premier League Commission (the “Commission”) to have breached the P&S Rules in two main ways:
Exceeding the Upper Loss Threshold (“ULT”):
The club’s financial losses over the relevant three-year period were £20.8 million above the permitted ULT of £83 million. This threshold is set by the EFL’s P&S Rules and is designed to ensure clubs do not spend unsustainably in pursuit of sporting success. The Commission determined that the correct ULT was £83 million (not £105 million as Leicester argued), and that the assessment period should be 36 months.Failure to Disclose Annual Accounts:
Leicester was also found to have breached its disclosure obligations by refusing, without sufficient justification, to provide its annual accounts for the relevant financial year when requested by the Premier League. While this was not treated as a separate sanction, it was considered when assessing whether the club deserved any reduction for cooperation.
Leicester City challenged the process on several technical grounds, including the correct calculation of the ULT, the length of the assessment period, and the fairness of applying the EFL’s sanctioning guidelines. The Commission rejected these arguments, confirming the lower threshold and the 36-month period, and found that the club’s conduct did not amount to “exceptional cooperation”
Why a points deduction and not just a fine?
The Commission decided that only an immediate points deduction in the Championship would be an effective sanction. Fines are often seen as less of a deterrent for wealthy clubs, and delaying the penalty until Leicester returned to the Premier League would not have the same impact, especially given their current position in the lower end of the Championship. The aim is to ensure that clubs cannot gain a sporting advantage by overspending and then avoid meaningful punishment.
What does this mean for football clubs and fans?
This case is a clear signal that financial rules in English football are being enforced robustly. Clubs must be vigilant in their financial planning and compliance, as breaches can lead to severe sporting and reputational consequences. For fans, it’s a reminder that what happens off the pitch can be just as important as what happens on it, as we have recently seen with Sheffield Wednesday and their solvency issues, deemed to be a different breach of the P&R Rules.
If you are involved in a football club, sports organisation, or advising one, financial compliance is not optional. A single breach can carry serious sporting and reputational consequences. Speak to our Sports Law team to understand your regulatory exposure and protect your club before issues arise.
