Sunderland football club is in good financial shape, despite making a £26million loss, according to chairman Niall Quinn.

He told the Echo that Portsmouth's fall from footballing grace will never be mirrored on Wearside. Its not about getting lucky on the lottery or scratch cards but on running a healthy football club, at a profit.

The south coast club faces a nine-point deduction and relegation from the Premier League at the very least after going into administration to avoid a Revenue and Customs winding-up petition earlier this month.

Sunderland's latest results show the Black Cats making a multimillion-pound loss to the end of July last year – but Quinn and chief executive Steve Walton have emphasised the club is on firm ground.

"The figures show a loss of £26million – but that was invested in players," explained Quinn.

The situation at Fratton Park was an indication that the Premier League needed to put its house in order.

"Portsmouth is a serious wake-up call," he said.

Portsmouth made more than 80 employees redundant this week, a situation the two men at the club are determined they will never see at Sunderland, even though the new accounts show the wage bill rising by £12million a year.

Tuesday's win against Bolton saw the Black Cats open a six-point gap on the bottom three – with the club's goal difference effectively worth another point.

But Quinn was on the playing staff when Sunderland were relegated previously and saw the impact it had on the club's workforce. It will not be the backroom staff who bear the brunt of any future failure. "It won't happen at this football club," he vowed.

"Should the worst happen, we can handle it. It will not really hurt this club in the way it might have in the past.

"Every high earner, including myself, will have a wage cut of 40 per cent should we ever get relegated – that brings the wage bill down by 40 per cent, one or two players leave and we are fine."

Roman Abramovich was praised recently for converting his loans to Chelsea into shares in the club – but he was simply following in the footsteps of Black Cats owner Ellis Short, whose investment in the club is now approaching £100million.

"That is a massive thing," said Quinn. "It is the exact opposite of what has happened at Portsmouth, it is the exact opposite of what has happened at Manchester United."

Mr Walton was quick to agree: "It is all cash," he said. "He has not brought any debt to the club in the way we have seen at Manchester United or Liverpool. He can't pull that money out."

Mr Short, however, is not a bottomless pit of cash and Mr Walton was keen to point out the club was always looking for ways to raise cash – and still needed the support of fans.

"Everything we do that is not related to football is about generating cash to put into the coffers to improve the product on the pitch," he said.

"We are one of the leading lights in terms of football clubs doing off-the-pitch things. We have got Pink coming this year and we are still trying to get another concert."

Season ticket renewals were vital to the stability of the business. "When we get that commitment from fans, I know exactly what I have to play with in terms of income," said Mr Walton.