The English Football League wants to charge Leicester over the alleged breach of profitability and sustainability rules (PSR) the Premier League was blocked from pursuing this month, if the club are relegated.
The EFL is understood to be seeking legal advice after an independent commission ruled the Premier League had no jurisdiction to charge Leicester for overspending during the 2022-23 campaign.
Leicester escaped a possible points deduction this season after their legal team successfully argued that after relegation last summer they were not a Premier League club when they submitted their accounts for the 2022-23 season on 30 June 2023. The club had been charged with a £24.4m breach of the £105m PSR loss limit by the Premier League, which based on the punishments given to Everton and Nottingham Forest last season would have resulted in a deduction of up to seven points if found guilty.
The EFL is determined to ensure the regulations are enforced and is understood to have received guidance that Leicester would fall under its jurisdiction if relegated. The club officially joined the Championship on 13 June 2023 before filing their accounts two and a half weeks later.
The EFL will argue that it can impose sanctions on Leicester for the 2020-23 cycle because the club, despite having competed in the Premier League for all three seasons, were officially in the Championship when their accounts were submitted. Leicester’s permitted losses would be reduced by £22m to £83m because the EFL’s spending limits are stricter.
“You can’t have clubs going up and down, and getting away with breaches scot-free on the grounds they’ve changed divisions,” an EFL source told the Guardian. “It’s ridiculous. Promotion and relegation is a fairly well established concept.”
The EFL has successfully brought charges against clubs for historical PSR breaches. Sheffield Wednesday and Derby were docked points by the EFL in 2020 for breaches of regulations that had taken place more than two years earlier, with both cases related to using the sale of their stadiums to sister companies to generate profit in their accounts.
The EFL has been in dispute with Leicester for more than a year, and there is no time bar regarding PSR offences in its regulations. The club blocked the EFL’s attempt to make them sign up to an agreed business plan last November after concerns were raised they were forecast to breach PSR limits for the 2023-24 season but were later placed under a transfer embargo, which was lifted when Leicester officially returned to the Premier League in June.
Leicester have to submit their accounts for the 2023-24 season by 31 December. They recorded pre-tax losses of £92.5m and £90m in 2022 and 2023 respectively before the Premier League’s deductions for infrastructure spending, but remain confident of avoiding a breach.
The EFL declined to comment.
