The English Football League (EFL) is considering charging Leicester City for an alleged breach of profitability and sustainability rules (PSR) that the Premier League was prevented from pursuing earlier this month, particularly if the club faces relegation. The EFL is reportedly seeking legal advice following an independent commission's decision that the Premier League lacked jurisdiction to charge Leicester for overspending during the 2022-23 season. Leicester managed to avoid a potential points deduction this season after their legal team successfully argued that, having been relegated 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 penalties given to Everton and Nottingham Forest last season, could have resulted in a deduction of up to seven points if found guilty.
The EFL is resolute in enforcing its regulations and is believed to have received legal guidance indicating 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, despite competing in the Premier League for all three seasons, the club was officially in the Championship when their accounts were submitted. Leicester’s permitted losses would be reduced by £22m to £83m due to the stricter spending limits of the EFL.
“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 previously brought charges against clubs for historical PSR breaches, with Sheffield Wednesday and Derby being docked points by the EFL in 2020 for breaches that occurred more than two years earlier, both cases involving the sale of their stadiums to sister companies to generate profit in their accounts.
The EFL has been in dispute with Leicester for over 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 that 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 must 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.
