Leicester face a nervous wait to discover whether they will be charged by the Premier League with breaching profitability and sustainability rules (PSR) for a second successive season. The club are one of several in the top flight who had to submit their financial accounts for the 2023-24 season by 5pm on New Year’s Eve, because they have recorded losses over the past two years, and will be told by 13 January whether they have breached PSR.
Leicester escaped a Premier League points deduction earlier this season after they were charged with a £24.4m breach for the 2022-23 season. The club’s legal team successfully persuaded an independent commission that, having been relegated at the end of that season, Leicester were not in the Premier League when they submitted their accounts for that period on 30 June 2023.
The club recorded pre-tax losses of £92.5m and £90m for the 2022 and 2023 financial years respectively, however, so are at risk of being charged with another breach. Given the points deductions handed out to Everton and Nottingham Forest last season, any charge could be a severe blow to Leicester’s survival hopes, with Ruud van Nistelrooy’s side second-bottom at the halfway point.
Premier League rules restrict clubs to losses of £105m over a three-year period if all those years were spent in the top flight. Because Leicester were in the Championship last season their permitted losses for the current three-year cycle will be reduced by £22m, owing to the English Football League’s stricter spending limits. The club’s losses will have been reduced by last season’s player sales, with Harvey Barnes’s £38m move to Newcastle and Timothy Castagne’s £15m transfer to Fulham to be included in their latest accounts, along with the £10m compensation received from Enzo Maresca’s move to Chelsea. The £30m sale of Kiernan Dewsbury-Hall to Chelsea will not be included because that did not go through until July 2024.
Leicester have expressed confidence they will avoid another charge, but Premier League sources feel the club may have a case to answer.
As previously reported by the Guardian Leicester could face charges from the EFL for overspending during the 2020-23 period at the end of this season if they are relegated.
Under regulations introduced 18 months ago, designed to ensure that any PSR breaches are dealt with swiftly, all Premier League clubs that have posted aggregate losses over the previous two accounting periods must hand in their accounts for the previous season by 31 December. Premier League lawyers and accountants will spend the next fortnight assessing the numbers to determine whether there have been any PSR breaches, with any decision to charge published by 13 January.
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Given Leicester were found to be in breach by £24.4m for the 2022-23 season they are the club most vulnerable to charges. Chelsea, Everton and Forest sold players last summer so are confident of complying with PSR.
Source: theguardian.com
