Leicester face points deduction as they are charged with alleged breach of PSR with club now set for legal battle
LEICESTER face a points deduction next season after their relegation from the Prem – after a major legal call went against the Foxes.
But the King Power Stadium side will NOT be punished for their PSR breach in the 2022-23 season – which could have meant a second points loss.
Leicester claimed a major win over Prem chiefs in September when an Appeals Board agreed that they could not be punished for their 2022-23 breach because it was not confirmed until AFTER they had formally rejoined the EFL.
The club’s accounts for the three years up to their relegation season saw a PSR loss of £124.5m, £19.5m above the £105m threshold.
But Leicester put back their accounting period by one month to the end of June – after their Prem “share” had been transferred to Luton.
While a Prem Commission ruled that the League did have jurisdiction, that ruling was set aside by the Appeal body.
And now an Arbitration Tribunal, consisting of two Law Lords and a senior KC, has ruled that although the Appeal Board was “wrong” to make that decision, it did not add up to the “perverse interpretation of the law” required for the decision to be revoked.
That was a win for Leicester, but was swiftly followed by a defeat that seems certain to impact them next term.
In a similar conflict, Leicester claimed that they could not be punished for their breach of the EFL PSR loss limit of £83m in 2023-24, arguing that they were not formally under investigation before they were promoted back to the Prem.
But the Arbitration Tribunal ruled that the March 1 letter from EFL legal and financial eagles noting the forecast loss above the £83m threshold meant it “was subject to an investigation by the EFL into an alleged breach”.
In response to that decision, which gave it the green light for action, a Prem spokesman said: “Following an Arbitration Tribunal’s decision concerning jurisdiction, Leicester City FC has now been referred to an independent Commission for alleged breaches of:
“The EFL Championship Profit and Sustainability Rules (P&S Rules) for Season 2023/24.
“The club’s obligation to provide its Annual Accounts to the Premier League by 31 December 2024.
“The club’s obligation to provide full, complete and prompt assistance to the Premier League in response to the League’s inquiries.”
It means a Prem commission will now rule on the punishment – but any points deduction imposed WILL be applied in the Championship.
Clubs in both leagues agreed an alignment of financial rules last month as the “Leicester loophole” was closed.
An EFL spokesman said: “The EFL notes that the Premier League has today referred Leicester City to an independent Commission for an alleged breach of Profit and Sustainability Rules for the period ending season 2023/24.
“The EFL commenced an investigation into this reporting period following the March 2024 submissions and as is permitted in accordance with EFL Regulations, jurisdiction for that passed to the Premier League at the conclusion of the 2023/24 season on the Club’s promotion.
“We will now await the outcome of the Premier League proceedings and until then are not able to comment any further on the matter.”
Leicester responded by saying the club was “pleased” at the outcome of the 2022-23 proceedings but conceded: “The Premier League was successful in establishing jurisdiction on one of the two grounds argued with respect to the assessment period ending FY24.
“The Premier League has now referred this to an independent Commission.
“Consistent with its previous commitments, the Club intends to engage cooperatively in this matter now that the Premier League’s jurisdiction has been established for the period ending FY24.
“However, we will not be able to comment further on these proceedings until they are concluded, due to their confidential nature.”