September 4 – In a surprise ruling that could have far-reaching consequences for English top-flight football’s entire financial fair play strategy, Leicester City have won an appeal against a decision that could have led to a points deduction for allegedly breaching spending rules.
The Premier League had originally charged Leicester for breaking the rules by making a loss for three seasons leading up to 2022/23 of £129.4 million – £24.4 million, more than the permitted £105 million losses.
Leicester appealed, arguing the Premier League did not have jurisdiction to punish them in this way because they had been relegated to the second-tier Championship when their accounting period ended on 30 June 2023 and therefore they were no longer bound by Premier League regulations.
An independent panel has now found in the club’s favour saying the Foxes were “no longer a club” governed by the so-called profit and sustainability rules when the calculation was carried out.
The board found that Leicester’s accounting period ended on June 30, 2023, a month and two days after the Foxes were relegated from the top flight.
“It is not obvious why such a club should be subject to the disciplinary jurisdiction of the Premier League,” their decision read.
Leicester, who are back in the top flight after winning the Championship last season, were “not in breach, and should not be treated to be in breach, of the rules”, the panel added.
In a statement Leicester said it “welcomes the Appeal Board’s comprehensive decision, which supports our consistently stated position that any action against the Club should be pursued in accordance with the applicable rules.”
The ruling undermines Premier League authority and the body responded by saying it was “surprised and disappointed” by the panel’s decision.
“If the appeal board is correct, its decision will have created a situation where any club exceeding the PSR threshold could avoid accountability in these specific circumstances. This is clearly not the intention of the rules.”
“The appeal board’s decision effectively means that, despite the club being a member of the (Premier) league from seasons 2019-20 to 2022-23, the league cannot take action against the club for exceeding the relevant PSR threshold in respect of the associated accounting periods. The Premier League is very disappointed with the appeal board’s decision, and the limited reasons provided for it.”
The Premier League will now consider what further action it can take to ensure it is able to enforce its rules consistently and “maintain the principle of fairness”.
The judgement, which will doubtless be interpreted by some as Leicester exploiting a loophole, will have been closely monitored by the likes of Nottingham Forest and Everton both of whom received points deductions last season after being found to have breached PSR rules.
Premier League champions Manchester City were charged early last year over 115 alleged breaches of regulations and financial rules in a case that has not yet been heard. City strongly deny the charges.
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