Leicester City have been hit with a new PSR charge after avoiding a points deduction like Everton and Nottingham Forest last year
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After avoiding a points deduction at the start of this season through the sharpest of technicalities, despite a larger PSR breach than either Everton or Nottingham Forest who suffered points deductions, Leicester City have now been charged with an alleged breach for the 2023/24 season, while in the Championship.
The East Midlands club have now been referred to an independent commission with another legal battle looming a month after their second relegation from the Premier League in three seasons was confirmed. A Premier League media release reads as follows: “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
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“The Arbitration proceedings looked at (a) the Premier League’s jurisdiction to investigate an alleged breach by the club of the EFL’s P&S Rules for Season 2023/24; and (b) a previous Appeal Board decision regarding the League’s jurisdiction in respect of a breach of the Premier League’s Profitability and Sustainability Rules (PSR) for Season 2022/23.”
It adds in summary: “Regarding (a), the Tribunal decided that the Premier League has jurisdiction to investigate and refer the club to an independent Commission for an alleged breach of the EFL’s P&S Rules. The alleged breach relates to the assessment period concluding at the end of the 2023/24 season, when the club was a member of the EFL Championship. The Tribunal confirmed that the Premier League has the power to investigate an alleged breach of the P&S Rules because the EFL validly transferred responsibility for its investigation to the Premier League in June 2024, when the club was promoted from the Championship. The Premier League continues to have jurisdiction even though Leicester City will be relegated to the Championship at the end of this season.
“Regarding (b), the Premier League challenged, via Arbitration, an Appeal Board decision made in August 2024. The Appeal Board had ruled that the Premier League did not have jurisdiction to charge the club for an alleged breach of PSR. This was because the club was no longer a member of the League at the time of its accounting year-end date in 2023. The Appeal Board had overturned an earlier independent Commission decision that the Premier League did have jurisdiction. While the Arbitration Tribunal decided that the Appeal Board was wrong, they found the Appeal Board’s decision was not a perverse interpretation of the law (which was the relevant test to overturn the decision), and therefore dismissed the Premier League’s claim.”
Last year, an independent panel found the Premier League did not have the jurisdiction to punish the club as they had been relegated to the Championship when their accounting period ended on June 30, 2023. The Premier League said it was “surprised and disappointed” by the panel’s decision. Leicester said they had “simply sought to ensure that the rules are applied based on how they are actually written.”
As this correspondent wrote in a comment piece at the time, nobody was disputing the huge losses that Leicester accrued. What they did though is exploit a massive loophole and got off on a technicality because Abdoulaye Doucoure’s goal against Bournemouth at Goodison Park a month before they filed – the club extended their accounting period to 13 months to bring it in line with the rest of the business – ensured they, unlike Everton and Nottingham Forest who both suffered points deductions last season for PSR breaches – went down and having handed in their Premier League shares after relegation, therefore could not be bound by the top flight's rules.