Leicester City, the former Premier League champions, are facing charges for breaching spending regulations during their last three seasons in the top flight. The club has been referred to an independent commission for allegedly breaking profit and sustainability rules (PSR) and failing to submit audited finances. If found guilty, Leicester could potentially face a points deduction. This comes as the Foxes are already under investigation by the English Football League (EFL) for separate financial issues.
Leicester City expressed their surprise and disappointment at the timing of the Premier League’s actions, considering they are currently competing in the Championship, not the top flight. The club stated that they would defend themselves against any unlawful acts by the football authorities, should they attempt to exercise jurisdiction where they cannot. However, Leicester remains willing to engage constructively with both the Premier League and the EFL to seek a proper resolution of any potential charges.
The club has not yet made public its accounts for their last season in the Premier League. However, it is known that they incurred a record loss of £92.5 million in the 12 months leading up to May 2022. The previous season, when Leicester won the FA Cup for the first time, they reported a pre-tax loss of £33.1 million. Premier League rules permit clubs to make losses of up to £105 million over a three-year period, or £35 million per campaign, before facing sanctions.
Leicester City is not the only club to face charges related to PSR breaches. Both Everton and Nottingham Forest have also been charged for their accounts up to the 2022-23 season. Nottingham Forest has already been found guilty and received a four-point deduction, while Everton faced a ten-point deduction that was later reduced to six on appeal. Everton is also awaiting a potential second punishment related to their 2022-23 accounts.
Leicester’s case differs from Everton and Nottingham Forest as they were not required to submit their accounts by the December 31 deadline. This deadline was introduced to expedite the reporting process and ensure that penalties are imposed during the season when the alleged transgressions occur. Since Leicester dropped out of the Premier League before this rule was implemented, the independent commission will determine the timescale for their case. As a result, any potential sanctions may be enforced next season, extending beyond the current campaign.
In addition to the Premier League charges, Leicester is also under investigation by the EFL for a possible breach of PSR rules in the ongoing season. The club was forecasted to exceed loss limits for the current three-year term. Leicester has emphasized their commitment to adhering to the profit and sustainability rules, citing their operating model over a long period.
The timing of the charges against Leicester City is crucial, as they are currently second in the Championship and any penalty imposed this season could have significant implications in the promotion race. However, with just over six weeks remaining in the Championship campaign and potential appeals to factor in, it is unlikely that a resolution will be reached by then. The Premier League’s involvement is now limited since Leicester has been referred to an independent commission. As the club was relegated last season, the 12-week time frame specified in the new ‘standard directions’ does not apply to their case. These directions aim to ensure swift handling of charges and application of punishment within the same season.
Leicester’s case may follow a similar timeline to Everton’s first charge before the introduction of the new rules. Everton’s case lasted from March to November, resulting in a ten-point deduction reduced to six on appeal. Depending on the outcome of Leicester’s case and any potential punishment, there is a possibility that they could start next season’s Premier League campaign with a points deficit if they achieve promotion.
Leicester City’s journey through these financial investigations will undoubtedly impact their future prospects. As they continue to compete in the Championship and strive for promotion, the resolution of these charges will determine their standing in the footballing world. The club remains committed to cooperating with the authorities and seeking a fair resolution to the allegations brought against them.