Leicester City dodge PSR points deduction despite excess losses

Leicester wriggled out of a PSR breach on a technicality.

I put the above together without checking all the details, so please correct anything I may have got wrong here. The Athletic article is really poor and does not properly explain any of this; I got most of it from the comments.

If I have time, I'll pull up the independent commission's appeal findings because it was interesting in this case that the first independent commission rejected The Foxes defence.

This is what the Premier League said in their statement after the appeal:

The appeal has been upheld by an independent Appeal Board on the grounds that the club's accounting period which ended on 30 June 2023, came after the point the club had ceased to be a member of the Premier League. The Appeal Board's decision effectively means that, despite the club being a member of the Premier League for Seasons 2019-20 to 2022-23, the Premier League cannot take action against the club for exceeding the relevant PSR threshold in respect of the associated accounting periods [because the club had been relegated].

The statement goes on to say:

The Premier League is very disappointed with the Appeal Board's decision, and the limited reasons provided for it. The League remains of the view that the original Commission took the right approach in interpreting the rules in a practical and workable way that gives effect to their intended purpose. In overturning the original Commission's findings, the Premier League considers the Appeal Board's decision fails to take into account the purpose of the rules, all relevant parts of the PSRs and the need for effective enforcement of alleged breaches to ensure fairness among all clubs.

This is an unbelievable decision considering how Everton and to a lesser extent Nottingham Forest were dealt with. Both clubs could have been relegated for a lesser overspend. Leicester have also had a major sporting advantage as they won the FA Cup in year 1, but they have played the Premier League off against the EFL (despite overspending in both leagues) and were then deliberately obstructive to both.

Other Premier League clubs will be furious, especially the likes of Newcastle Utd and Aston Villa who have seriously wealthy owners but haven't been allowed to spend because of PSR.

Of course the big winners of this decision are Man City who will now argue that the rules are not fit for purpose and the 115 charges should therefore be dropped. A cynic would say it's been deliberately set up this way……

Another kicking to the amateur and improper Masters for the improper and less than professional PSR rulebook.

Accordingly the rules of both the EFL and PL cannot be applied as the club was not a continuous member of either association for the obligatory 3 years, irrespective of spent amounts in either.

Spirit of law be dammed, well done Messers Masters and Parry, you despise each other so much you failed to cover the obvious eventuality of a Leicester City. Pillocks. I bet Leicester's boardroom is rolling on the floor with laughter..

Just underlines what a travesty the Premier League's independent commission is... farcical.

No doubt Man City will get off too.

Bollocks to them all, crooked pricks!

I don't see how there could have been any other conclusion, it was farcical for the Premier League to charge them in the first place, didn't they read what their rule book actually says?

And even worse that the original "independent" commission didn't throw the charges out as being farcical.

Off on a technicality... but the whole thing is based on technicalities. This counts, that doesn't, credit for this, aggravation for that.

The real issue should be the sustainability of football clubs that have great history and are of massive importance to their community. Oh, and sporting fairness, but let's not even pretend the rules cater to that.

If they got off on a technicality, then good for them. Their lawyers earned their money. A good lawyer is apparently a very worthwhile signing in the current climate.

This has nothing to do with us.

Leicester City are not Man City and I'm glad to see them beating the North Wharf Road shower in a case that should never have been brought.

So the first independent commission addressed only the vexed question of jurisdiction.

LCFC were denying all charges of a PSR breach because they claimed they were no longer a Premier League club, no longer had to abide by the Premier League's rules, and therefore could not be legally charged for any breach by the Premier League.

This argument was not accepted by the first independent commission held in May 2024, and it's that decision which LCFC appealed. This position, taken by the commission in the jurisdiction hearing, is key:

The Commission considers that LCFC is a "Club" under the PL Rules applicable to the Season in which it participated and remains so despite its relegation. … A literal interpretation of the term "Club" would thwart the purpose of the PSRs and enable LCFC, and other clubs in a similar position, to avoid disciplinary proceedings for alleged breaches of the PL Rules which in the Commission's view cannot have been intended by the PL clubs when they
agreed the PSRs and the PL Rules.

I expect that the appeal commission reverted to the literal interpretation, rather than "the spirit of the rules", which is obviously a nonsense.

More to follow…

Christine @ 4. Exactly. Eric @ 6. Exactly.

It is staggering to believe that the P&S Rules were written by anyone with any comprehension of football, the Premier League, law, drafting rules and equality. It is a piece of buckshot aimed at keeping the prolls in their place.

Sadly, our own club voted it in so can have little complaint when charged with some breach of it. The fact that any quarter-decent barrister could have driven a bus through the holes in the so-called offence shows how piss poor Moshiri is at any understanding of operating in the football Bureaucratic world. Or his ability to hire the strongest legal team in the land.

As for Leicester City, when I saw the schedule of charges and the legislation being used, my first thought was: "That is an abuse of power." Rightly, they had nothing to answer. I am glad to see the commission criticise the bollocks that is that piece of junk called PSR.

The Premier League despots are so up their own chuffs and are lording it that they have long since forgotten about football and a game of the people for the people.

Like when our sovereignty was signed (illegally) to the EU, so has the beautiful game been sold to rich elitists as their new toy. The Premier League is not fit for purpose. None of them are.

It should be completely independent and run by elected officials who are from the recognised supporters club of each team in the Premier League. They should have no contact with anyone from the club and receive no favours. That way, it might work.

Although Leicester City ceasing to be a Premier League club is integral to this decision, the technicality that got them over the line was the date that they transferred their Premier League share (13 June) after relegation, and the end date of their accounting period (30 June).

The appeal commission found that LCFC were charged for the whole accounting period but were not a Premier League club for the whole of that period (ie, between 13 and 30 June). The commission found that LCFC could, theoretically, have used the 2 week gap to comply with PSR but not have been a Premier League club. The Premier League rules are drafted as years and, therefore, create a gap if a club's accounting period is beyond their relegation and transfer of Premier League share date.

Interestingly (to me anyway) LCFC changed their accounting date to 30 June earlier in the year. If they hadn't and had left it at the end of May, they'd have lost the case.

Quite happy for Leicester, the whole thing is a joke.

Prior to the breakaway by the top flight, all divisions would have been part of the same Football League & subject to the same rules.

However, once that separation of organisations has occurred the knock-on effects can be myriad. The FA must be chuckling at the monster they helped create.

Who is next up to be charged with trying to compete?

Eddie Howe said it could take 10 years before Newcastle can compete with the spending power of the Top 6.

Our purse strings have been cut for 4 years and counting whilst Chelsea amass an army of players on 10-year contracts.

It's so obvious the powers that be are only interested in keeping the top clubs sweet and protecting the product rather than growing a game.

Hopefully ends any threat to us of a deduction this season.

If a club were sanctioned and relegated, whilst Leicester dodge it, surely opens up the Premier League to be sued for negligence. Poor drafting of the rules left the loophole that Leicester took advantage of.

This is all set up nicely to let Man City off.

Mike "Hopefully ends any threat to us of a deduction this season. If a club were sanctioned and relegated, whilst Leicester dodge it, surely opens up the Premier League to be sued for negligence."

Mike, I think the issues might be different? The Premier League wanted to sanction Leicester after they were relegated. Everton being sanctioned while in the Premier League (with that leading to relegation) seems to be a different scenario and a legitimate area for Premier League involvement.

Well, Leicester are back in the Premier League.

Can't they be recharged?

PSR is a poor rule that is not achieving its aim which I assume was to stop clubs from failing to complete their fixtures due to insolvency, administration, bankruptcy or whatever name you want to give it. It might even have the opposite effect in that clubs may not effectively be competitive in their fixtures.

Time for the majority who voted for it to reconsider the question but which of them has the courage to raise the matter, or has it become a matter of dog eat dog?

So Leicester cannot be found guilty of PSR breaches because they were not a Premier League club at the time, which means they were a Football League team, who also happen to have PSR rules.

So, because Leicester are now a Premier League team again, that means the EFL cannot find them guilty. Does that mean therefore, that when Leicester get relegated this season, the EFL can then charge them and they start next season in the Championship on minus 10 points?

The Guardian:

Leicester could face another points deduction battle this season, with the club required to submit their 2023-24 accounts to the Premier League by the end of December to establish whether they have breached profitability and sustainability rules.

The league will apply a rule introduced last summer to investigate Leicester's finances at the earliest opportunity, after expressing “disappointment” at Tuesday's judgment from an independent commission regarding the club's three-year losses ending with the 2022-23 campaign. The three-person appeal panel ruled the Premier League had no jurisdiction to charge Leicester for overspending during the season they were relegated because the club were in the EFL when the annual accounting period ended on 30 June.

Maybe Everton should use the barristers Leicester used and appeal against the points deductions last season.

They cost us a few £million through the places we lost at the end of the season in league positions!

Tricky Dicky will still have Everton in his sights, in relation to the continuing argument about which loans and interest charges should have been put exactly where in the accounts, in an effort to show that his organisation still has power and control of the situation.

What an unmitigated mess it all is; the Leicester decision doesn't really impact Everton's charges and subsequent punishments, but Forest must be fuming.

Les @18,

They can't be charged again for the same PSR breach (2019-20 thru 2022-23). Once freed on the appeal, that's it.

As that Guardian quote @21 says, they may be charged in future for periods that include 2022-23, although exactly how their relegated season (2023-24) is treated (if it is even included?) will depend on whether the current and future iterations of the P&S Rules (which can be changed or amended in each new season's Premier League Handbook) have been rewritten by Masters and Co to close this particular "loophole".

Dave @22, we did appeal the first and got a few points back; no further appeals allowed. We later dropped our appeal for the second, and that's it — the window for submitting such an appeal is long gone.

Thanks for the explanation, Michael.

It still stinks though. It's like saying anyone who dodges their tax can get away with it if they move house!

Les #25,

Only if you move house to overseas. ;-))

Michael, from my own observations, simply winning an appeal may not be enough for Leicester. Everton appears to have been charged with the same offence three times and to have been punished twice.

Personally, I hope Man City get away completely unscathed since this will just reinforce even further the perception of the utter unfairness of Everton's punishment, which cannot, in any manner, be reversed or recompensed.

I actually want Everton's (and Forest's) cases to be seen for what they were: a deliberate, malicious, premeditated, corrupt attempt by the US-red teams to make sure that no uppety "small" clubs (Everton, Villa, Newcastle) could ever be able to finance a challenge.

Personally, I'd rather see a PSR where only revenues associated with the Premier League were permitted and the money from the unwatchable "Champions" League had to be excluded. That would sort out a few of them!

Interesting, Charles.

I could foresee the Premier League modifying the rules for next season (too late for this season) to plug up the relegation loophole that saved Leicester City from a PSR hearing this time.

Then, they would have to be hit with a new PSR charge for their 2024-25 financials that would include 2023-24 and 2022-23 (where I think the big overspend was... but could have been earlier) — irrespective of which league they are in.

If so, they could end up being double-charged, like Everton were, for successive breaches of PSR — assuming they will be over the threshold of allowable losses.

But this would require an agreement with the Football League, which they would want to include all the top-down monies the Premier League clubs could not agree on, so that might stall it!

I live in hope that the 14 smaller clubs in the Premier League will use their combined power to rebel against PSR and reject the whole thing out of hand from next season. Why they have not done this already is a mystery… I can only think of fear that Uefa have some hold over them?

Something I've never thought of that last paragraph, Charles, but it makes a whole lot of sense to people who are genuinely concerned that FFP, or PSR, is nothing but a sham to protect the chosen few.

I have always thought that a team shouldn't be allowed to consistently qualify for the Champions League if they are not winning a domestic trophy at least once every three seasons, maybe (because a lot of clubs have been Champions at some stage)?

Look at the problems Everton are having because the new stadium has been factored into the club's PSR, and then cast your mind back and remember how Arsene Wenger helped Arsenal build a fantastic new stadium without spending any real money, just because he kept getting his team into the Top 4, which enabled his club to keep receiving the massive rewards that being in the Champions League brings.

Michael, it is likely that there will be a completely different financial regime to PSR next season.

I'm sure there will be some people with more knowledge than me about it but roughly it will be limiting the amount a club can spend on transfers and salaries in a season to a percentage (85%?) of turnover.

I'm sure they'll look to close loopholes like Leicester used but obviously be happy to let Chelsea continue to sell assets across the group to generate revenue!

Well, Man Utd have escaped PSR censure:

£40m Covid loss claim may have helped Man United escape PSR breach

And Man City's Great Escape is scheduled for next week

Man City hearing into 115 Premier League charges to begin next week

I agree with the sentiment that PSR / FFP is a sham.

It should be regulated, as should the Premier League and Uefa as well as Fifa in their tax free haven headquarters in Switzerland. At the governance level, it's all corrupt.

Fat cats and always reminds me of George Orwell's Animal Farm. All animals are equal, but some are more equal than others.

Good luck to the Premier League taking on Manchester City. I think City will tear them a new one.