Leicester City is on the brink of facing charges for allegedly violating Premier League financial rules, with reports suggesting a breach could be confirmed as early as the coming week.
The club finds itself in jeopardy over potential infractions of the Profit and Sustainability Rules (PSR) for two separate three-year periods, one concluding at the end of the 2022-23 season and the other at the conclusion of the ongoing 2023-24 season. It’s anticipated that the earlier cycle’s issue will be addressed first, with Sky Sports News reporting a possible charge could be announced next week.
Premier League guidelines permit clubs to report losses up to £105m over three seasons. Surpassing this threshold could trigger sanctions, including the deduction of points.
Leicester City’s financial statements for the 2022-23 season are expected to be released at the month’s end. The club already reported combined losses of £125.5m for the two preceding seasons, necessitating a profit of over £20m to stay within the allowable loss margin.
Despite the apparent excess in losses, certain allowances within the regulations mean exceeding the £105m loss limit doesn’t immediately indicate a rules violation, pending further evaluation.
In a bid to reduce their financial outlay for the 2022-23 season, Leicester sold Wesley Fofana to Chelsea for £75m and only brought in Wout Faes for £15m. Nonetheless, these measures might still fall short of preventing a rules breach.
Similar charges have been brought against Everton and Nottingham Forest for the same timeframe, with their hearings scheduled before May 24. Everton previously faced a 10-point deduction, which was reduced to six, for breaching the PSR in the three years ending in 2021-22. Leicester City could face a points deduction too, regardless of their league status, if found guilty of such infringements.
Additionally, Leicester City’s financial practices for the three years leading up to the end of the 2023-24 season are under scrutiny following a recent dispute with the EFL. Despite an independent panel ruling that the EFL had overstepped in requesting a business plan for cost reduction from the club, Leicester has not refuted the possibility of a PSR breach.
With a few months left to potentially alter this trajectory, the club might consider player sales this summer, which would need to be completed by the financial year’s end on June 30. Leicester City has been contacted for a statement regarding these reports.
