Leicester City’s PSR situation explained – why club is still at risk of Premier League charge and what punishment could be

Yesterday at 08:57 AM

All Premier League clubs have avoided any charges for breaching Profit and Sustainability rules, but Leicester City remain at risk.

Each top-flight side breathed a sigh of relief on Tuesday morning as it was confirmed that no clubs had broken any rules.

Leicester, who avoided a points deduction at the start of this season after an appeal, were the most relieved.

The Foxes were reported to be the most likely club to receive punishment due to their previous close call.

But they have avoided any deductions – at least for now…

Why are Leicester still at risk of PSR breach?

Leicester have been cleared for the 2023/24 PSR period but they remain in a dispute over the previous season.

The club were charged for a breach earlier this year but won their appeal to avoid a sanction regarding the 2022/23 campaign.

They actually benefitted from the fact they were relegated at the end of that season, using it to find a loophole.

The Premier League were not happy with the decision made by an independent commission and all parties still remain locked in ‘confidential arbitration proceedings’ over the 2022/23 accounts.

The league released a specific statement about Leicester on Tuesday to address the ongoing situation.

It reads: "Issues as to the jurisdiction of the Premier League over Leicester City Football Club in relation to PSR compliance are currently the subject of confidential arbitration proceedings.

"Accordingly, neither the league nor the club will make any further comment at this stage about any aspect of the club's compliance or otherwise with any of the PSR or related rules.

“Save to say that no complaint has been brought against Leicester by the league for any breach of the PSRs for the period ending season 2023-24."

So despite Leicester being confirmed to have no breaches in the 2023/24 period, the previous year remains up in the air.

And if they’re eventually found to have breached in that time, a punishment of a points deduction would be set to follow.

Football finance expert Stefan Borson has given talkSPORT an insight into what could happen should the club be sanctioned.

Borson said on White and Jordan: “There is still a case that’s outstanding that if the Premier League win, then Leicester are going to be found in breach of 22/23 by £20million.

“They will have been found to have not cooperated, they will have been found to have not given an early admission and therefore, we can estimate that there is going to be five to six points [deducted] probably.”

Leicester will remain confident they haven’t broken PSR rules, with leading sports lawyer Nick De Marco winning their last case for them.

The loophole the club found was using the fact they were in the English Football League (EFL) at the time their 22/23 charge was issued – after moving the end of their financial year to June 30.

That meant that at the end of their financial year, Leicester were no longer a Premier League club and were officially an EFL outfit – so they couldn’t be judged by top-flight rules.

For Premier League clubs, PSR states that teams can amass losses totalling no more than £105million over a three-year period.

However, in the Championship, total losses are not allowed to exceed a smaller number of £83million.

The Commission decided it was impossible to know exactly when they went over allowable losses due to becoming an EFL team before the end of the financial period that ended in June 2023.

Leicester will continue to argue their case, but things between the club and the Premier League are set to drag on.

And talkSPORT’s Simon Jordan believes the Foxes should be sanctioned after evading a punishment multiple times.

Speaking live on White and Jordan, the former Crystal Palace owner said he thinks Leicester should be sanctioned.

“Leicester will be thrilled,” he stated. “They evaded consequence when they dropped into the Football League because it went under their governance.

“They evaded the obligation of providing the Football League with ongoing forecasts.

“They’ve evaded the Premier League and now the Premier League again.”

Jordan continued: “I think the governance in the Premier League is flawed, but the governance that exists at the moment is being circumnavigated by legal constructs.

“I’m not entirely sure I’m comfortable with it. I think Leicester should be sanctioned.

“Most conventional wisdom felt that this time around, it was going to stick. Most people felt the Premier League had the bit between their teeth not to look like fools, as did the Football League.

He would then go on to later say: “They should be sanctioned, they’ve got away with it and I think they should be relegated.”