Key Points
- Speculation that Leicester City FC broke PSR regulations in 2021-22 the season
- The football team incurred a £92.5 million loss
- Leicester City face a heavy fine and a points deduction
- Despite allegations, the football team's main goal is to secure promotion to the Premier League for next year
Leicester City has been charged by the Premier League with financial mismanagement based on their time in the top flight.
The Foxes have been referred to an independent commission over an alleged breach of the profit and sustainability rules, having failed to submit account audits during the 2022-23 season. The PSR allegedly broken by Leicester City could lead to a heavy points deduction next year.
What have The Foxes done wrong?
The Premier League introduced profitability and sustainability rules at the end of last season that allow all top-flight teams to make a maximum total loss of £105 million over a three-year period. Although recently relegated to the Championship, Leicester City have found themselves being charged by the Premier League for failing to submit their audited accounts for the 2022-23 campaign.
Speculation that Leicester City is breaking PSR rules comes from a tough 2021-22 season, during which a massive £92.5 million loss was recorded. The Foxes are now the fourth team to be charged for breaking PSR rules, despite already being relegated to the Championship by the time the new PSR laws were introduced.
A spokesperson for the club said: "Leicester City is surprised at the actions the Premier League has taken today. The club is extremely disappointed that the Premier League has chosen to charge LCFC now, despite the club’s efforts to engage constructively with the Premier League in relation to the matters that are the subject of this charge, even though LCFC is not currently a Premier League club.”
In November, the EFL also attempted to impose a business plan on the newly relegated side after the league’s independent club financial reporting unit highlighted concerns about Leicester’s projected forecast for the 2023-24 season.
Afterwards, the club was quick to release the following statement: “LCFC remains willing and eager to engage constructively with the Premier League and the EFL to seek the proper resolution of any potential charges by the right bodies and at the right time. The club continues to take careful advice about its position and, if necessary, will continue to defend itself from any unlawful acts by the football authorities, should they seek to exercise jurisdiction where they cannot do so, as occurred earlier this year.”
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What could this mean for the Championship high-flyers?
At the start of the season, many online betting sites had tipped Leicester as the favourites for a quick return to the Premier League. Now, with just nine games left to play, The Foxes sit alongside Ipswich Town and Leeds United comfortably at the top of the Championship.
A return to the Premier League would see a significant increase in revenue for the club. According to stats from 2021, this could include over £135m for winning the league and roughly £80m built up from commercial revenue, UK and international TV rights, and equal share profits throughout their first season back in top-flight football.
Unfortunately, if the allegations are confirmed to be true, Leicester City will be likely to face a heavy fine and a severe points deduction that could dent their final position next year. You only need to look at how that has affected Nottingham Forest and Everton this season to see the effect this could have on any possible return for The Foxes.
Everton initially had a ten-point deduction taken from them back in November that was later reduced to six after an appeal; however, a further PSR punishment could be on the cards for The Toffees based on their financial position during the 2022-23 season. Nottingham Forest is the latest team to have been docked points, losing four from their total tally, dropping them into the relegation zone.
It seems that the reason both Everton and Nottingham Forest have already received their punishments is due to both teams still being in the top flight of football. As already touched upon, the introduction of the profitability and sustainability rules came into place after Leicester had already been relegated, leading to a delay in any outcome or PSR punishment while a timeline is established.
The Premier League has stated that: “Leicester City were relegated to the EFL Championship prior to the introduction of the Premier League's new Standard Directions, which prescribe a timeline within which PSR cases should be heard. Therefore, the proceedings will be conducted in accordance with a timetable to be set by the independent commission, and its final decision will be published on the Premier League's website.”
Of course, the EFL could end up imposing any potential fines and PSR punishments for Leicester City’s financial mismanagement, should the club fail to gain promotion back up to the Premier League.
Will a points deduction be taken from Leicester City this season?
Based on the League’s latest statement, it seems very unlikely that Leicester City will receive a points deduction this season. In fact, it looks unlikely that any PSR punishment for Leicester City will be confirmed before the summer – great news for any of you who have made use of any betting offers on promotion candidates and league winners at the start of the season.
Although the outcome may hold serious implications for the club next year, Leicester City has made it clear that its main focus is on securing promotion and getting themselves back into the Premier League: "The club thanks its supporters for their understanding in this matter and for their continued support for our team, whose success on the pitch during the final weeks of the season remains our primary focus.”
Do you think it’s fair that Leicester City may be charged with financial mismanagement despite the new rules being added after they were relegated? We’ll keep you updated on the eventual outcome here at betting.co.uk.
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