Leicester City has successfully avoided a points deduction for the current season after winning an appeal that prevented the Premier League from charging them with alleged breaches of the Profit and Sustainability Rules (PSR) for the financial year ending June 30, 2023.
In March 2024, the Premier League originally charged Leicester for exceeding the allowable £105 million losses over a three-year monitoring period.
However, Leicester, which had been relegated to the Championship for more than nine months and was an English Football League (EFL) member at the time, contested the Premier League’s authority to penalize them.
Initially, this challenge was dismissed, but the Midlands club, owned by Aiyawatt Srivaddhanaprabha, later won an appeal.
This victory prevents the Premier League from pursuing charges, thereby avoiding a points deduction for Steve Cooper’s side in the current campaign.
Successful Appeal Overturns Decision
According to Premier League regulations, clubs are allowed to use the window between May 31 and July 31 as a reference point for their annual financial records.
Leicester had previously selected May 31, but in 2023, they adjusted the date to June 30, which is permitted under the rules.
However, following their relegation on June 14, Leicester closed the financial year on June 30 as an EFL club.
The Appeal Board determined that the Premier League could not hold Leicester accountable, particularly as their financial records were still being finalized under EFL jurisdiction.
In their ruling, the Appeal Board noted, “The Premier League underestimates the significance of the time gap between Leicester ceasing to be a Premier League club and the end of its accounting period.
While there was an accounting process to be completed, it had to follow, and could not precede, Leicester’s accounting reference date of June 30, 2023.”
The judgment further highlighted the importance of the period between Leicester’s relegation and the end of the financial year: “During this time, Leicester continued to operate its business.
It was possible that the club could have sold players during the fortnight beginning on June 14, 2023.
A club with an accounting reference date as late as July 31 could have had up to six weeks of trading to reduce expected losses.
Beyond potential player transfers, the club could have secured sponsorship agreements, with payments made before the year-end, thus reducing accounting losses.”
The Appeal Board concluded that a club can only be held liable for actions that occurred while it was a Premier League member and subject to its rules.
In this case, any alleged breaches took place after Leicester had already exited the Premier League.
Consequently, the charges were dismissed, and Leicester City avoided any sanctions for the 2023-2024 season.
