Kiernan Dewsbury-Hall’s future with Leicester City is uncertain as the club faces a looming deadline to comply with the EFL’s Profit and Sustainability Rules (PSR). With just 48 hours left before the end of the accounting period on Sunday, June 30, Leicester City must generate cash to meet these financial regulations. Selling Dewsbury-Hall, a standout midfielder, appears to be the most viable solution, and negotiations with Chelsea are underway.
As an academy graduate, any revenue from Dewsbury-Hall’s sale would be recorded as pure profit, significantly easing Leicester City’s PSR concerns for the 2023-24 season. The EFL had anticipated financial issues for the club, placing them under a registration embargo in early spring.
While the £10 million compensation from Chelsea for manager Enzo Maresca and his staff provided some relief, it wasn’t sufficient to fully resolve the club’s financial challenges. Consequently, selling Dewsbury-Hall remains the most efficient way to generate the necessary funds.
Dewsbury-Hall, 25, has previously expressed a desire to stay at Leicester City, which reportedly halted a potential move to Brighton. However, he is more open to reuniting with Maresca at Chelsea, and Leicester City is willing to consider the deal if their valuation is met.
A player trade as part of the deal would not affect Leicester City’s PSR compliance. While all profit from a sale is recorded in the current year’s accounts, the transfer fee for a new signing is distributed over the length of the player’s contract for PSR purposes.
For instance, if Dewsbury-Hall were sold for £40 million, all of that amount would be immediate profit for Leicester City, as he was an academy player with minimal book value. Conversely, if a Chelsea player were acquired for £15 million on a five-year contract, only £3 million would be counted in this year’s accounts.
To comply with PSR for the 2023-24 season, Leicester City’s losses must not exceed £13 million, the Championship’s threshold. Typically, PSR calculations are based on a three-year cycle, but the EFL operates with a double-jeopardy rule, meaning clubs previously in breach have their losses capped.
Leicester City has been charged by the Premier League for the three-year cycle ending in 2023. If found guilty by an independent panel, the club’s losses for the first two years of the EFL’s three-year cycle would be capped at £35 million. Thus, Leicester only needs to meet the £13 million threshold for the most recent season.
Selling Dewsbury-Hall would enable Leicester City to comply with PSR and avoid a second potential sanction. If found guilty of the March charge, Leicester could face at least a six-point deduction, as evidenced by the cases of Everton and Nottingham Forest.
Failure to comply with PSR for the 2023-24 season would lead to uncertain penalties. The Premier League has never deducted points on the EFL’s behalf, so a fine seems more probable. However, such a fine could further complicate Leicester City’s ability to meet PSR requirements in the future.
