No Premier League clubs have been charged with breaches of the Premier League’s profitability and sustainability rules (PSR) — though Leicester City could still be sanctioned.
Leicester remain in a legal battle with the Premier League over club losses incurred during the three-year accounting period ending in 2023-24.
All clubs who had made aggregate losses over the first two accounting periods were required to submit their accounts on or before December 31 with the league committing to informing any in breach within a maximum of 14 days.
No clubs were charged, the Premier League has confirmed, but Leicester are still at risk amid ongoing proceedings.
The Premier League said on Tuesday morning: “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.”
Leicester remain in an ongoing legal battle with the league (Marc Atkins/Getty Images)
The Athletic reported on January 8 that, although their 2023-24 accounts had not yet been published on Companies House, a number of Leicester’s rivals expected the club to be in breach of PSR.
Leicester recorded a pre-tax losses of £89.7million for 2022-23 and £92.5m in 2021-22. The club’s account for 2023-24 are yet to be announced.
In September, Leicester won an appeal against a decision which could have resulted in a points deduction following an alleged PSR breach during the reporting period ending in 2022-23.
Leicester were relegated from the Premier League to the Championship at the end of the 2022-23 season, and the club successfully argued that the point of the breach was the end of their accountancy year in 2023, which was on June 30 — two weeks after they handed over their membership in the Premier League to Luton Town.
Leicester’s argument was they could not be held for a breach of Premier League rules when they were not a Premier League club at the point of the breach.
The Midlands club are permitted to lose £83m for the three-year accounting period ending in 2023-24, having spent two seasons in the Premier League and one in the Championship. Premier League clubs are allowed to record losses of £35m per season, and a maximum of £13m per season is permitted in the Championship.
Everton and Nottingham Forest were both given points deductions last season for PSR breaches.
How did we get here?
Leicester did not secure any income from European football in 2022-23 and dropped from eighth in the Premier League table in 2022 to 18th in 2023, which equates to a loss in merit payments of about £30m.
They did bank two large transfer fees in the 2022-23 financial year with the sales of Wesley Fofana to Chelsea and James Maddison to Tottenham Hotspur.
Leicester then sold Harvey Barnes, Timothy Castagne and George Hirst during the 2023-24 financial year, bringing in more than £50m, but they also spent more than £20m on new signings and held onto several high earners.
The £30m sale of Kiernan Dewsbury-Hall to Chelsea is thought to be included in 2023-24 accounts and Leicester also received compensation from Chelsea for the departure of manager Enzo Maresca and his staff when he took over at Stamford Bridge in June, estimated to be worth up to £10m.
However, the club spent the 2023-24 season in the Championship, meaning they missed out on the Premier League’s lucrative media rights income.
The English Football League (EFL) stated last season that Leicester were projected to be in breach for the three-year cycle ending with the 2023-24 season and placed a registration embargo on the club.
What are profitability and sustainability rules?
All Premier League clubs are assessed for their adherence to the competition’s profitability and sustainability rules each year.
Their compliance with said rules is assessed by reference to the club’s PSR calculation, which is the aggregate of its adjusted earnings before tax for the relevant assessment period.
Under the PSR, clubs are allowed to lose a maximum of £105m over three seasons (or £35m a season) but certain costs can be deducted, such as investment in youth development, infrastructure, community and women’s football.
Championship clubs are permitted to record losses of £13m per season.
What happened in other cases of PSR breaches?
Forest were handed a four-point deduction in March following a PSR breach for the reporting period ending in 2022-23. They were allowed permissible losses of £61m ($77.6m) as a promoted club in 2022-23 but were found to have exceeded that threshold by £34.5m.
Everton had an initial 10-point deduction reduced to six in February for a PSR breach during the reporting period ending in 2021-22, having been over the PSR threshold by £19.5m.
Everton were docked a further two points in April after admitting to a breach of £16.6m upon submission of their 2022-23 PSR calculation.
(Top photo: Marc Atkins/Getty Images)
