Leicester City has been referred to an independent commission by the Premier League over an alleged violation of EFL financial regulations during the Championship season of 2023-24.
The team may face repercussions including a potential deduction of points and a fine, yet specifics regarding the timing and execution of these penalties remain unclear.
The tribunal’s ruling centered around two differing conclusions.
It reaffirmed that the Premier League could not sanction Leicester for violating Premier League profit and sustainability regulations for the 2022-23 season, due to the team’s relegation from the top division after that season concluded.
Conversely, it determined that the Premier League have the authority to investigate the team for breaching EFL regulations in the 2023-24 season.
The independent body will also evaluate two additional alleged infractions involving Leicester; specifically, failing to submit financial statements to the Premier League by the deadline of December 31, 2024, and not offering adequate and timely cooperation to the league in response to inquiries.
Leicester, who have faced relegation to the Championship for the second time in three years, stated that “the club plans to collaborate fully on this issue now that the Premier League’s authority has been confirmed for the period ending FY24.”
The announcement of the accusation came from a complex ruling that raises numerous questions regarding its implications and the application process.
An independent panel determined that the Premier League lacked the jurisdiction to penalise Leicester since the club was relegated to the Championship when the accounting period ended on June 30, 2023.
The Premier League expressed its “surprise and disappointment” at the panel’s ruling, while Leicester claimed they were merely ensuring that the regulations were applied in alignment with their written intention.
Subsequently, in April, the Premier League revised its regulations, clarifying that clubs remain subject to its rules, even after relegation.
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The Premier League declared, “The alleged violation pertains to the evaluation period concluding at the end of the 2023-24 season, while the club was a member of the EFL Championship.”
The tribunal confirmed that the Premier League retains the authority to probe a suspected breach of the P&S Rules, as the EFL validly delegated the investigative responsibility to the Premier League in June 2024, at the time of the club’s promotion from the Championship.
“The Premier League continues to exercise its jurisdiction despite Leicester City facing relegation to the Championship at the end of this season.”
According to the current regulations, the Foxes’ losses should not exceed £83 million over the three years leading up to 2023-24.
Premier League teams have a cap of £105 million in losses over a rolling three-year period, but this limit decreases by £22 million for each year a team is outside of the top division.
Leicester’s most recent financial report indicated a deficit of £19.4 million for the period concluding on June 30, 2024.
In their financial statements for the 2022-23 season, Leicester acknowledged a loss of £89.7 million, while in the twelve months leading up to May 2022, they recorded a historic loss of £92.5 million.
These amounts do not factor in ‘add backs expenditures related to infrastructure development and investments in women’s football that the Premier League and EFL consider beneficial for clubs overall.
