Leicester City FC has become the latest club to fall foul of the Premier League’s Profit and Sustainability Rules (PSR), before the team has even secured promotion back into the top flight.
The Premier League confirmed that Leicester has been referred to an independent Commision for an alleged breach of the rules which occurred during the 2022/23 season.
The East Midlands team sits second in the EFL Championship league table at the time of writing (22 March), but is on equal points with table leaders Leeds United. Regardless of whether it finishes first or second, the club will win automatic promotion to the Premier League.
However, it can be expected that should Leicester be found to have breached the PSR rules it will have to start the season with negative points, as the Premier League has issued two notable points deductions this year for PSR breaches.
The first of these saw Everton issued a whopping 10 point deduction for breaching the rules, although this was later reduced to six on appeal. Nottingham Forest was then issued a four point deduction earlier this month.
There are three main rules in the Premier League’s PSR policy – clubs can make allowable losses of up to £5m per season averaged over three, this figure can be increased to £35m a year with owner investment, and transfer costs must be spread out over a maximum of five years.
There has been some criticism of the rules, however, with governance and supporters of smaller clubs – like Everton and Forest, although some fans have taken offence at the description of ‘small club’ – complaining that the rules disproportionately benefit larger, big budget teams.
Leicester City may be able to argue its case via appeal, if a pre-season points decision is decided upon. The fact that the club was relegated to the Championship prior to the introduction of the new Premier league PSR Standards Directions may work in its favour.
Everton have shown that an appeal can be successful due to the reduction of its points deduction from 10 to six. Forest are also hoping to appeal its own penalty by citing a clash of timetables between the rules coming in and the club selling off homegrown talent Brenan Johnson to Tottenham Hotspur for £47m.
