Leicester City has been successful in its appeal case over an alleged breach of the Premier League’s Profit and Sustainability Rules (PSR).
An appeal panel board ruled in favour of The Foxes after the current Premier League side lodged its appeal against the league’s action of breaking the PSR loss threshold over the last three seasons.
Leicester reported annual losses from the 2020/21, 2021/22 and 2022/23 seasons, amounting to £129.4m in losses, £24.4m over the three-year threshold.
This resulted in the Premier League taking action against the club over breaking PSR rules. Leicester was subsequently relegated to the EFL Championship at the end of the 2022/23 season, only recently being promoted back to the English top-flight this season.
This was the main argument placed by the club, who contested the alleged breaches of PSR as due to being relegated last season, PSR rules should not have come into force as its accounting period – 30 June – ended after they were relegated.
Leicester officials believe that due to being an EFL Championship club, the Premier League’s jurisdiction does not apply and therefore neither does PSR.
The appeal panel ultimately sided with Leicester, citing that whilst the club could have sold players over a six week period to make profit and reduce its losses, it is “impossible to determine the precise point in time at which Leicester allegedly exceeded the cumulative adjusted loss threshold of £105m”.
This successful appeal is a major boost for Leicester’s remaining Premier League season as if it was unsuccessful, the club was staring at a possible points deduction, similar to that of Everton last season.
A Leicester City statement read: “Leicester City welcomes the Appeal Board’s comprehensive decision, which supports our consistently stated position that any action against the club should be pursued in accordance with the applicable rules.
“To avoid any misunderstandings which may arise in light of the statement which has been issued by the Premier League in response to the appeal decision, Leicester City wishes to emphasise the finding of the Appeal Panel that, when considering the wording which is actually used in the Premier League rules (in accordance with established principles of English law) the club did not breach the Premier League PSRs for the assessment period ending 30 June 2023.”
The decision has not only left the Premier League disappointed with the verdict, but the appeal board gave a damning indictment on PSR criticising the rules, stating that the “rules are, in relevant parts, far from well drafted” and some parts being described as “confusing”.
The Premier League argued that “common sense” should prevail as they deemed Leicester to be in clear breach of the £105m threshold. But the appeal board argued that they had only based its decision on what the rules explicitly state in writing.
A Premier League statement revealed: “The Premier League is surprised and disappointed by the independent Appeal Board’s decision to uphold an appeal lodged by Leicester City FC regarding the League’s jurisdiction over the club’s alleged breach of its PSR when the club was a member of the Premier League.
“The Appeal Board’s decision effectively means that, despite the club being a member of the League from Seasons 2019/20 to 2022/23, the League cannot take action against the club for exceeding the relevant PSR threshold in respect of the associated accounting periods.”
