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Ian Nacho

Leicester at risk of another Premier League PSR charge over latest accounts

By Ian Nacho, in Leicester City Forum

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AKCJ

AKCJ

Posted
Posted
5 minutes ago, ClaphamFox said:

Embargos are placed on press releases, not leaks.

It's very likely that the press have been briefed by now.

Bert

Bert

Posted
Posted
11 minutes ago, ClaphamFox said:

Embargos are placed on press releases, not leaks.

You knew what I meant. 

Bilo

Bilo

Posted
Posted
9 minutes ago, happy85 said:

 

 

7 minutes ago, happy85 said:

Looks like a another loophole found 

Leicester 2

(Di Marco, Sloppy Legal Wording)

Premier League 0

  • Haha 1
Mickyblueeyes

Mickyblueeyes

Posted
Posted
10 minutes ago, happy85 said:

Looks like a another loophole found 

The courts have and will continue to do so interpreted commercial leading wording on a "plain ordinary basis". There is no reason an independant tribunal would depart from this. If this is the PL reliance, they will lose and be very foolish to refer the matter to the tribunal. The PL have a 14 strong legal team and generally they are lawyers with impressive backgrounds. An oversight of this nature is astonishing. It was either passed off without internal legal review or someone has ****ed up. 

 

PL legal team: https://solicitors.lawsociety.org.uk/organisation/people/504064/premier-league

les-tah

les-tah

Posted
Posted (edited)

We really need this to be everton for the sake of survival. as we are truly in the gutter and will struggle to survive on our own performances.

Edited by les-tah
  • Like 1
  • Popular Post
kingpower

kingpower

Posted
  • Popular Post
Posted

Good morning everyone, and welcome to PSR week. 

The Premier League is expected to announce today which clubs are facing charges for breaking Profitability and Sustainability Rules (PSR) in the 2021-24 reporting cycle, and talking to various people who know more than we do about this sort of stuff it sounds increasingly likely that they’ve all found ways to comply. 

The biggest question from interested observers is how on earth Leicester City are going to come in under the line. 

The Foxes displayed their vulpine cunning in avoiding a sanction last year despite breaching the PSR limit by nearly £25m, with Nick DeMarco KC helping them get off a charge after they moved their accounting year and were deemed to no longer be under the jurisdiction of the Premier League after their relegation. 

Some expect Leicester to find a buyer for their old training ground or another land parcel they own, but it may not even be necessary. 

While owners and fans in the top two divisions (as well as football finance nerds) are waiting with baited breath, there is intrigue over what is increasingly forecast to be a lucky escape, with the club privately expressing considerable confidence that they will not be charged. 

Leicester have already narrowly avoided one PSR charge - and an inevitable points deduction given the Everton and Nottingham Forest precedents - this season. The club were charged by the Premier League with breaching their £105m three-year loss limit by £24.4m for the 2020-23 period last March, but the case was never heard. (During seasons spent in the EFL, that £35m-a-year threshold is reduced to £18m.) 

Screenshot_2024-09-04_at_16.35.23.png?t=

News of Leicester’s fate is eagerly awaited

After launching an appeal, DeMarco and Leicester's lawyers persuaded an independent commission that as they were relegated at the end of the 2022-23 season they were not a Premier League club when they submitted their accounts 30 June 2023, so could not be charged. 

With that previous, if unpunished, £24.4m overshoot hanging over them, Leicester's finances remain stretched following pre-tax losses for the last two years of £92.5m and £90m, before removing the infrastructure spending and other costs that are deductible for PSR purposes. 

Football finance expert Kieron O’Connor, who has written the well-regarded Swiss Ramble blog since before PSR was even a twinkle in the Premier League's eye, has forecast that despite raising £75m through player sales last summer, Leicester will be around £12m in breach.

With Leicester bullish of avoiding a breach on the eve of the announcement, there are all sorts of rumours doing the rounds about how they may have done so, such as the sale of property assets in a manner previously exploited by Chelsea, whose own compliance with PSR over this period is likely to be highly contingent on last summer's sale of their women's team to a sister company, Blue Co 22, and how it is assessed by the league. 

A more straightforward explanation for Leicester's confidence however is the possibility that their retained counsel may have identified another legal loophole which entitles Leicester to claim the full £35m allowance in their first season back in the Premier League. 

This possibility was first highlighted on X by an Everton fan last September and was written about extensively by The Athletic's Matt Slater this weekend. That theoretical extra cushion could be hugely significant for Leicester, and enable them to escape a PSR charge despite being significantly over what was assumed to be the threshold for the second successive season. 

That Everton account spotted an apparent inconsistency in the Premier League handbook, which states that a club's PSR allowance “will be reduced by £22m for each season covered by T-1 and T-2 for which the club was in membership of the Football League.” 

T-1 and T-2 refer to the first two seasons of the PSR accounting period, but there is no mention in the Premier League handbook of the PSR threshold being reduced in the event of EFL membership in the most recent season, T. 

shutterstock_2279382485.jpg?t=1732151698

The Premier League rulebook is once again under the microscope

No-one at the Premier League was willing to comment or even discuss this issue yesterday, but the consensus from sports lawyers canvassed by FootBiz was that any anomaly was an oversight rather than a deliberate policy. This apparent anomaly has not arisen before, as no club recently promoted to the Premier League has been in danger of a PSR breach, so the size of the allowance has not been particularly relevant. 

While Forest were charged (and ultimately docked four points) as a result of their post-promotion spending splurge in the summer of 2022, the charges were not issued until the 2023-24 season, making their promotion season T-1. Forest are among the clubs monitoring the Premier League's actions with interest, and will be seriously unhappy if Leicester have benefitted from a bigger PSR allowance due to an ambiguous rulebook. 

Ipswich are also unlikely to be thrilled at discovering that they could have spent more on transfer fees following promotion last summer, as they were working to a PSR threshold of £39m for the last three years based on two seasons in League One and one in the Championship. For their part, the EFL rules are clearly set out in Appendix 5 of their handbook that the loss limit is £13m in the Championship, but it is the Premier League who are enforcing the rules in this instance. For the second time in less than six months poorly drafted rules may have condemned them to an embarrassing defeat. 

We expect to know by the end of play today… but there’s lots of other news too, including some more fun in France, rivals protesting Barcelona’s rule-bending and a lot more besides.

  • Haha 6
filbertway

filbertway

Posted
Posted
58 minutes ago, RonnieTodger said:

The elephant in the room with all this shit is that player wages are absolutely out of control.

 

It’s mad that clubs actively want to lose 100s of millions of pounds every year. They get gifted £120m+ by TV companies every year and still contrive to piss it all up the wall.

 

The obvious answer is some kind of salary cap. Of course a lot of the players would piss off to Saudi, but I don’t see how this is sustainable. 

Im glad someone else is saying this. I regularly make this point and nobody seems to agree or care lol

 

pkonline

pkonline

Posted
Posted (edited)

It's a sign of the times isn't it that this kinda stuff is now an annual thing. Bit like transfer window deadline day. Everyone eagerly awaiting news on social media, people speculating, and then gassing.

 

The football seems to matter less and less.

Edited by pkonline
  • Like 3
Bilo

Bilo

Posted
Posted

PSR is going to end up being replaced, I think.

 

It's hated by most fans, inherently anti-competitive and riddled with loopholes that means clubs with deep pockets, crafty business practices and clever lawyers can get around them while honest clubs just trying to comply with the spirit of the rules suffer.

  • Like 3
les-tah

les-tah

Posted
Posted
1 minute ago, Bilo said:

PSR is going to end up being replaced, I think.

 

It's hated by most fans, inherently anti-competitive and riddled with loopholes that means clubs with deep pockets, crafty business practices and clever lawyers can get around them while honest clubs just trying to comply with the spirit of the rules suffer.

This would be great but Uefa rules are even stricter then ours so dont know how they can be reduced without uefa doing it etc

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