Leicester City promotion hopes dented by fresh legal blow
Leicester City’s hopes of an immediate return to the Premier League have been dented after it was ruled that they could face a points deduction in the Championship next season.
A tribunal agreed that top-flight chiefs did have the power to charge Leicester with breaches of spending rules in the 2023-24 season, despite them being in the second tier, because the regulations allow for the Premier League to take up the matter when a club is promoted.
However, it also upheld a previous decision that the Premier League could not bring charges against Leicester for the 2022-23 season on the grounds that, due to a loophole in the rules, they were technically no longer a top-flight team when they filed their accounts.
As a result, the Premier League has charged them with overspending in 23-24, failing to provide accounts by a set deadline and a lack of cooperation. An independent commission will determine what, if any, punishment they should get.
It is the latest episode in a long-running legal battle between Leicester and the Premier League over its profitability and sustainability regulations (PSR).
Such disputes over jurisdiction should be a thing of the past as the EFL, which runs the Championship, League One and League Two, has since voted to align its PSR rules with those of the top division.
“Consistent with its previous commitments, the club intends to engage cooperatively in this matter now that the Premier League’s jurisdiction has been established for the period ending FY24,” read a Leicester City statement.
“However, we will not be able to comment further on these proceedings until they are concluded, due to their confidential nature.”
The latest verdicts threaten to worsen the financial predicament of Leicester, who reported losses of £90m in 22-23 and £19m in 23-24.
Any points deduction would make escaping from the notoriously competitive Championship even harder and condemn the club to more years without the Premier League’s minimum central distribution of £100m.
Leicester are already likely to need to sell their most valuable assets, such as Wilfried Ndidi and Mads Hermansen, this summer. Other players face steep pay cuts upon relegation, while record goalscorer Jamie Vardy has announced his departure.
“Leicester will be needing more than a new striker to fill Jamie Vardy’s boots next year – they will also need a sharp-shooter in front of an arbitration panel,” said Yasin Patel, a barrister at Church Court Chambers.
“Following significant losses in the past two years, it was inevitable that the club would face charges. The fact that it has submitted late accounts and not provided full and proper assistance to the Premier League means that it will certainly face some form of punishment – either financial or sporting.
“The decision in Manchester City’s ongoing battle with the Premier League looms in the background, and clubs are waiting to see if the Premier League’s rules are sustainable or need amending. Leicester will be hoping for some encouragement from this decision.”