Leicester City have successfully won their appeal against the Premier League, sparking initial relief among fans and club officials alike.
However, while this legal victory ensures they currently avoid a points deduction, the spectre of financial mismanagement looms large, leaving the possibility of future sanctions very much on the table.
Back in March 2024, Leicester City were charged by the Premier League for breaching spending regulations over a three-year period leading up to the 2022/23 season.
This charge placed the club under immense scrutiny, especially considering that both Nottingham Forest and Everton had faced similar accusations during the 2023/24 campaign, resulting in points deductions for both clubs.
Leicester’s initial brush with the league’s financial rules raised fears that they too could suffer a similar fate.
However, following an appeal to an independent committee, the Foxes were cleared of any wrongdoing and, for the time being, have escaped a points deduction.
Despite the reprieve, the long-term consequences of Leicester’s financial dealings remain uncertain. While Steve Cooper and his team may breathe a sigh of relief in the short term, the club’s finances have not yet escaped the Premier League’s scrutiny.
Leicester’s Financial Future Still at Risk
Adam Williams, TBR’s Head of Football Content, Business, Finance & Governance, has provided exclusive insight into Leicester’s precarious situation. His remarks paint a concerning picture for Leicester fans, with the potential for a points deduction still looming large over the current season.
Williams explained, “The Premier League is currently in the process of beefing up its legal team with a couple of new senior hires. I’m no legal expert, but that is no surprise given the implications of this case. It seems like the drafting of the rules has been botched.”
Leicester’s escape from punishment, according to Williams, stems from a technicality related to their financial reporting. The club changed their year-end accounting date ahead of relegation, meaning they were not technically a Premier League club when they submitted their accounts. It was a smart move, but one that highlights the inadequacies of the current regulations.
“Leicester have essentially got off on a technicality,” Williams added.
“They have changed their year-end accounting date in advance of relegation so that they weren’t technically a Premier League club when they submitted their accounts.
“On their part, it is incredibly smart, and you can’t blame them for gaming the rules of a system which many people justifiably think is designed to keep the non-Big Six clubs from showing any ambition.”
Williams continued to discuss how Leicester’s financial practices still put them at risk of a points deduction, despite their recent victory.
“Leicester have accepted that they exceeded the £105m threshold for 2022-23, so that is officially part of their calculation for the current PSR (Profit and Sustainability Rules) assessment period. As they have spent one season of the last three in the second tier, they are allowed to lose £83m over a rolling three-year period. So immediately, you can see that they have a lot of work to do.”
What remains a critical question is whether Leicester can avoid further breaches. The club needed to generate substantial profits from player sales to comply with the EFL’s stricter financial rules after their relegation, and while they made several sales, it is unclear whether they did enough to stay within the limits.
“We don’t have access to their accounts for 2023-24 yet, and we won’t do until early next year,” Williams said.
“But they needed to generate huge, huge profit from player sales to meet the EFL’s PSR threshold, which is lower than the Premier League’s. I doubt that they have made it under the limit even with the deals that they did do. The EFL didn’t think they would. We can’t say for certain, but the margins are very tight.”
The uncertainty over who will hold Leicester accountable, the Premier League or the EFL, only complicates matters.
“But then you are asking, who has jurisdiction here? The Premier League or the EFL?” Williams pointed out, suggesting that this is far from a closed case.
“Either way, I don’t think this is the end of the story. Not by a long shot. My domain is finance and business rather than arbitration, but the analysts whose view I trust on this believe that a points deduction is still possible, perhaps even probable this season.”
Leicester’s Fight for Survival
The prospect of a points deduction could not come at a worse time for Leicester. The club currently sits 15th in the Premier League table, having endured a difficult start to the season. Two losses and a draw in their opening three games have already left them struggling for form.
Matches against Tottenham Hotspur and Aston Villa were always going to be tough, but the manner in which Leicester performed has raised alarm bells.
The loss to Fulham, in particular, highlighted deep-rooted problems, and many observers, including Gary Lineker, have expressed concern over the club’s ability to turn things around.
Should the Foxes face a points deduction before the 2024/25 campaign concludes, their fight to avoid relegation would become significantly more difficult. Lineker has already voiced his fears for his boyhood club, stating that the loss to Fulham was a “wake-up call” and that Leicester “need to improve quickly.”
For Leicester City, the battle is far from over. While they have won this legal skirmish, the war with the Premier League’s financial rules may yet take a toll.
With tough fixtures ahead and the possibility of further sanctions hanging over them, the club’s future in the Premier League looks increasingly precarious. If a points deduction is handed down, Leicester’s fight for survival could become an insurmountable challenge.