Leicester City could face charges from the EFL for breaching Profit and Sustainability (PSR) rules if they suffer relegation from the Premier League this season.
This possibility was suggested by financial expert Stefan Borson, who spoke exclusively to Football Insider about the club’s precarious situation.
According to Borson, Leicester’s status as a Championship side would come into play on 30 June last year if they were no longer a Premier League club by that date.
In March, the club was charged with breaching the Premier League’s PSR regulations for the 2022-23 season, and a points deduction was the expected consequence.
Leicester, however, countered that they were no longer a top-flight club when they filed their accounts on 30 June, having been relegated to the Championship.
The club hoped this argument would protect them from Premier League sanctions, but an independent commission dismissed their claims in July. The commission ruled that Leicester could still be charged by the Premier League for the breach.
Leicester received a boost on 3 September when they announced that their appeal against the ruling had been successful. Yet, despite this victory, the situation remains murky.
According to a report from The Guardian on 18 September, the EFL is keen to pursue charges against Leicester if the club once again drops to the Championship.
Borson believes Leicester have found themselves in a precarious position. Speaking to Football Insider, he said: “The lines are blurred. We will just have to see, but I think it’s probable that they could be charged. The flip side of Leicester’s argument that they weren’t a Premier League team on 30 June 2023 must be that, therefore, they were an EFL team on that day.”
Borson explained that, given Leicester’s relegation to the Championship, it would be reasonable for the EFL to assert some jurisdiction over the club’s finances for the three-year period leading up to 30 June.
“That does seem to suggest the EFL would have some jurisdiction for that three-year period ending on that date,” he noted.
Leicester will likely mount a fresh defence, but Borson believes the club faces significant hurdles.
“Clearly, Leicester will come up with arguments why that’s not true, and I assume will put it to another panel, who will have to make a decision,” he said. “But on the face of it, it does seem logical that there is no position where you are a member of no league.”
He added: “It seems pretty obvious that if you are not a Premier League team, then you are an EFL team at that point because you have been relegated to the EFL. We will have to just see how Leicester get around that situation. But on the face of it, I think they have got quite a tricky position now that they have argued definitively that they were not a Premier League team.”