Leicester City should face the looming threat of breaching financial regulations and risk a possible points deduction next season (the Foxes could be deducted 10 points, as we saw with Everton this season).
Despite leading the Sky Bet Championship, a series of financial losses puts the club at risk even if it secures promotion back to the Premier League this season.
Under the regulations, Leicester can suffer losses of up to £83 million over three years, with £70 million allowed for two years in the Premier League and £13 million for one year in the EFL.
However, the club’s 2021-22 accounts reveal a staggering loss of £92.5 million and another large deficit is expected in the 2022-23 accounts, which will be revealed shortly. Significantly, expenditure on academies, women’s football and facilities is excluded from the PSR calculations.
Leicester has also faced accusations of breaching the £105 million cap in the last three years in the Premier League. However, relegation from the Premier League has seemingly allowed it to avoid sanctions similar to those imposed on Everton and Nottingham Forest.
According to the Telegraph, the Football League unsuccessfully tried to impose a business plan on the club following serious concerns raised by financial information submitted in November.
Leicester successfully challenged the validity of the rule and claimed its status as a Premier League club last season, with leading sports lawyer Nick De Marco KC reportedly leading the club’s defence.
Leicester continues to argue that the EFL acted outside its remit after the Club Financial Reporting Panel (CFRP) ruled in their favour.
The Foxes put out a statement that read: “Although the Club is pleased that the CFRP’s decision found in its favour, it is concerned that it was necessary for the CFRP to intervene in this way to prevent the CFRU from acting outside of established EFL rules.
“Leicester City confirms it is in discussions with the football authorities regarding its profitability and sustainability calculations. Notwithstanding the CFRP’s decision, the Club remains committed to seeking an appropriate overall outcome in this matter.”