Leicester won an appeal for alleged breach of the Profitability and Sustainability Rules (PSR).
The decision by the appeals board all but ended the prospect of Leicester being given a points deduction this season.
The Premier League, which said it was “shocked and disappointed”, is unlikely to appeal this decision as there is a very high legal bar to do so, and this case is unlikely to reach that high bar.
The original Premier League case stated that Leicester had lost over three seasons up to the 22/23 season by £129.4m – £24.4m more than the £105m loss allowed over three seasons.
Leicester believe that the Premier League does not have the authority to punish them in this way, as they have been relegated to the EFL when the accounting period ends, so they are no longer bound by Premier League rules.
The Foxes also insist that they did not violate the PSR in the first place.
The appeals board ruled that, because Leicester’s accounting period ended after relegation, the Premier League could only predict whether Leicester had breached the PSR, and could not say whether the club had breached it.
In its written reasons, the appeal board said: “We hope (the club) can sell the player within two weeks from June 14, 2023.” And in fact, because of Leicester’s accounting period, the appeals board concluded “(Leicester) could have some six weeks of trading to reduce the expected loss.”
A key part of Leicester’s submission to the appeals board said that “clubs are only subject to Premier League rules when they are members of the Premier League”.
The appeals board agreed, saying it was “impossible to determine the precise moment when Leicester were charged with exceeding the set cumulative loss threshold of £105m”.
The appeal board stated that Leicester moved the accounting period to a date beyond the time when they were relegated, and although this was not intentional, it meant that the accounting period was outside the time when they were in the Premier League. and bound by its rules.
If they do not move the accounting period, and give the Premier League part to Luton Town, Leicester may be punished.
As a result, since Leicester were relegated, they could not be punished for their arbitrary accounting period.
The Premier League insisted that “common sense” made it clear that Leicester had breached the PSR, but the appeals board said it could not refer to common sense, only what is clearly stated in the rules.
The appeals board criticized the PSR, saying: “The rules, in the relevant parts, are far from well-designed.”
In the grounds written by the appeals board, they described the PSR section as “confusing”.
Premier League ‘shocked and disappointed’
Statement made by the Premier League:
“The Premier League is shocked and disappointed by the decision of the independent Board of Appeal to uphold the appeal lodged by Leicester City FC against the League’s jurisdiction over the alleged breach of the Profitability and Sustainability Rules (PSR) by the club when the club was a member of the Premier League.
“In March this year, the Premier League referred Leicester City to an independent Commission for alleged breaches of the PSR in relation to the assessment period at the end of the 2022/23 financial year. After submission, the club’s financial results showed that it had exceeded the £105m allowed threshold for the period which is appropriate.
“Leicester City then challenged the authority of the Commission to hear the case on the grounds of jurisdiction. This challenge was rejected by the independent Commission, a decision submitted by Leicester City.
“The appeal was made by an independent Board of Appeal on the grounds that the club’s accounting period ended on 30 June 2023, after which point the club ceased to be a member of the League.
“The decision of the Board of Appeal effectively means that, even if the club is a member of the League from Season 2019/20 to 2022/23, the League cannot take action against the club for exceeding the relevant PSR threshold in respect of the relevant accounting period.”
Received by Leicester
Statement made by Leicester City:
“Leicester City welcomes the full decision of the Appeal Board, which upholds its consistent position that any action against the club must be taken in accordance with the applicable rules.
“In order to avoid any misunderstandings that may arise due to the statement issued by the Premier League in response to the appeal decision, Leicester City would like to emphasize the finding of the Appeal Panel that, when considering the correct wording used in the Premier League rules (in accordance with the established principles of English law) the club did not infringe Premier League PSR for assessment period ending 30 June 2023.
“In its decision, the Appeal Board (which is made up of a panel of three experienced senior lawyers, two of whom are former Court of Appeal judges) identified flaws in the drafting of the Premier League rules.
“In challenging the Premier League’s attempt to charge Leicester City, the club is only seeking to ensure (in the interests of providing consistency and certainty for all clubs) that the rules apply based on the correct way they are written.”
