“Leicester City Avoids Premier League Sanctions Over PSR Breach: Key Legal Ruling Explained”
Leicester City has successfully won a significant legal case against the Premier League after facing accusations of violating Profitability and Sustainability Rules (PSR).
The club was at risk of being docked points this season due to several years of excessive spending, with the Premier League determining that they exceeded the three-year loss limit by £24.4 million between 2019 and 2023.
However, the ruling now confirms that Leicester will not face any penalties, allowing them to avoid points deductions after making key player sales toward the end of the 2023-24 financial year.
Football finance expert Dr. Rob Wilson sheds light on how Leicester avoided the penalty, the future implications for PSR, and what it could mean for Manchester City’s upcoming case.
Leicester’s case hinged on a technicality regarding the timing of the PSR period’s conclusion.
According to Premier League rules, a PSR breach is determined when a club’s financial accounts show that, as of June 30th of any given year, it has exceeded the £105 million loss threshold. While Leicester did surpass that limit, the situation became complex due to their relegation during that season, which led to their transfer of Premier League status to Luton Town on June 13, 2023.
This meant that by the June 30th deadline, Leicester had become a Football League (EFL) club and were no longer under Premier League jurisdiction, even though they had spent 98.4% of the regulatory period in the top tier. The outcome largely hinged on the specific wording of the PSR rules.
Adding to the complexity, Leicester extended their financial year-end date from May 31, 2023, to June 30, 2023, aligning it with their official exit from the Premier League. Leicester claimed this extension gave them additional time to meet PSR requirements, a point the Premier League did not contest. This fortunate timing became a crucial element of their successful defense.
While the verdict does not rule out the possibility of Leicester facing penalties for an alleged breach during the 2023-24 season, the club seems confident that the £30 million sale of academy player Kiernan Dewsbury-Hall to Chelsea at the end of June has safeguarded them.
The Premier League has expressed its “surprise and disappointment” at Leicester’s avoidance of a seemingly unavoidable penalty, which raises questions about the future of PSR enforcements.