Football’s spending rules are facing further scrutiny after it emerged that Leicester have dodged sanctions this season by claiming to be both a Premier League and an EFL club at the same time.
Mail Sport has learned that Leicester have not complied with the Premier League’s new fast-track system for potential spending breaches this season despite being at risk of breaking their Profit and Sustainability rules [PSR] for 2022/23 as they were relegated at the end of that campaign, but also avoided being subjected to an EFL spending plan this year on the grounds that they were a top-flight club last season.
In an extraordinary set of circumstances Leicester told the EFL in November that they did not have to comply with their regulations as they were a Premier League club last season, yet were not forced to abide by Premier League rules the following month when other clubs at risk of a PSR breach had to submit their accounts.
The Leicester case appears to expose a huge loophole at the heart of the football’s controversial spending rules, which the club have exploited to give themselves the best chance of returning to the Premier League this season.
Leicester could still be charged for breaching the Premier League’s £105million loss limits last season, but any punishment and points deduction would apply next season and not jeopardise their promotion hopes, whereas Everton and Nottingham Forest are both facing points deductions this season for overspending during the same period.
The anomaly has arisen after the Premier League introduced new rules for dealing with potential PSR cases last summer following complaints that Everton avoided a points deduction that would have seen them relegated last season, but did not apply them to Leicester.
Under the new regulations clubs at risk of a PSR breach must submit their accounts three months earlier than their rivals on 31 December so that any disciplinary case can be concluded and any sanctions applied by the end of the season.
Everton and Forest both submitted their accounts to the Premier League in December and were subsequently charged with spending breaches for three years concluding with the 2022/23 season, with their cases to be heard over the next few weeks, but Leicester were not required to do so.
Leicester’s accounts must be filed by the end of this month and any punishment will be delayed until next season, by which time they are likely to be back in the Premier League, as Enzo Maresca’s side lead the Championship by three points with 10 games remaining.
To complicate matters further Leicester are also at risk of breaching spending rules for the current season after the EFL’s independent club financial reporting unit concluded the club ‘was forecasting to breach the Profitability and Sustainability Rules (PSR) loss limits for the three-year period ending with financial year 2023/24’.
In November the EFL made an application to make Leicester submit to a business plan which would have limited their spending this season, but the club successfully argued that EFL Rule 2.9 did not apply to them as they were a Premier League club last season.
Leicester are permitted to lose up to £83m over the past three years – £70m for two years in the Premier League and £13m for this season in the EFL.
Their 2021/22 accounts showed a £92.5m loss, and another big loss is expected in their 2022/23 accounts.
Leicester could still avoid PSR charges for 2023/24 by raising funds through player sales by the end of June. If they fail to do so then the anomalies in the rules could have major consequences next season and leave Leicester facing two punishments in the same season.
The Premier League and EFL are understood to be holding talks over how to achieve greater alignment in their regulations to avoid similar situations occurring in the future.
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