---

March 7, 2024

Leicester Exploit Major Loophole in Football Spending Rules to Avoid Sanctions

Leicester City have found a significant loophole in football’s financial regulations, allowing them to avoid punishment this season by simultaneously positioning themselves as a Premier League and EFL club. The club, relegated at the end of the 2022/23 season, bypassed the Premier League’s fast-track system for spending breaches despite being at risk of violating Profit and Sustainability (PSR) rules. Additionally, they dodged EFL financial oversight by arguing they were still considered a top-flight club last season.

In a surprising twist, Leicester informed the EFL in November that they were exempt from its regulations because they were a Premier League club then. However, they were also not required to follow Premier League financial rules when other clubs at risk of breaching PSR had to submit their accounts the following month.

This loophole in football’s spending regulations has allowed Leicester City to dodge potential sanctions, giving them an advantage in their push for promotion back to the Premier League. By exploiting regulatory inconsistencies, they’ve avoided penalties that could have impacted their campaign, raising concerns about the enforcement of financial rules across leagues.

Leicester City could still be charged for breaching the Premier League’s £105 million loss limit during the 2022/23 season. Still, any potential punishment, including a points deduction, would only apply next season. This means their promotion hopes remain intact, unlike Everton and Nottingham Forest, who are facing points deductions this season for overspending during the same period.

The situation has emerged due to new rules introduced by the Premier League last summer to address potential Profit and Sustainability (PSR) breaches earlier in the season, following complaints that Everton narrowly avoided a points deduction that would have resulted in relegation last year. However, Leicester was not subject to the same scrutiny under these new regulations. Clubs at risk of breaching PSR rules were required to submit their accounts by December 31, allowing any sanctions to be applied before the season’s end. Everton and Forest complied, and both were charged with overspending. Leicester, however, was exempt from this early deadline and was not required to submit its accounts until the end of this month.

Leicester’s accounts will likely be reviewed and any potential punishment issued by next season, by which time the club may already be back in the Premier League, as they currently lead the Championship by three points with 10 games remaining. Further complicating matters, Leicester also risks breaching financial rules for the current season, with the EFL’s independent financial reporting unit forecasting that the club is on track to exceed PSR loss limits for the three-year period ending in 2023/24.

In November, the EFL attempted to impose a business plan on Leicester City that would have restricted their spending for the current season. However, the club successfully argued that EFL Rule 2.9 did not apply to them because they were still a Premier League club last season.

Under current regulations, Leicester is allowed to lose up to £83 million over the past three years—£70 million for their two years in the Premier League and £13 million for this season in the EFL. However, their 2021/22 accounts revealed a £92.5 million loss, with further significant losses expected in their 2022/23 financials.

Leicester could avoid PSR charges for the 2023/24 season by generating funds through player sales by the end of June. If they fail to do so, the existing loopholes in the rules could result in Leicester facing two separate punishments in the same season. To prevent similar situations in the future, the Premier League and EFL are reportedly in discussions to better align their financial regulations.

Stand by your favorite team! Head to our site and let them know you’re with them all the way.

Footballnewstoday | La Liga 2 | Saudi Pro League | Major League Soccer | J League | EFL Championship | Brazilian Serie A