Birmingham City's Championship rivals charged by Premier League with alleged PSR breach
Leicester City have seen the dispute over their 2022/23 finances resolved but face an independent commission over 2023/24 numbers
Relegated Premier League outfit Leicester City have been charged with an alleged breach of Profitability & Sustainability Rules.
The Foxes will take their place alongside Birmingham City in the Championship next season and do so with the threat of a points deduction hanging over their heads.
The news comes after City saw a dispute over their 2022/23 accounts brought to an end.
Initially charged, City won an appeal when they successfully argued that the Premier League did not have the jurisdiction to charge them because they were an EFL club at the time the accounting period ended.
The Premier League took that to a tribunal, and while the tribunal disagreed with the appeal board’s decision, the threshold for overturning an appeal board verdict was too great for them to consider a reversal.
However, this latest charge relates to their 2023/24 accounts, when Leicester were in – and indeed won – the Championship, and the club have now been referred to an independent commission where they could face a punishment if the case is proven.
In a statement City said they would ‘engage cooperatively in this matter now that the Premier League’s jurisdiction has been established’.
Their full statement read: “The club is pleased that it successfully defended the Premier League’s challenge to the Appeal Board decision in relation to the PSR assessment period ending FY23, which was the main focus of these proceedings.
“The Premier League’s own rules provide a deliberately high threshold for any challenge to the decision of an Appeal Board.
“In this case, the Appeal Board’s decision was only capable of being overturned if it could be shown to have resulted from a ‘perverse interpretation of the law’ or was a decision ‘which could not reasonably have been reached’
“The Appeal Board decision was reached by a highly experienced panel (including two former Court of Appeal judges) and, although the tribunal may have disagreed with the decision, it dismissed the Premier League’s challenge, finding (consistent with the arguments made by the Club all along) that the Appeal Board decision ‘could not sensibly be seen as resulting from a perverse interpretation of the law’.
“The tribunal also concluded that the Premier League was successful in establishing jurisdiction on one of the two grounds argued by the Premier League with respect to the assessment period ending FY24, and the Premier League has now referred this to an independent Commission.
“Consistent with its previous commitments, the club intends to engage cooperatively in this matter now that the Premier League’s jurisdiction has been established for the period ending FY24.
“However, we will not be able to comment further on these proceedings until they are concluded, due to their confidential nature.”
The Premier League also released a statement which read: “Following an Arbitration Tribunal’s decision concerning jurisdiction, Leicester City FC has now been referred to an independent Commission for alleged breaches of:
- the EFL Championship Profit and Sustainability Rules (P&S Rules) for Season 2023/24 - the club’s obligation to provide its Annual Accounts to the Premier League by 31 December 2024 - the club’s obligation to provide full, complete and prompt assistance to the Premier League in response to the League’s inquiries
“The Arbitration proceedings looked at (a) the Premier League’s jurisdiction to investigate an alleged breach by the club of the EFL’s P&S Rules for Season 2023/24; and (b) a previous Appeal Board decision regarding the League’s jurisdiction in respect of a breach of the Premier League’s Profitability and Sustainability Rules (PSR) for Season 2022/23.”
Birmingham City have their own experience of independent commissions having been docked nine points in the 2018/2019 season after breaching EFL loss levels by nearly £10m over a three year period from 2015-2018.
They were also handed a suspended two-point deduction for rule breaches during an unsuccessful takeover attempt, which came off the books at the end of the 2023/24 season.
As one of potentially only three teams in receipt of parachute payments, depending on if Sheffield United go back up to the Premier League, Leicester will likely start the 2025/26 Championship campaign as one of the favourites for promotion.
However, any potential points deduction – bearing in mind the charge has not yet been proven – could affect this status and open the door for other challengers.