Leicester City exploit loophole in football’s spending rules to avoid punishment

This might come back to bite them.

According to a report from the Mail Online, Leicester have not complied with the Premier League's new fast-track system for potential spending breaches this season. They have avoided punishment by claiming to be both a Premier League and an EFL club at the same time.

The club are 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 because they were a top-flight club last season.

Incredibly, 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 Foxes could 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 affect their promotion hopes.

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.

According to the new rules, 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 Nottingham Forest have submitted their accounts to the Premier League in December, and both clubs have been charged with spending breaches but Leicester have to file their accounts by the end of this month so any punishment they may get will be for next season.

It is looking likely that Enzo Maresca's side will be back in the Premier League by then as they currently sit top of the Championship table, with 10 games remaining in the season.

It gets more complicated when you consider that 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.

The club are permitted to lose £83m over the past three years - £70m for two years in the Premier League and £13 million for this season in the EFL, but their 2021/22 accounts showed a £92.5m loss, and another big loss is expected in their 2022/23 accounts.

Leicester's best hopes of avoiding any PSR charges would be by raising the funds through player sales at the end of June, but if they fail to do so, then the club could face two punishments in the same season.