Leicester City have been warned that they face breaching the financial rules for this season and are likely to have to sell players to avoid a points deduction next season.
A series of financial losses has put Leicester in serious
danger of a breach even if the Sky Bet Championship leaders are promoted back
to the Premier League this season.
The EFL has confirmed its independent club financial
reporting unit (CFRU) 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”.
Leicester are allowed to lose up to £83 million over three
years — £70 million for two years in the Premier League and £13 million for a
year in the EFL.
Their 2021-22 accounts showed a £92.5 million loss for that
season, and another big loss is expected for the 2022-23 accounts due to be
announced this month. Clubs’ spending on academies, women’s football and
facilities are exempt from the PSR calculations.
It has also been claimed that Leicester breached the Premier
League’s £105 million limit for their most recent three-year period in the top
flight, but that, because of being relegated, they avoided similar charges to
Everton and Nottingham Forest.
The EFL is planning to close a loophole in its regulations
after a ruling that Leicester did not have to explain via a business plan how
they would deal with the expected breach of spending rules. Leicester argued the rule did not apply to
their case and the matter was referred to an independent panel, which found in
the club’s favour.
“The club argued that . . the CFRU had no right to require a
business plan in respect of season 2023-24. The independent club financial
reporting panel concluded that under the rules as currently written, the club
was under no obligation to submit and agree to a business plan.”
Leicester welcomed the decision and confirmed they remain in
discussions with the authorities over PSR calculations, adding: “The club
remains committed to seeking an appropriate overall outcome in this matter.”
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