Leicester City will avoid a points deduction after the Premier League suffered a serious blow in its enforcement of the Profitability and Sustainability Rules (PSR).
The club won an appeal against a charge for an alleged
breach and said the appeal board, made up of three very senior lawyers, had
identified “flaws” in the Premier League rules.
The club had been charged by the Premier League for
breaching the PSR limit of £105million in losses over three years for the
2022-23 season, when they were relegated from the top flight.
Leicester, who were promoted again last season, launched a
legal challenge on the basis that the Premier League did not have jurisdiction
after they had been relegated. The ruling of the appeal board means the league
is unlikely to be able to take similar action against any other relegated club.
The challenge was initially dismissed by an independent
commission but an appeal board made up of the Rt Hon Sir Stanley Burnton, the
Rt Hon Sir Maurice Kay and Robert Glancy KC, found in favour of Leicester,
saying the club did not breach the PSR rules. The Premier League said in a
statement it was “surprised and disappointed” by the ruling.
The outcome of the appeal is a blow to the Premier League,
which is also facing a legal challenge from Everton over another alleged PSR
breach.
The league added in response to the finding: “The appeal
board’s decision effectively means that, despite the club being a member of the
league from seasons 2019/20 to 2022/23, the league cannot take action against
the club for exceeding the relevant PSR threshold in respect of the associated
accounting periods.
[The] decision will have created a situation where any club
exceeding the PSR threshold could avoid accountability in these specific
circumstances. This is clearly not the intention of the rules.
“It is of critical importance that the Premier League is
able to enforce its rules consistently to maintain the principle of fairness.
The league will now consider what further action it can take to ensure this is
the case.”
Leicester appear to have been saved by relegation and by
changing its accounting period from the year ending May 31, which they used in
2022, to the year ending June 30 in 2023.
Football finance guru Kieran Maguire comments: ‘On the basis
of the Forest/Everton points deduction of 3 points for breaking the rules and 1
more point per £6.5m above the limit IF the PL calculations were correct then
with a £24.4m breach Leicester would have had a 7 point deduction (subject to
aggravating & mitigating factors).’
Magure added: ‘A masterful performance by the Messi of Sport
Law’ (Nick de Marco).
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