Leicester City: Premier League charges Championship club with alleged breaches of financial rules

Leicester City have been charged by the Premier League with allegedly breaking spending rules during their last three seasons in the top flight.

If found guilty the Championship high-flyers could face a points deduction.

The Foxes are also subject to a separate financial probe by the English Football League (EFL).

Leicester, who were relegated at the end of last season, said they were “surprised” and “disappointed” by the timing of the Premier League’s actions, when the club is not in the top flight.

The club added they would “defend” themselves “from any unlawful acts by the football authorities, should they seek to exercise jurisdiction where they cannot do so”.

“LCFC remains willing and eager to engage constructively with the Premier League and the EFL to seek the proper resolution of any potential charges, by the right bodies, and at the right time,” the Foxes said.

Leicester are yet to make their accounts for their last season in the Premier League publicly available, but in the 12 months up to May 2022 they lost a club record £92.5m.

A year earlier, in the season when they lifted the FA Cup for the first time, the club reported a pre-tax loss of £33.1m.

Top-flight rules permit clubs to make losses of £105m over a three-year period, or £35m per campaign, before facing sanctions.

Leicester the latest club to be charged

Both Everton and Nottingham Forest have faced similar charges relating to their accounts up to 2022-23, with the latter found guilty and hit with a four-point deduction on Monday.

Everton were docked 10 points in November – which was reduced to six on appeal – for previous PSR breaches, and are waiting on a potential second punishment relating to the assessment period ending with their 2022-23 accounts.

Both Premier League clubs were required to submit their accounts by 31 December – under new rules designed to speed up the reporting process and ensure any penalties are imposed during a season when alleged transgressions take place – but Leicester were not required to do so after dropping out of the league.

And because Leicester were not part of the Premier League when the new ‘standard directions’ were adopted, which also prescribe a timeline when cases should be heard, the independent commission will set the timescale.

It means that the case, including any appeals, could run beyond the end of this season and may see sanctions, if applicable, enforced next season.

Leicester are now involved in dealing with two financial investigations, with the club the subject of an ongoing EFL inquiry into a possible breach of PSR rules relating to the ongoing season.

The club were forecast to breach loss limits for the ongoing three-year term.

Leicester say they have “repeatedly demonstrated [their] commitment to the [profit and sustainability] rules through [their] operating model over a considerable period”.

In 2018 the club had to pay the EFL £3.1m after settling a Financial Fair Play dispute from the 2013-14 season when they won the Championship.

When could any potential punishment take effect? – Analysis

Nick Mashiter, BBC Sport senior football news reporter

Leicester’s referral to an independent commission for alleged PSR breaches has clearly frustrated the club but there is a lot for them to consider.

The Foxes have underlined their commitment to co-operating in the process, something which benefited Nottingham Forest who had their penalty reduced by two points.

Leicester are second in the Championship and any penalty this season would have huge ramifications in the promotion race.

But there are just over six weeks until the end of the Championship campaign and, given any appeal would also need to be factored in, it is hard to see this situation being wrapped up by then.

The Premier League wants to move forward but it is out of their hands now Leicester have been referred to the independent commission.

As the Foxes were relegated last season, before the introduction of the top flight’s new ‘standard directions’, the 12-week time frame – something used in Nottingham Forest’s case – does not apply.

The directions are designed to ensure any charges are dealt with swiftly and any punishment is applied in the same season.

Instead, Leicester’s case could follow a similar timescale to Everton’s first charge before the new rules – although all parties would want a swifter resolution.

Everton were initially referred to a commission last March with their case eventually concluding in November when the Toffees were hit with an initial 10-point deduction, reduced to six on appeal.

Depending on what, if any, potential punishment is handed down – and this is still an alleged breach – the Foxes could start next season’s Premier League season on minus points if they are promoted.