Fury within Premier League as Leicester escape punishment due to legal loophole

There is fury within the top two divisions of English football after a legal technicality ensured that Leicester City will escape a points deduction, in another blow to the Premier League’s application of its Profit and Sustainability Rules (PSR).

The club had previously been charged by the top flight for breaching the limit of £105m in losses over three seasons up to 2022-23, but Leicester’s change of financial year from 31 May to 30 June 2023 following the season they were relegated saw the appeal board rule that they fell out of the Premier League’s jurisdiction. This essentially meant the club fell into a grey area between the top two divisions.

Although the decision stated there was “nothing untoward” in the request to change financial dates, with the club having informed the Premier League as early as March 2023, it has brought strong emotion within the top two divisions.

The Premier League themselves declared they were “surprised and disappointed” at the decision, but much of the fury has been about the competition’s enforcement of regulations.

A Leicester statement even made a point of saying that the appeal board - two of whom are former Court of Appeal judges - identified “flaws” in the drafting of the rules.

The club were always confident of their position, having initially informed the Premier League that the request to change dates was to “benefit from the summer transfer window in order to meet obligations under the PSRs”. Leicester’s statement stressed the consideration of “the wording which is actually used in the Premier League rules (in accordance with established principles of English law)”.

The stance within the club is that they only ever asked for the rules to be applied as they are written. If not, the argument was made, they are left open to interpretation. Leicester also internally argued they have future compliance to think of.

This is privately disputed by other senior football executives, who point to how a previous case with Sheffield Wednesday established the idea of business common sense in applying such regulations. This is what is known to have infuriated the Premier League hierarchy, with the wording of their statement reflecting the belief that the decision overlooked the reality of the season.

Much of the anger within the top two divisions is nevertheless at the Premier League itself. As one senior official privately complained, “they were allowed to escape last season and blitz their way through the Championship”. There is frustration that Leicester didn’t sell more players on being relegated.

While that has brought some fury at the club, many rivals ultimately share their view that the decision has exposed “flaws”. Football legal figures have compared them unfavourably to Uefa’s rules, which are seen as much more watertight, especially on issues like “reporting perimeter”. This covers issues like Chelsea’s selling of assets to other companies they own or the demarcation of costs between Manchester City and City Football Group.

Some clubs have expressed frustration that the Premier League never took repeated advice to set up independent panels and units to address such cases, with the argument being they would have prevented an example like this. Both Uefa and the English Football League have such panels.

That also points to perhaps the greater consequence of this case in terms of “meaning”. Although the principles of PSR haven’t been challenged, executives have spoken about how other clubs that have faced investigation - such as Manchester City, Everton, Chelsea and Nottingham Forest - will be watching this keenly.