Bad timing for the relegation battling Foxes
Leicester City, who are facing a battle to avoid relegation, could have their nightmare return to the Premier League compounded by a points deduction for breaching Profit and Sustainability Rules (PSR).
The Foxes, who currently sit 19th in the League with 14 points from 20 games, will be informed if they have breached PSR for the second time in 10 months no later than Tuesday.
If Leicester are found to have exceeded the permitted losses of £83 million over a three-year reporting period, they will join Everton and Nottingham Forest as the latest club to face punishment over PSR.
Everton and Forest were both deducted points last season and a similar outcome for Leicester is a nightmare scenario for a club already in relegation trouble.
The usual threshold for Premier League clubs is £105 million over three years, but Leicester’s allowance is lower – £83 million – as they spent the 2023-24 season in the Championship.
Leicester previously announced losses of £92.5 million and £89.7 million in the past two years but have been confident of avoiding sanctions.
After relegation to the Championship in May 2023 they raised over £90 million in the next financial year with the sales of Harvey Barnes (£38 million to Newcastle), Kiernan Dewsbury-Hall (£30 million to Chelsea) and Timothy Castagne (£13.5 million to Fulham), while Chelsea paid £10 million in compensation to appoint Enzo Maresca and his coaching staff.
Furthermore, several high earners including Youri Tielemans, Jonny Evans and Caglar Soyuncu departed as free agents.
The remaining players took wage cuts between 35 to 50 per cent.
Permitted add-backs, which are costs recognised to be in the general interest of the club, are also included, such as expenditure towards women’s football, the academy and community development.
The sacking of Steve Cooper did not help as it cost the club millions in compensation.
Despite their struggles on the pitch the financial situation means they will be restricted with what they can do in the transfer window and their only targets are said to be cheap full-backs.
In September last year, the 2015-16 title winners successfully won a legal row with the Premier League over an alleged breach.
At the time, Leicester argued, with the help of sports lawyer Nick De Marco KC, that the charge for breaching PSR in 2022-23 could not be applied as they had already been relegated when the accounts were completed in June 2023.
However, there is a suspicion among other top-flight clubs that the Premier League is ready to adopt a hardline stance this time with Leicester after the governing body was left angered by their last Houdini act.
Even if the Foxes manage to avoid relegation this year, the future looks bleak for the club as they wrestle with the rules and trying to propel the club up the table.
They will likely return to the model of selling one key player every summer to assist with PSR compliance.
Leicester believe the club have been unfairly scrutinised for displaying ambition. Chelsea have sold hotels and even their women’s team, while the saga over Manchester City’s 115 charges goes on.
Leicester feel they are facing potential punishment for simply daring to challenge the “big six”.
The timing could not be worse for the Foxes who have just suffered their fifth successive defeat under Ruud van Nistelrooy.
