The Premier League has charged Leicester City with allegedly violating spending regulations over the course of their past three seasons in the top flight.
Leicester has been directed to an independent commission due to alleged breaches of profit and sustainability rules (PSR) and failure to provide audited financial statements. If proven, the high-flying Championship team could potentially receive a points deduction.
Additionally, the Foxes are under investigation for financial matters by the English Football League (EFL).
Leicester, recently relegated at the conclusion of the previous season, expressed their surprise and disappointment at the timing of the Premier League’s actions, particularly since the club is currently 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 has not yet disclosed their financial accounts for their final season in the Premier League. However, for the 12 months leading up to May 2022, the club incurred a record loss of £92.5 million.
In the previous year, when they secured their first-ever FA Cup victory, the club reported a pre-tax loss of £33.1 million.
Premier League regulations allow clubs to sustain losses of up to £105 million over a three-year span, or £35 million per season, before encountering penalties.
Leicester the latest club to be charged
Both Everton and Nottingham Forest have faced similar allegations concerning their financial accounts up to the 2022-23 season. Nottingham Forest was found guilty and received a four-point deduction on Monday. Everton had previously been penalized with a 10-point deduction in November, which was later reduced to six points upon appeal, for previous breaches of PSR. Everton awaits a potential second penalty related to the evaluation period ending with their 2022-23 financial accounts.
Both Premier League clubs were required to submit their accounts by December 31st under new regulations aimed at expediting the reporting process and ensuring that any penalties are imposed during the season in which alleged infractions occur. However, Leicester was not obligated to do so after being relegated from the league.
Moreover, since Leicester was not part of the Premier League when the new “standard directions” were implemented, which also specify a timeline for hearing cases, the independent commission will determine the schedule. This means that the case, including any appeals, could extend beyond the current season, with potential sanctions enforced in the following season.
Leicester is currently facing two financial investigations, as the club is also under an ongoing EFL inquiry regarding a possible breach of PSR rules for the current season. The club was projected to surpass loss limits for the current 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.