New Everton? Leicester risks point deduction for FFP violation

Championship team Leicester City faces a possible points punishment next season if the league finds the Foxes guilty of an FFP violation. The rules in consideration are the Profitability and Sustainability Regulations (PSR).

The English Football League (EFL) considers Leicester City to be in danger of violating season-specific financial regulations. Although March 1 was the deadline, the club has still not submitted its 2023-24 finances.

The EFL requested a financial plan from Leicester in November, anticipating the club would exceed allowed losses this season. In Wednesday’s regulatory hearing, Leicester prevailed against the league, citing the lack of authority for the request.

Allegedly, Leicester exceeded deficit standards last year. However, Leicester was exempt from sanctions. The club dropped down from the Premier League, which has major implications for the club’s finances. This accusation comes from teams who compete with Leicester in the English second division.

Financial body says Leicester threatens FFP violation

According to the league’s CFRU, the independent club financial reporting body, they are expecting a numbers breach.

“Earlier this season, based on financial information submitted by the Club, the EFL’s independent Club Financial Reporting Unit (CFRU) concluded that the Club was forecasting to breach the Profitability and Sustainability (P&S) loss limits for the three-year period ending with the financial year 2023/24.

“The CFRU determined that it was appropriate under P&S Rule 2.9 to require Leicester City Football Club to submit a business plan. That is to demonstrate how it planned to comply with the EFL’s P&S spending limits. The Club argued that the relevant P&S Rule did not apply to it, meaning the CFRU had no right to require a business plan in respect of Season 2023/24.

“That matter was referred by the Club to the independent Club Financial Reporting Panel (CFRP). It concluded that under the Rules as currently written, Rule 2.9 did not apply to the Club and so it was under no obligation to submit and agree to a business plan.”

“The CFRP decision has been published today. It will help in informing the EFL on the potential Rule amendments. They will be proposed for consideration by Championship Clubs in the future to ensure all Clubs are treated equally under the Rules.

“Leicester City is responsible for meeting its obligations in respect of the P&S Rules. They will be assessed along with the submissions of all other Clubs in accordance with the League’s established processes. The League will be making no further comment on this matter at this time.”

Potential consequences for the Foxes

If promoted, the club must submit its financials for the current three-year cycle to the Premier League by December 31. Their threshold will be $106 million, rather than the standard $134 million. That’s because they played under reduced EFL loss restrictions for one season.

The Telegraph adds that the Foxes may have to sell several players this summer only to meet financial regulations. This is regardless of whether they earn promotion to the Premier League or not. Given that the numbers cover the period until the end of June, it may be necessary to make sales promptly.

PHOTOS: IMAGO.