Leicester 'could face points deduction next season'

[Lambert09]

we are incredibly lucky that we got this summer right.

 

We couldn’t afford a complete failed deal and thankfully the majority of what we did was good business. It gives me faith that even under tight restrictions we could still do well, I like what i’ve seen of glover. 

 

He gets a free pass for the relegation. window as far as i’m concerned but Kristiansen is looking like some player. 

[Vestan Pance]

15 minutes ago, Babylon said:

If we don’t get promoted it’s going to be tricky. But we should be able to get things under control. It will just end up being much much harder to get out of the league as we’d only have one season of decent parachute payments left, probably have a points deduction and need to sell players. 

 

 

I could well be wrong here but haven't we been borrowing money based on future income from Macquarie, to pay for the current season? I know this is mainly to push cashflow forwards but if we don't get up surely the cash will dry up as we'll be borrowing next seasons money against a massively reduced income?

Edited 24 March by Vestan Pance

[Babylon]

1 minute ago, Vestan Pance said:

I could well be wrong here but haven't we been borrowing money based on future income from Macquarie, to pay for the current season? I know this is mainly to push cashflow forwards but if we don't get up surely the cash will dry up as we'll be borrowing nest seasons money against a massively reduced income?

It was secured against future income, we can choose to pay it however we want. Could refinance. Could switch to another lender (king power)

[orangecity23]

We should raise our commercial income by leaning into the infamy and marketing it. Start selling a half time ffp meal deal in catering. Comes with a free carton of transfer Umbongo

[Guest glasgowfox]

3 hours ago, Babylon said:

Define “f.cked”?

 

If we get promotion we will be in a position of increased income and having our finances under control. We might get points deducted and eventually relegated. But we should be back under control and in a position to stay within any ffp we need to. We’d be back in the champ and have two years of parachutes to try and get promoted. 
 

If we don’t get promoted it’s going to be tricky. But we should be able to get things under control. It will just end up being much much harder to get out of the league as we’d only have one season of decent parachute payments left, probably have a points deduction and need to sell players. 
 

 

Thanks for that buddy

[Dan LCFC]

On 23/03/2024 at 22:25, Mickyblueeyes said:

However, what really scares me is the following season after the absolute blunder of the season before, we had no intention of selling an “asset” until an asset (Fofana) forced our hand. Imagine if he didn’t and we went down and had to sell him cut price like we did with Barnes/Maddison - that’s if he wasn’t injured like he is now. The lack of actual action that summer was horrendous.

That's a great point - hadn't even thought of that.

 

These lot are scarily bad. Even if we get through this are we seriously trusting these same people to get things back in gear?

[Mr Popodopolous]

Hi all. I wonder if I can post this time.

[Mr Popodopolous]

'T' means the present year. As the last case vs the EFL proved, Leicester vigorously argued that and won the case that 'T' was this season and this was correct because it wasn't to be assessed until March- EFL wanted  a Business Plan ahead of January to enforce cutbacks and sales or face the consequences with points.

 

EFL argued that 'T' was 2022-23 which is plain wrong as the above and subsequent rules and definitions show! T-1 is 2022-23 and T-2 is 2021-22. However had they won that case they could've gone ahead of pushing for the alleged breach to 2022-23 to be dealt with this year and the Business Plan to get compliant by March on top or face further consequences.

 

There were a couple of points I read with interest. As it happens I decided to get the Rules together in some sort of chronological order. Terraloon is correct in a lot of what they say but not all..

Why are Leicester under an Embargo now?

 

Because of this or this.

Either the P&S Submissions outright show a fail or show a fail thst will be corrected by end of June. Either is an Embargoable offence.

 

In respect of the specifics of the Rules themselves.

Effectively 2021-22, 2022-23 Actual Accounts and P&S/FFP returns and the club submitted Forecast for this present year.

 

As above. Had Leicester not submitted the estimated Profit and Loss for the present season, based on Burnley last year this seems to be an Embargoable offence. 2.1.3 does not show unless the EFL have put Leicester under Embargo for the wrong offence. I think Rule 16.2 covers failure to submit Accounts to the Football League for last season.

 

Unless the League have deliberately or incompetently Embargoed for the Wrong offence then yes it is the P&S Calculation being in excess or fine but only on the basis of sales by end of June.

 

 

The P&S/FFP Form itself. Last two year actual and current Forecast.

 

The unknown I guess is Transactions with Related Parties.

 

On a sidenote, the press coverage of this has been poor. This is a separate Offence or alleged Breach/schedule to the PL. The PL is literally an alleged overspend to 2022-23, this is the EFL Regs and if it is a Forecast Overspend then 2.10.3 logically follows on from 2.10.1.

 

As for the PL alleged Offence(s) that runs on their timetable and I dunno what is done if Accounts not submitted? Embargo?

 

In respect of the Embargo, I expect the League would object if a club while under said Embargo sought to renew contracts on major wages. What kind of wages might...

*Vestegaard

*Ndidi

*Praet

*Albrighton

*Iheanacho

*Vardy

...be on?

 

Whether the League would be minded to play ball would in the first instance depend on what terms Leicester seek to renew on. Probably the lower wages the better.

 

Oh and Nigel Pearson, we thought he was great at Ashton Gate. Disgrace him and his team were sacked in October.

Edited 25 March by Mr Popodopolous

[Mr Popodopolous]

One last thought. Albeit it is remote as it would imply your hierarchy haven't understood the Rules correctly or the slight difference in the Championship.

 

Your hierarchy have said that yes there is an overspend but a sale and leaseback or outright sale say of a Tangible Asset puts back under the limit.

 

The issue there is that since summer 2021, Fixed Asset Sale Profits or Losses have been excluded from the FFP calculations, certainly at Championship level and always at UEFA level. It caused a lot of controversy.

 

This last paragraph may not be popular but nobody made Leicester hierarchy if this has happened, put in a Forecast Breach for the period ending 2023-24. I've been forecasting issues in this regard since early on in the season.

Edited 25 March by Mr Popodopolous

[JimmyC74]

Latest price of Football Pod dropped this morning and the opening segment is all about Leicester. Interesting listen.

 

Mentioned that potentially there could be as many as four arbitration proceedings (2x EPL, 2x EFL needing to be considered in tandem as intrinsically linked) taking up to six months for a resolution.

 

Kieran Maguire said very unlikely any points deduction will be applied this season.

 

They discussed that there is precedent that the EPL wouldn’t apply a EFL points deduction to a promoted team but would oversee that a financial penalty was deducted from broadcast revenues.  Referred to this happening before with us in 2014 and the Bournemouth and Fulham.

of course any EPL points deduction would be a separate issue. You won’t be surprised that Maguire doesn’t think there will be any discount for cooperation ;D

 

Also covers that whilst PSR rules haven’t changed since 2013 the change in carve up of international broadcast revenues (2016) with more allocated to the ‘big six’ is a big driver behind the growing gap / difficulty in competing. City will have agreed to all of those rule changes - but the argument there isn’t a level playing field cannot be denied.

[CosbehFox]

Tick tock, tick tock. Seven full days to release the accounts. Four working days 

[ClaphamFox]

4 minutes ago, CosbehFox said:

Tick tock, tick tock. Seven full days to release the accounts. Four working days 

It will have to be this week, right? Surely won’t do it at the weekend. So maybe four more sleeps until we find out? So exciting - it’ll be like transfer deadline day and the first day of the season rolled into one 

[CosbehFox]

3 minutes ago, ClaphamFox said:

It will have to be this week, right? Surely won’t do it at the weekend. So maybe four more sleeps until we find out? So exciting - it’ll be like transfer deadline day and the first day of the season rolled into one 

31st March 2024. Accounts overdue otherwise 

[Terraloon]

7 hours ago, Mr Popodopolous said:

'T' means the present year. As the last case vs the EFL proved, Leicester vigorously argued that and won the case that 'T' was this season and this was correct because it wasn't to be assessed until March- EFL wanted  a Business Plan ahead of January to enforce cutbacks and sales or face the consequences with points.

 

EFL argued that 'T' was 2022-23 which is plain wrong as the above and subsequent rules and definitions show! T-1 is 2022-23 and T-2 is 2021-22. However had they won that case they could've gone ahead of pushing for the alleged breach to 2022-23 to be dealt with this year and the Business Plan to get compliant by March on top or face further consequences.

 

There were a couple of points I read with interest. As it happens I decided to get the Rules together in some sort of chronological order. Terraloon is correct in a lot of what they say but not all..

Why are Leicester under an Embargo now?

 

Because of this or this.

Either the P&S Submissions outright show a fail or show a fail thst will be corrected by end of June. Either is an Embargoable offence.

 

In respect of the specifics of the Rules themselves.

Effectively 2021-22, 2022-23 Actual Accounts and P&S/FFP returns and the club submitted Forecast for this present year.

 

As above. Had Leicester not submitted the estimated Profit and Loss for the present season, based on Burnley last year this seems to be an Embargoable offence. 2.1.3 does not show unless the EFL have put Leicester under Embargo for the wrong offence. I think Rule 16.2 covers failure to submit Accounts to the Football League for last season.

 

Unless the League have deliberately or incompetently Embargoed for the Wrong offence then yes it is the P&S Calculation being in excess or fine but only on the basis of sales by end of June.

 

 

The P&S/FFP Form itself. Last two year actual and current Forecast.

 

The unknown I guess is Transactions with Related Parties.

 

On a sidenote, the press coverage of this has been poor. This is a separate Offence or alleged Breach/schedule to the PL. The PL is literally an alleged overspend to 2022-23, this is the EFL Regs and if it is a Forecast Overspend then 2.10.3 logically follows on from 2.10.1.

 

As for the PL alleged Offence(s) that runs on their timetable and I dunno what is done if Accounts not submitted? Embargo?

 

In respect of the Embargo, I expect the League would object if a club while under said Embargo sought to renew contracts on major wages. What kind of wages might...

*Vestegaard

*Ndidi

*Praet

*Albrighton

*Iheanacho

*Vardy

...be on?

 

Whether the League would be minded to play ball would in the first instance depend on what terms Leicester seek to renew on. Probably the lower wages the better.

 

Oh and Nigel Pearson, we thought he was great at Ashton Gate. Disgrace him and his team were sacked in October.

An absolute quality piece of work well done and thanks.

 

No matter what happens re timings , jurisdiction and impending proceedings the only conclusion I can come to is that in all this LCFc are dammed if they get promoted and dammed if they don’t.

 

I wish I could read it in another watch but the delays that have been argued and of course re the business plan in particular have done is kick the can down the road and at some point everything will catch up that is of course unless somehow an argument is won that no one had jurisdiction 

[Lesta Legend]

Tanner confirms that EFL and Premier League pushing for points deduction this season. But we would have to agree to a fast track process, which seems a nonsense. 

[lcfc_forever]

Stefan Borson said a few interesting things in the Athletic. Essentially, unlikely we get a points deduction this season because of the legal process.

 

The most interesting paragraph was this one - if this is correct, that means we sold Maddison on the cheap to meet PSR but just missed the deadline : 

“It seems clear they have breached and by my model, they have breached by in excess of £40m,” says football finance expert Stefan Borson. “The question mark is James Maddison’s (£40m) deal to Tottenham, which falls right on the edge of the (financial) years. That is good because they can say to the Premier League, ‘If we had sold Maddison the day before we wouldn’t breach by much at all’. That could be argued to be mitigation. The problem is they will breach again by quite a lot for this season.”

 

https://theathletic.com/5361748/2024/03/25/leicester-city-psr-points-deduction/

[StanSP]

11 minutes ago, lcfc_forever said:

- if this is correct, that means we sold Maddison on the cheap to meet PSR but just missed the deadline

Sounds about right knowing our board

 

[Richmondfox]

9 minutes ago, lcfc_forever said:

Stefan Borson said a few interesting things in the Athletic. Essentially, unlikely we get a points deduction this season because of the legal process.

 

The most interesting paragraph was this one - if this is correct, that means we sold Maddison on the cheap to meet PSR but just missed the deadline : 

“It seems clear they have breached and by my model, they have breached by in excess of £40m,” says football finance expert Stefan Borson. “The question mark is James Maddison’s (£40m) deal to Tottenham, which falls right on the edge of the (financial) years. That is good because they can say to the Premier League, ‘If we had sold Maddison the day before we wouldn’t breach by much at all’. That could be argued to be mitigation. The problem is they will breach again by quite a lot for this season.”

 

https://theathletic.com/5361748/2024/03/25/leicester-city-psr-points-deduction/

If the Maddison fee doesn’t count towards the prem it would count towards the EFL or is that too simple? 

[StanSP]

15 minutes ago, Lesta Legend said:

Tanner confirms that EFL and Premier League pushing for points deduction this season. But we would have to agree to a fast track process, which seems a nonsense. 

Surely the legality of that is all over the place? What right do PL have in deciding points deductions when we're not even in their league? 

[Richmondfox]

7 minutes ago, StanSP said:

Surely the legality of that is all over the place? What right do PL have in deciding points deductions when we're not even in their league? 

Seems like a lot of overreach and using the press to create reactions and misinformation. Knowing it will go to court, LCFC can’t say too much in their defence.  KPs stalling hasn't helped, which is probably why it’s a coordinated attack to show that no team is above the Prem and the annoying younger brother EFL. 

 

Once everything is out in the open they can decide why ch of the leagues can punish us and on what charges. 

[UniFox21]

The disjointed planning of these rules is laughable.

 

How have the Prem and EFL not got this sort of situation covered with legislation and rulings in place? 

The Prem acting on its own with rulings relating to finances and not incorporating EFL in is beyond me. Understand they'd need separate amounts of losses etc, but no reason all of this couldn't be tied up in 1 document 

[st albans fox]

2 hours ago, JimmyC74 said:

 

Latest price of Football Pod dropped this morning and the opening segment is all about Leicester. Interesting listen.

 

Mentioned that potentially there could be as many as four arbitration proceedings (2x EPL, 2x EFL needing to be considered in tandem as intrinsically linked) taking up to six months for a resolution.

 

Kieran Maguire said very unlikely any points deduction will be applied this season.

 

They discussed that there is precedent that the EPL wouldn’t apply a EFL points deduction to a promoted team but would oversee that a financial penalty was deducted from broadcast revenues.  Referred to this happening before with us in 2014 and the Bournemouth and Fulham.

of course any EPL points deduction would be a separate issue. You won’t be surprised that Maguire doesn’t think there will be any discount for cooperation ;D

 

Also covers that whilst PSR rules haven’t changed since 2013 the change in carve up of international broadcast revenues (2016) with more allocated to the ‘big six’ is a big driver behind the growing gap / difficulty in competing. City will have agreed to all of those rule changes - but the argument there isn’t a level playing field cannot be denied.

difficult for an old bloke to read that mate

i think we actually voted with the rich six re that realignment of international broadcast revenues 
 

 

25 minutes ago, lcfc_forever said:

Stefan Borson said a few interesting things in the Athletic. Essentially, unlikely we get a points deduction this season because of the legal process.

 

The most interesting paragraph was this one - if this is correct, that means we sold Maddison on the cheap to meet PSR but just missed the deadline : 

“It seems clear they have breached and by my model, they have breached by in excess of £40m,” says football finance expert Stefan Borson. “The question mark is James Maddison’s (£40m) deal to Tottenham, which falls right on the edge of the (financial) years. That is good because they can say to the Premier League, ‘If we had sold Maddison the day before we wouldn’t breach by much at all’. That could be argued to be mitigation. The problem is they will breach again by quite a lot for this season.”

 

https://theathletic.com/5361748/2024/03/25/leicester-city-psr-points-deduction/

if madders was missed  end June 22/23 on a technicality then that would be strong mitigation because the deal was essentially done at a discount in June (not like Johnson at forest). That would fall under precedent as per sheff wed sale of their ground which was all agreed legally  pre end of June but not completed until later in the summer. 
 

and if madders had indeed slipped into 23/24 then you’d have thought we wouldn’t need to sell anyone this June (which we clearly do based on @Mr Popodopolous post above and general expectation around the club).  I’ve always wondered if the wage reduction clauses came with an end of season repayment bonus which cancels them out on immediate bounce back.  If so, those bonus’ must be included in this year’s accounts.  That would have been a v poor strategic decision  because it effectively negates any saving in the financial year and exposes you to being charged by the efl.  Mind you, we have form for that and perhaps assumed we’d just deal with a fine as we (and others) had in the past. 

 

 

[coolhandfox]

@st albans fox if we called it a promotion bonus that would be fine as they are exclude from the PSR calculations.

Edited 25 March by coolhandfox

[coolhandfox]

1 hour ago, Terraloon said:

An absolute quality piece of work well done and thanks.

 

No matter what happens re timings , jurisdiction and impending proceedings the only conclusion I can come to is that in all this LCFc are dammed if they get promoted and dammed if they don’t.

 

I wish I could read it in another watch but the delays that have been argued and of course re the business plan in particular have done is kick the can down the road and at some point everything will catch up that is of course unless somehow an argument is won that no one had jurisdiction 

Kicking the can down the road makes sense, we don't want to be punished this season as a points deduction keep us in the Championship is more damaging long term.

[st albans fox]

2 minutes ago, coolhandfox said:

@st albans fox if we called it a promotion bonus that would be fine as they are exclude from the PSR calculations.

Can you point me to that because I’m pretty sure that this particular loophole was closed some time ago ?

infact I recall reading that bonus’ had to be included relevant to the season to which they apply rather than being paid the following season (certainly not being deductible from psr calcs)