Leicester 'could face points deduction next season'

[lcfc_forever]

14 minutes ago, st albans fox said:

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 
 

 

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. 

 

 

Maybe we’re arguing the Maddison sale should come under 22/23 so not part of the EFL overspend? 

[coolhandfox]

1 minute ago, st albans fox said:

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) 

It only counts for promotion bonus so it would have to be paid this season.

 

You said this yesterday accounts so I assumed you meet 23/24?

 

Or do you mean last year unpublished accounts.

[davieG]

I don't think Top and the Club have come to terms with the loss of Vichai, he's still listed on the OS as the Chairman - https://www.lcfc.com/club/senior-management?lang=en

 

It's like the ghost of Matt Busby and Ferguson at Man Utd.

[st albans fox]

8 minutes ago, coolhandfox said:

It only counts for promotion bonus so it would have to be paid this season.

 

You said this yesterday accounts so I assumed you meet 23/24?

 

Or do you mean last year unpublished accounts.

Not 100% sure what the question is!   But promotion bonus payments would have to be included in accounts 23/24.  

[coolhandfox]

9 minutes ago, st albans fox said:

Not 100% sure what the question is!   But promotion bonus payments would have to be included in accounts 23/24.  

Think we are getting cross wired 

[Ric Flair]

If they are all on bonuses that top them back up to their PL salaries then we are absolutely insane. 

[UniFox21]

25 minutes ago, davieG said:

I don't think Top and the Club have come to terms with the loss of Vichai, he's still listed on the OS as the Chairman - https://www.lcfc.com/club/senior-management?lang=en

 

It's like the ghost of Matt Busby and Ferguson at Man Utd.

The club is a tad OTT on his memory, but it's just a listing as the previous chairman with the dates he was alive next to it. 

[UniFox21]

13 minutes ago, Ric Flair said:

If they are all on bonuses that top them back up to their PL salaries then we are absolutely insane. 

Given I don't imagine they took huge cuts following our relegation, don't believe any of them are entitled to a bonus 

[davieG]

2 minutes ago, UniFox21 said:

The club is a tad OTT on his memory, but it's just a listing as the previous chairman with the dates he was alive next to it. 

I just think it shows they can't let him go and he's still there looking over their shoulder.

It would be no problem for them to create a special memorial page.

[davieG]

https://uk.sports.yahoo.com/news/contradiction-heart-leicester-case-premier-093143498.html?guccounter=1&guce_referrer=aHR0cHM6Ly9jLm5ld3Nub3cuY28udWsv&guce_referrer_sig=AQAAAHXSsls-xO-4OKZrOK5lwGh9JGE-UT07P0p2wQOI8rJBuZWDaws60PQ2bMhRIN-3QfHD-xs5VvPTjQRtsAraL01iacxO42_FFqvJSHoIcyNRjt5-62vR4S5cK-HMsFNqR6RJ8v-kgv_mnSvQr0j50xU5Q-LhoWGXgAYrlw2yHglr

 

The contradiction at the heart of Leicester’s case with the Premier League
Richard Jolly
Mon, 25 March 2024 at 9:31 am GMT·5-min read

The contradiction at the heart of Leicester’s case with the Premier League

Leicester City already held a unique status with both the Premier League and the EFL. Now they may have another. The only club to win each of English football’s top three divisions in the 21st century – champions of League One; Manchester United, Liverpool and Arsenal may never sing that – then announced plans to take legal action against both the Premier League and the EFL.

The feelgood success story has become an emblematic failure in an age of suddenly greater regulation and a dramatic recourse to the lawyers. Attention has shifted from Jamie Vardy’s predilection for vodka and Red Bulls to Nick De Marco KC’s capacity to win court cases. Leicester were the 5000-1 shots who won the title. They presumably think the odds are slightly better when they take on the governing bodies.

There may be a contradiction in their case. Trying to argue they are not subject to the Premier League’s jurisdiction presumably brings them into the EFL’s remit. One way or another, the accusation is that Leicester have failed Financial Fair Play; in one division or another, this season or next, it should bring a points deduction. Which, in turn, either further imperils their chances of promotion or gives them an added obstacle to stay up next season.

But it is also revealing in various other respects. When Everton were the trailblazers in being charged for their breach of Profitability and Sustainability Rules (PSR), there was talk of other clubs suing them; if the accusation was that Everton cheated to get an advantage, that looks ridiculous when they finished 17th last season and the clubs in 16th (Nottingham Forest) and 18th (Leicester) have their own breaches.

 

Another is that all three suffered on the balance sheet for their underachievement. Budgeting to finish far higher in the Premier League than they did – somehow Everton factored in a sixth-place finish in 2021-22 and trailed in 16th – brings far less prize money and a hole in the accounts ledger. Leicester had more reasons to imagine themselves in the upper echelons of the table but went from five consecutive top-half finishes, two of them in fifth, to 18th in 2022-23.

It is notable, too, that Covid upended the footballing economy. Clubs were permitted to write off Covid losses in their accounts – and Everton’s felt suspiciously large – without them counting towards FFP calculations. But the collapse of transfer fees, especially in other leagues, reduced the market to sell players; it also led to a knock-on effect by restricting the spending power of Premier League rivals who might have otherwise sold well to Europe to finance their own buying.

Leicester had a reputation as fine traders, but they posted a record £92.5m loss for 2021-22, a rare year without a significant sale. In previous summers, players such as Ben Chilwell, Harry Maguire and Riyad Mahrez had brought in windfalls. That had come to feel part of the business plan, yet it can illustrate the precarious position clubs find themselves in: even the well-run are only a few poor decisions away from being plunged into trouble and Leicester made more than a few. Nevertheless, they did well to get £70m from Chelsea for the ever-injured Wesley Fofana in 2022; they then sold James Maddison, Harvey Barnes and Timothy Castagne the following year, after relegation, even though too many of the others who left did so on free transfers.

But a relatively sure touch in the transfer market started to desert them. There were other signings they could not sell for a profit – Danny Ward, Ayoze Perez and Rachid Ghezzal in 2018, Dennis Praet in 2019 – but two windows of recruitment came at a particular cost. The 2021 outlay on Patson Daka, Boubakary Soumare and Jannik Vestergaard, none either a footballing or financial success, was compounded by the January 2023 outlay on Harry Souttar and Victor Kristiansen.

In the process, Leicester contrived to get the worst of both worlds: spending some £30m to compound their FFP issues and yet still getting relegated. It also illustrates that they should have done more to try and cash in on Youri Tielemans, Caglar Soyuncu and Perez while they still could and, while the scale of Leicester’s breach is not yet known, the recurring theme between them, Everton and Forest is that much of it was avoidable: without accumulating so many players, with fewer bad signings, with more sales, the figures may be more presentable.

But it is also a hugely damning indictment of Brendan Rodgers, even if the cost of sacking him may be a further factor in taking Leicester over the FFP limit. Leicester’s former manager had a tendency to voice his complaints about the board’s reluctance to spend in the summer of 2022; now it is apparent that was based on sounder financial logic than his own.

Rodgers had excelled before. Last season, he underachieved with what has proved an unaffordable squad; it would be instructive to know if Leicester’s wage bill was higher than Newcastle’s, as they finished fourth; certainly before bonuses were triggered on Tyneside anyway.

The counter-argument is that Leicester suffered for their success. They were a club without big-six commercial or matchday income but, as they finished fifth twice and won the FA Cup, they had players who deserved to be paid accordingly. They were damned if they did, damned if they didn’t.

Viewed that way, Leicester were punished for their ambition. Certainly it put them in a position where they had less margin for error. But err Leicester did, both in plummeting into the Championship and with transfer-market missteps. Now they find themselves under a transfer embargo, facing a loss of points, their future threatened.

Saying they wanted charges “proportionately determined” risked accusations of hypocrisy, given that threats to take legal action against the Premier League and the Football League strike some as disproportionate. But what can be said is that the landscape has been transformed since Leicester won the Championship in 2014 – while breaching Financial Fair Play.

[st albans fox]

12 minutes ago, Ric Flair said:

If they are all on bonuses that top them back up to their PL salaries then we are absolutely insane. 

I mooted this months ago 

 

Say I’m daka’s agent 

were negotiating a deal because he’s decided to join us ahead of other options. We’re going to pay him more than them - we are in the Europa league. We just finished fifth and won the cup.  All other signings have been made with the club showing ambition and selling themselves as a top PL club pushing for trophies and Europe. 
 

the club say that there has to be a wage relegation clause. My reply to that would be that my client requires a release clause on relegation of the amortised value remaining on his purchase fee or £8m (whichever is the higher).   The club would refuse that because they don’t do release clauses (dogma but I expect it was vichai’s policy post kante and no one can change that) 

 

so my only other option is to say that the relegation clause is only acceptable if it’s repaid as a bonus on immediate return to the PL.  I’m still not happy with that because it exposes my client to a second or third season if not promoted.  The flip side of that is the very decent salary that he will be earning in the PL. so I accept that the bounce back bonus in year 1 is the best I’ll get - maybe a 50% bonus in year 2 if I can get that though 
I really don’t think it’s insane ric 

I think many here wondered how we would have got relegation wage reduction clauses included in the first place. You’d surely have to agree something like this to get them in ?  

[st albans fox]

10 minutes ago, UniFox21 said:

Given I don't imagine they took huge cuts following our relegation, don't believe any of them are entitled to a bonus 

100%
if they didn’t have any reduction then they shouldn’t get any bonus 

 

but it was reported that they had 30/50% cuts 

[UniFox21]

17 minutes ago, st albans fox said:

100%
if they didn’t have any reduction then they shouldn’t get any bonus 

 

but it was reported that they had 30/50% cuts 

Half had my mind on board members getting bonuses when I initially posted; but in hindsight I wonder if many of the big wage signings actually had bug relegation clauses at all.

[Terraloon]

14 minutes ago, st albans fox said:

100%
if they didn’t have any reduction then they shouldn’t get any bonus 

 

but it was reported that they had 30/50% cuts 

Sadly all sorts of contractural bonuses will have become payable , some in season , some at seasons ended even for  players whose contracts have ended.

 

Players being granted “ free transfers”very rarely just walk for nowt (unless of course their contract has ended and even then you can be pretty sure there would be a loyalty bonus due )they will have had their contract paid up in full or in part and then you have to work out  if any of the transfer fee remains to be amortised if not the will be an immediate negative impact in the accounts

[Jattdogg]

Just brace yourselves for doom and move on lol.

[st albans fox]

11 minutes ago, Terraloon said:

Sadly all sorts of contractural bonuses will have become payable , some in season , some at seasons ended even for  players whose contracts have ended.

 

Players being granted “ free transfers”very rarely just walk for nowt (unless of course their contract has ended and even then you can be pretty sure there would be a loyalty bonus due )they will have had their contract paid up in full or in part and then you have to work out  if any of the transfer fee remains to be amortised if not the will be an immediate negative impact in the accounts

Yes appreciate all of that 

loyalty bonus’ are often simply s/o fees spread across the contract 

these are known and unavoidable 

 

I was specifically referencing an unknown relating to wage reductions on relegation and possible repayment of these reductions on bounce back 

[Bablemikey]

Big 6, FFP & VAR have sucked the enjoyment out of the game and ruined football.

[sm1]

23 minutes ago, Jattdogg said:

Just brace yourselves for doom and move on lol.

Yep that's my attitude. Whether we get shafted by the EFL or the PL, it doesn't matter, because one of them is going to come at us hard. Everything else is PR, the club know we're fuched. 

[urban.spaceman]

1 hour ago, davieG said:

https://uk.sports.yahoo.com/news/contradiction-heart-leicester-case-premier-093143498.html?guccounter=1&guce_referrer=aHR0cHM6Ly9jLm5ld3Nub3cuY28udWsv&guce_referrer_sig=AQAAAHXSsls-xO-4OKZrOK5lwGh9JGE-UT07P0p2wQOI8rJBuZWDaws60PQ2bMhRIN-3QfHD-xs5VvPTjQRtsAraL01iacxO42_FFqvJSHoIcyNRjt5-62vR4S5cK-HMsFNqR6RJ8v-kgv_mnSvQr0j50xU5Q-LhoWGXgAYrlw2yHglr

 

The contradiction at the heart of Leicester’s case with the Premier League
Richard Jolly
Mon, 25 March 2024 at 9:31 am GMT·5-min read

The contradiction at the heart of Leicester’s case with the Premier League

Leicester City already held a unique status with both the Premier League and the EFL. Now they may have another. The only club to win each of English football’s top three divisions in the 21st century – champions of League One; Manchester United, Liverpool and Arsenal may never sing that – then announced plans to take legal action against both the Premier League and the EFL.

The feelgood success story has become an emblematic failure in an age of suddenly greater regulation and a dramatic recourse to the lawyers. Attention has shifted from Jamie Vardy’s predilection for vodka and Red Bulls to Nick De Marco KC’s capacity to win court cases. Leicester were the 5000-1 shots who won the title. They presumably think the odds are slightly better when they take on the governing bodies.

There may be a contradiction in their case. Trying to argue they are not subject to the Premier League’s jurisdiction presumably brings them into the EFL’s remit. One way or another, the accusation is that Leicester have failed Financial Fair Play; in one division or another, this season or next, it should bring a points deduction. Which, in turn, either further imperils their chances of promotion or gives them an added obstacle to stay up next season.

But it is also revealing in various other respects. When Everton were the trailblazers in being charged for their breach of Profitability and Sustainability Rules (PSR), there was talk of other clubs suing them; if the accusation was that Everton cheated to get an advantage, that looks ridiculous when they finished 17th last season and the clubs in 16th (Nottingham Forest) and 18th (Leicester) have their own breaches.

 

Another is that all three suffered on the balance sheet for their underachievement. Budgeting to finish far higher in the Premier League than they did – somehow Everton factored in a sixth-place finish in 2021-22 and trailed in 16th – brings far less prize money and a hole in the accounts ledger. Leicester had more reasons to imagine themselves in the upper echelons of the table but went from five consecutive top-half finishes, two of them in fifth, to 18th in 2022-23.

It is notable, too, that Covid upended the footballing economy. Clubs were permitted to write off Covid losses in their accounts – and Everton’s felt suspiciously large – without them counting towards FFP calculations. But the collapse of transfer fees, especially in other leagues, reduced the market to sell players; it also led to a knock-on effect by restricting the spending power of Premier League rivals who might have otherwise sold well to Europe to finance their own buying.

Leicester had a reputation as fine traders, but they posted a record £92.5m loss for 2021-22, a rare year without a significant sale. In previous summers, players such as Ben Chilwell, Harry Maguire and Riyad Mahrez had brought in windfalls. That had come to feel part of the business plan, yet it can illustrate the precarious position clubs find themselves in: even the well-run are only a few poor decisions away from being plunged into trouble and Leicester made more than a few. Nevertheless, they did well to get £70m from Chelsea for the ever-injured Wesley Fofana in 2022; they then sold James Maddison, Harvey Barnes and Timothy Castagne the following year, after relegation, even though too many of the others who left did so on free transfers.

But a relatively sure touch in the transfer market started to desert them. There were other signings they could not sell for a profit – Danny Ward, Ayoze Perez and Rachid Ghezzal in 2018, Dennis Praet in 2019 – but two windows of recruitment came at a particular cost. The 2021 outlay on Patson Daka, Boubakary Soumare and Jannik Vestergaard, none either a footballing or financial success, was compounded by the January 2023 outlay on Harry Souttar and Victor Kristiansen.

In the process, Leicester contrived to get the worst of both worlds: spending some £30m to compound their FFP issues and yet still getting relegated. It also illustrates that they should have done more to try and cash in on Youri Tielemans, Caglar Soyuncu and Perez while they still could and, while the scale of Leicester’s breach is not yet known, the recurring theme between them, Everton and Forest is that much of it was avoidable: without accumulating so many players, with fewer bad signings, with more sales, the figures may be more presentable.

But it is also a hugely damning indictment of Brendan Rodgers, even if the cost of sacking him may be a further factor in taking Leicester over the FFP limit. Leicester’s former manager had a tendency to voice his complaints about the board’s reluctance to spend in the summer of 2022; now it is apparent that was based on sounder financial logic than his own.

Rodgers had excelled before. Last season, he underachieved with what has proved an unaffordable squad; it would be instructive to know if Leicester’s wage bill was higher than Newcastle’s, as they finished fourth; certainly before bonuses were triggered on Tyneside anyway.

The counter-argument is that Leicester suffered for their success. They were a club without big-six commercial or matchday income but, as they finished fifth twice and won the FA Cup, they had players who deserved to be paid accordingly. They were damned if they did, damned if they didn’t.

Viewed that way, Leicester were punished for their ambition. Certainly it put them in a position where they had less margin for error. But err Leicester did, both in plummeting into the Championship and with transfer-market missteps. Now they find themselves under a transfer embargo, facing a loss of points, their future threatened.

Saying they wanted charges “proportionately determined” risked accusations of hypocrisy, given that threats to take legal action against the Premier League and the Football League strike some as disproportionate. But what can be said is that the landscape has been transformed since Leicester won the Championship in 2014 – while breaching Financial Fair Play.

Except the EFL issued a joint statement with the club saying: 

 

“In reaching the settlement, the EFL acknowledges that the club did not make any deliberate attempt to infringe the rules or to deceive and that the dispute arose out of genuine differences of interpretation of the rules between the parties.”

 

Yet another example of the EFL conceding that they have incoherent rules and failed to implement them properly.

[Motty]

Maddison transfer 28th of June 23

[kenny]

Just now, Motty said:

Maddison transfer 28th of June 23

But the accounts relate to actual cash in the bank. If this arrives on the 1st July then it would go in the next set of accounts.

 

How odd that a club in the Big 6 would pay a day or so late being well aware of why we were accepting a lower fee to assist with PSR rules.

[sheffield_fox]

I still don't feel like I really understand what's happened that's got us into this mess. Can anyone explain it in a couple of sentences?

Is it that we had a transfer policy that revolved around selling one player for triple what we bought them for each year and we had one year where that didn't happen? Or is there more to it than that?

[Motty]

Believe we had offers the previous summer window but players not wanting to go. Would suggest due to wages.

[Motty]

7 minutes ago, kenny said:

But the accounts relate to actual cash in the bank. If this arrives on the 1st July then it would go in the next set of accounts.

 

How odd that a club in the Big 6 would pay a day or so late being well aware of why we were accepting a lower fee to assist with PSR rules.

Swings and roundabouts helps one year. Wrecks the other.

[kenny]

2 minutes ago, Motty said:

Swings and roundabouts helps one year. Wrecks the other.

Correct. 

 

In this case, the accounts for this year aren't published and presumably we won't try and claim the Maddison cash twice. I assume we will apply for an exception that it should have been paid into last years accounts which is one of many reasons why our case is a mess.