What next for Leicester City's PSR case with points deduction still possible

[Foxin_Mad]

The stupid rules should actually be renamed to the Red Cartel Protection Rules

[Jobyfox]

Let’s pretend for one moment that the rules are designed to stop teams achieving a competitive advantage rather than to protect the cartel. Under this criteria changing the rules for relegated clubs seems unnecessary.

 

Leicester have been punished! In trying to stay within the rules they made no signings prior to the season they were relegated. This directly led to the most extreme sanction of all - relegation.
 

Pursuing LCFC after the event just seems unnecessarily vindictive. It’s like applying a rule of double jeopardy whereas Forest and Everton only had a single sanction. They (and we) would certainly have chosen points deductions over relegation. 
 

The issue of compliance in the EFL should then be considered a separate issue, but we certainly lost Barnes, Tielemans and Maddison whilst trying to comply with their spending rules. 
 

There is no need for further punishment or new rules to cover this eventuality for relegated clubs in the future. Relegation, combined with loss of revenue  and compliance  with the new rules is deterrent enough. 

 

 

* All the above, of course, assumes that the rules were fit for purpose, which they clearly aren’t, and should be thrown in the bin. New rules in a regulated environment should be an absolute priority, although it’s a forlorn hope that this will create a level playing field for all 

[Qwerty]

18 hours ago, dave12 said:

Surely the past 3 cycle is now irrelevant, when it has been found that we didn’t breach the rules in 22/23, meaning that there is a year missing from the cycle and cycle is effectively incomplete and irrelevant???

I could be wrong, but my understanding is that we were known to have breached the rules in 22/23 (our own published accounts showed that), but because we were in the championship by the time we were charged, the charge wasn't valid.  We still breached the FFP rules.  

[Pliskin]

Can we deduct the premier league points for being bellends?

[st albans fox]

40 minutes ago, Qwerty said:

I could be wrong, but my understanding is that we were known to have breached the rules in 22/23 (our own published accounts showed that), but because we were in the championship by the time we were charged, the charge wasn't valid.  We still breached the FFP rules.  

You’re not wrong - the three year cycle doesn’t care about single years 

we breached but no one had the authority to charge us 

[Lambert09]

4 hours ago, Jobyfox said:

Let’s pretend for one moment that the rules are designed to stop teams achieving a competitive advantage rather than to protect the cartel. Under this criteria changing the rules for relegated clubs seems unnecessary.

 

Leicester have been punished! In trying to stay within the rules they made no signings prior to the season they were relegated. This directly led to the most extreme sanction of all - relegation.
 

Pursuing LCFC after the event just seems unnecessarily vindictive. It’s like applying a rule of double jeopardy whereas Forest and Everton only had a single sanction. They (and we) would certainly have chosen points deductions over relegation. 
 

The issue of compliance in the EFL should then be considered a separate issue, but we certainly lost Barnes, Tielemans and Maddison whilst trying to comply with their spending rules. 
 

There is no need for further punishment or new rules to cover this eventuality for relegated clubs in the future. Relegation, combined with loss of revenue  and compliance  with the new rules is deterrent enough. 

 

 

* All the above, of course, assumes that the rules were fit for purpose, which they clearly aren’t, and should be thrown in the bin. New rules in a regulated environment should be an absolute priority, although it’s a forlorn hope that this will create a level playing field for all 

we were good in one of the 3 years though. The previous 2 we overspent massively for our revenue, we acted like a bigger club than we are… we enjoyed success and finished in europe in the first, but the second was the one where we underachieved and everything in the business side went south. 

 

Arguably, because we cheated on the 3 year cycle, you can say that that european finish was not fair and we took the spot from a club who hadn’t broken the rules. 

 

I despise the rules and the motivation behind them, but we flagrantly ignored them at the end of the day.  

 

 

[Qwerty]

1 hour ago, st albans fox said:

You’re not wrong - the three year cycle doesn’t care about single years 

we breached but no one had the authority to charge us 

So clearly for the 3 year cycle of 20/21, 21/22, 22/23 we were overspent.  We've got away with it because of the timing loophole.

After accounts for 23/24 are submitted in December (along with all PL clubs) they'll look at the 3 year cycle 21/22, 22/23, 23/24.  And we just have to hope that we weren't over spent in that cycle. 

In 22/23 we didn't spend much, because summer 2022 was when Rodgers had a strop at lack of signings.

And 23/24 should be OK because of KDH and Maresca.

So I guess it all hangs on 21/22, and how badly overspent we were in that season. 

[joachim1965]

Newly promoted clubs have the full amount to play with, £105m.

If we are looking to breach, just sell the training ground to king power, Premier league gave the green light for Chelsea to sell two hotels to itself for £76m.

[Nolucklcfc]

2 minutes ago, Qwerty said:

So clearly for the 3 year cycle of 20/21, 21/22, 22/23 we were overspent.  We've got away with it because of the timing loophole.

After accounts for 23/24 are submitted in December (along with all PL clubs) they'll look at the 3 year cycle 21/22, 22/23, 23/24.  And we just have to hope that we weren't over spent in that cycle. 

In 22/23 we didn't spend much, because summer 2022 was when Rodgers had a strop at lack of signings.

And 23/24 should be OK because of KDH and Maresca.

So I guess it all hangs on 21/22, and how badly overspent we were in that season. 

I can’t even remember who we signed in 21/22 was that the vesterguaard/ daka year? 

[Qwerty]

14 minutes ago, Nolucklcfc said:

I can’t even remember who we signed in 21/22 was that the vesterguaard/ daka year? 

No idea.  All I remember is that at the end of the 21/22 season, Rodgers talked about a rebuild.  Then a few weeks later he said he'd been told there was no money and we weren't signing anyone. 

[davieG]

22 minutes ago, Qwerty said:

No idea.  All I remember is that at the end of the 21/22 season, Rodgers talked about a rebuild.  Then a few weeks later he said he'd been told there was no money and we weren't signing anyone. 

https://www.foxestalk.co.uk/history/browse/?season=2021

 

In

Patson Daka        RB Salzburg    £23,000,000    01.07.2021
Boubakary Soumaré        Lille    £17,000,000    02.07.2021
Jannik Vestergaard        Southampton    £15,000,000    13.08.2021

 

Out

Josh Knight        Peterborough United    £500,000    02.07.2021
Rachid Ghezzal        Besiktas    £2,700,000    12.08.2021

[Phenom]

On 04/09/2024 at 06:59, davieG said:

https://www.leicestermercury.co.uk/sport/football/football-news/what-next-leicester-citys-psr-9530264

 

How City won their appeal, what it means for Steve Cooper and his players, and why issues around the 23-24 accounts mean that they are not yet completely out of the woods

Sport
ByJordan Blackwell
13:32, 4 SEP 2024

It should not be understated how significant Leicester City’s victory on appeal is. The points deduction they have saved themselves means it’s bigger than any single win they will earn on the pitch this season.

But City are not out of the woods yet. There’s another set of accounts that need to be assessed for potential breaches of Profit and Sustainability Rules (PSR) before it can be definitively said that they will not receive a points deduction over their finances this season.

Here, we’ve compiled the most common and pressing questions on City’s dispute with the Premier League, their PSR cases, and what happens next.

 

How did City win their case?

An independent appeal board agreed with City’s argument that the Premier League’s rules did not apply to them when they were charged with a breach of PSR. On June 30, 2023, the final date of the 22-23 accounting period, and the final date of the three years of finances that the Premier League were due to assess, City were not a Premier League club.

Following their relegation in May 2023, City’s Premier League shares were passed to Luton on June 13, 2023. At that point, they ceased to be a Premier League club and were no longer subject to their rules.

That was the basis of City’s argument. Under the Premier League’s own definition of a member club, City were not one.

Despite the commission’s original finding that determining a specific date of the alleged breach of the £105m losses threshold was not necessary, the appeal board agreed with City’s argument that their finances could not be assessed until the financial period had concluded. Therefore no judgement could be made on whether they had exceeded the £105m threshold until after June 30, by which point they were not a Premier League club.

 

Why was the change to the accounting date significant?

On April 23, 2023, City extended their accounting period, moving the final date from May 31, 2023, to June 30, 2023. This is significant because had their financial year ended in May, they would not yet have passed their Premier League shares to Luton, and so their argument that they were no longer a Premier League club would have been invalid.

City informed the Premier League of their decision to change their accounting period on March 8, 2023, more than a month before it officially came through. It’s deemed that there is nothing untoward in City changing their accounting period. They are permitted to do so within the Premier League’s rules, and can even have an end date as late as July 31.

 

Can the Premier League appeal this judgement?

Yes, technically. But it seems they are very unlikely to do so, and even less likely to win. Their appeal would have to be on the basis that the appeal board was not fit for purpose, but, as City were keen to point out, it was made up of a panel of three experienced, senior lawyers, two of whom were former Court of Appeal judges.

 

So it’s done?

Yes. City have not breached PSR for the 22-23 season. That is now definite. They will not receive a punishment, points deduction or otherwise, for that season’s finances.

Is that including the charge over failing to submit their accounts?

Yes. So there were two charges originally, one for the alleged breach of PSR, and the other for failing to submit their latest audited accounts. Again, at the point at which they were charged over such an alleged offence, they were not a Premier League club and so the charge is dismissed.

 

How many points would City have been deducted?

Seven, possibly. It is not in dispute that City exceeded the £105m threshold. They admitted in their own accounts, published in the spring, that they “anticipated they may be found not in compliance” with PSR.

The details emerging from the appeal board’s judgement shows that the Premier League’s PSR calculation of City’s finances came in at £129.4m. That’s £24.4m above the threshold.

The rules set out by the Everton and Nottingham Forest cases are that a PSR breach leads to a three-point deduction, with a further deducted point for every £6.5m a club is above the threshold.

That works out at seven points taken away. However, there would have been arguments over the exact figure at which City had exceeded the threshold, while mitigating circumstances can often crop up during hearings and judgements. So it’s not definitive that it would have been a seven-point deduction.

Why might City still be unhappy, despite winning their appeal?

There are not full-on celebrations going on inside the club. It seems there is still some frustration that because of this process and the time it took to conclude, it affected their transfer business this summer.

It’s quite clear that they were not as attractive a club in the transfer market because they had a potential points deduction hanging over them, one that was public knowledge. Therefore, they may feel they weren’t able to recruit players they otherwise would have enticed had the case never been brought.

 

What does this mean for City’s season?

For Steve Cooper and his players, they can get on with the Premier League campaign knowing that one of the big factors potentially affecting their season is now out of the window. But it’s not the case that they definitely won’t receive a points deduction this season, because there is still the matter of their 23-24 finances. More on that further down.

 

What does this mean for the Premier League?

They’ve said they’re “surprised” and “disappointed”, but they’re probably a little embarrassed as well. This has come about simply because their rules are not watertight. They were acting on the spirit of PSR and not on the wording, and so it’s likely to mean a rewrite of their own regulations so that no club can copy what City have done.

 

What does it mean for other clubs?

There’s bound to be anger. It will be seen around the country that City have got off on a technicality. The clubs in particular who will be frustrated are Everton and Forest, who received points deductions for their breaches of PSR; Leeds, who may feel they were denied promotion at City’s expense; and this season’s relegation battlers, who will be frustrated if City finish above them by seven points or fewer.

 

What does it mean for the January transfer window?

Not a lot, really. As a Premier League club, City still have to pay attention to PSR in case of future breaches. They don’t intend to be relegated so that they can call on this argument every time.

 

What about the 23-24 finances? Are City in the clear?

This is now the focus for City. Because, no, they’re not in the clear on the three-year accounting cycle ending with 23-24. Mainly, that’s because they have not been assessed yet, but the EFL, whose jurisdiction City were under, suspected that the club may be in breach of PSR, hence placing them under a transfer embargo.

City made moves to help stay within the threshold late in the financial year, receiving around £10m in compensation for Enzo Maresca and his staff’s move to Chelsea, plus £30m for the sale of Kiernan Dewsbury-Hall to Stamford Bridge, but it’s not certain they stayed within the £83m of allowable losses. City will now be putting together their own PSR calculation to submit to the Premier League by December 31.

 

Who is in charge of analysing City’s 23-24 finances? The EFL or the Premier League?

This is a tricky one. You would suspect the EFL, because City were in the EFL in the 23-24, but there may be a handover, and so it then comes down to the Premier League’s judgement again. For now, that’s not certain.

Does the same defence not apply – that City were not an EFL club at the point at which their financial year concluded?

It appears not, simply because the EFL have covered for this possibility. In their rulebook, under financial fair play judgements, it states: “If a Club is promoted or relegated out of the Championship Division that Club shall, notwithstanding promotion or relegation, remain bound by these as if it were still a Championship Club, until such time as it has complied with all of its obligations relating to its last Season as a Championship Club.”

And in any case, as mentioned above, there may have been a handover, with the Premier League now in charge of assessing City. This is going to be a hot topic for the remainder of this season.

 

When will the 23-24 finances be assessed?

Essentially, it will begin whenever City submit their PSR calculation. They have to submit their own assessment to the Premier League by December 31, even though it is for a season in which they were in the EFL.

From there, the governing bodies will make an assessment. So last season, Everton and Forest were charged in January after submitting their PSR calculations before the end of December, and they had received their punishments before the end of the season. Forest’s failed appeal was also decided before the end of May.

 

If City are in breach for 23-24, what would be the punishment and when would it be applied?

Again, this is uncertain. It likely would be a points deduction and likely would come in before the end of this season, but the uncertainty around City being an EFL club at the time may mean there’s more of an argument to be had. But in short, and this is important, City could still receive a points deduction this season for last term’s finances, albeit so could all of the 19 other clubs in the Premier League.

 

Does the ruling on 22-23 finances make a difference for 23-24?

Possibly, yes. This is pretty interesting. The EFL has a double jeopardy ruling, by which a club’s losses are capped if they have already been punished for a PSR cycle.

Let’s say City had been found in breach of PSR for the three-year cycle ending in 22-23 and had been punished for that. When the EFL then comes to assess the three-year cycle ending in 23-24, they would cap the losses for the first two of those three seasons, because essentially they’ve already been assessed.

In the Premier League, allowable losses stand at £35m per season. In the Championship, it’s £13m per season. Applying the double-jeopardy rule, the EFL would have capped City’s losses at £35m for 21-22 and 22-23, the first two years of the cycle they are assessing, and so essentially, they would be solely judging City on whether they exceeded the £13m allowable losses for 23-24.

That City have not been punished, it means the full three-year cycle will be considered and the club judged on whether they have exceeded the allowable £83m losses. Before City could have employed the double-jeopardy defence, but now don’t have that in their back pocket.

This is really helpful, thanks.

[Nolucklcfc]

11 minutes ago, davieG said:

https://www.foxestalk.co.uk/history/browse/?season=2021

 

In

Patson Daka        RB Salzburg    £23,000,000    01.07.2021
Boubakary Soumaré        Lille    £17,000,000    02.07.2021
Jannik Vestergaard        Southampton    £15,000,000    13.08.2021

 

Out

Josh Knight        Peterborough United    £500,000    02.07.2021
Rachid Ghezzal        Besiktas    £2,700,000    12.08.2021

This is the one then because we spent nothing the season after. Hopefully Percy is right 

[st albans fox]

2 hours ago, Nolucklcfc said:

This is the one then because we spent nothing the season after. Hopefully Percy is right 

That transfer spend is negative 11m in that season’s psr 

we know it’s the wages that have killed us 

21/22 is the year that ‘killed us’ because we made no big sale in it.  

[5waller5]

2 hours ago, davieG said:

 

In

Patson Daka        RB Salzburg    £23,000,000    01.07.2021
Boubakary Soumaré        Lille    £17,000,000    02.07.2021
Jannik Vestergaard        Southampton    £15,000,000    13.08.2021

 

 

Crikey. In the history of the Premier League this must surely be the worst transfer window, for any club, ever

[MarriedaLeicesterGirl]

17 minutes ago, 5waller5 said:

Crikey. In the history of the Premier League this must surely be the worst transfer window, for any club, ever

On many levels, yes. But I still think the summer of 2016 - after we won the Premier League and was in the Champions League - was horrifyingly bad.

[Ricey]

This is significant from the Athletic article:

 

[Chrysalis]

11 hours ago, Trent Steel said:

soak it up peeps, they wont doing anything else this season, if anything it will be next and they will try. but sod em

 

i've been bombarded with cheating bin dipper messages since the news came out from florist scum, so they are trying to tell me that if they found a loophole to avoid points deduction they would use it ? absolute b****cks, w@nkers!

Yeah there is a few who have the logic of not charged = cheaters, charged and penalised = not cheaters.

[coolhandfox]

I'm going to stick this in here as it may reduce some fans' anxiety about the next PSR period. It is a chunk of an article by Swiss Ramble, who has been writing online about football finance since 2009. Swiss Ramble is a subscription service, and I recommend it if you have an interest in football finances: https://swissramble.substack.com/.

 

Before reading, remember that clubs have not yet published accounts for 2023/24, so his estimates are based on the figures for last season. He applied some fairly broad assumptions for 2023/24 and has us making a profit of 8m dues to player sales.

PSR Overview 2023/24

Using the estimated £8m profit for 2023/24, assuming that the allowable deductions were the same as the £22m made in 2022/23, would lead to an adjusted PSR profit of £30m. That would give a PSR loss of £82m over the 3-year monitoring period, meaning that Leicester would be just about within the maximum loss of £83m.

 

Edited 6 September by coolhandfox

[davieG]

https://www.leicestermercury.co.uk/sport/football/football-news/leicester-city-lawyer-nick-de-9534898

 

Leicester City lawyer Nick De Marco issues response to Premier League's 'concerning' statement
The lawyer who represented Leicester City in their successful appeal has given his thoughts on the case and the Premier League's 'uncharacteristically critical' response

ByJordan Blackwell
11:04, 6 SEP 2024

The Premier League’s critical response to the appeal board’s judgement in Leicester City’s PSR case is of “concern”, the lawyer who represented the club has said.

 

 

Writing his thoughts in a post on the LawInSport website, De Marco said: “Following the publication of the decision the PL issued an uncharacteristically critical statement about the Appeal Board’s decision. It is not unusual for parties to feel ‘surprised and disappointed’ by decisions after they have lost a case, but it is of some concern that the PL, as regulator, expressed such forthright criticism of one its independent Appeal Boards, which was made up of three very senior and distinguished lawyers, two of whom were previously Court of Appeal judges.

“Just as government ministers are advised not to criticise the courts, so too sports regulators should be careful criticising panels when they don’t get the result they want. Such criticism risks undermining the independence and integrity of the Premier League’s own judicial process.

“The case represents a further welcome restatement of the correct approach to contractual interpretation of sporting bodies’ rule. Those acting for regulators sometimes feel forced to fall back on a ‘just interpret these rules so they work for us’ argument, sometimes even relying on their own badly-drafted rules. But there must be limits to that submission. Rules cannot simply be made up as you go along, to suit each case as it arises. There needs to be clarity and certainty.

“These cases highlight some of the flaws in the drafting of financial rules in football, which will always be a difficult and complex area. It is often impossible to provide for all potential outcomes, but the failure to fully align the Premier League and EFL Championship PSR to deal with the inevitability of relegation and promotion is an obvious example of something missing.
“The fact that, in these recent cases, regulators cannot get away from the words of their rules by asking panels to read them so as to deal with the problem in hand, one might hope, might mean more care shall in the future be taken in the drafting (and review) of such rules.

“The author hopes that the PL, in particular, having been embroiled in so many expensive and distracting recent legal disputes about its PSR rules will carefully consider, and should not rush into, any new proposed financial regulatory rules.

“Those interested in fairness and consistency in sports law disputes can take comfort in the tendency of these recent decisions to apply (other than in exceptional circumstances) the words of the rules rather than the alleged post-facto unwritten intentions of those who drafted them.”

[coolhandfox]

Second slap down of the PL in a week by Nick De Marco.

[Spudulike]

[Nalis]

21 hours ago, davieG said:

https://www.foxestalk.co.uk/history/browse/?season=2021

 

In

Patson Daka        RB Salzburg    £23,000,000    01.07.2021
Boubakary Soumaré        Lille    £17,000,000    02.07.2021
Jannik Vestergaard        Southampton    £15,000,000    13.08.2021

 

Out

Josh Knight        Peterborough United    £500,000    02.07.2021
Rachid Ghezzal        Besiktas    £2,700,000    12.08.2021

That gives me PTSD

[Out Foxed]

you can shove your ****ing psrrrrr

[Legend_in_blue]

Surely this PSR garbage can get in the bin if it were replaced with an introduction of a cost cap and an associated player wage cap that is sensible and affordable by all in the premier league.