da dobrowin： Leicester City reportedly face the looming threat of breaching financial regulations and risk a potential points deduction next season.
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Mounting financial losses a concern for LeicesterLikely to breach the PSR loss limitsNeed to sell players to raise money and avoid punishmentGettyWHAT HAPPENED?
Despite leading the Sky Bet Championship, a series of financial losses have placed the club in jeopardy, even if they secure promotion back to the Premier League this season. According to regulations, Leicester can incur losses of up to £83 million over a three-year period, with £70 million allowed for two years in the Premier League and £13 million permitted for a year in the EFL. However, the club's 2021-22 accounts revealed a staggering loss of £92.5 million, with another significant deficit expected for the 2022-23 accounts, set to be disclosed imminently. Notably, expenditures on academies, women's football, and facilities are exempt from the Profit and Sustainability Regulations (PSR) calculations.
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Leicester also faced allegations of breaching the Premier League's £105 million limit for their most recent three-year period in the top flight. However, due to relegation, they seemingly avoided sanctions similar to those imposed on Everton and Nottingham Forest.
According to the Football League made an unsuccessful attempt to impose a business plan on the club following serious concerns raised by financial information submitted in November. Leicester successfully contested the applicability of the rule, asserting their status as a Premier League club last season with leading sports lawyer Nick De Marco KC believed to have spearheaded the club's defence.
Getty ImagesWHAT DID LEICESTER SAY
Leicester remain defiant that the EFL has acted beyond its realm of powers after the Club Financial Reporting Panel (CFRP) ruled in their favour.
The Foxes put out a statement that read: "Although the Club is pleased that the CFRP’s decision found in its favour, it is concerned that it was necessary for the CFRP to intervene in this way to prevent the CFRU from acting outside of established EFL rules.
“Leicester City confirms it is in discussions with the football authorities regarding its profitability and sustainability calculations. Notwithstanding the CFRP’s decision, the Club remains committed to seeking an appropriate overall outcome in this matter.”
EFL TIGHTENING THE NOOSE
The EFL intends to address regulatory loopholes in response to Leicester's case, aiming to ensure that clubs provide a clear plan to manage expected breaches of spending rules. It confirmed that the independent club financial reporting unit (CFRU) believes the club has breached the regulations for the three years ending with the financial year 2023-24.
An EFL statement said: “Earlier this season, based on financial information submitted by the club, the CFRU concluded that the club was forecasting to breach the profitability and sustainability loss limits for the three-year period ending with the financial year 2023-24.
“The club argued that . . the CFRU had no right to require a business plan in respect of season 2023-24. The independent club financial reporting panel concluded that under the rules as currently written, the club was under no obligation to submit and agree to a business plan.”