Loops holes in the Premier League Rules have come to light when trying to enforce its Profitability and Sustainability Rules (PSR) on relegated clubs has been highlighted by Leicester City’s successful appeal reported BBC online Sports Article.
Leicester avoided a points deduction after breaching the PSR limit of £105 million in losses over three years, specifically during the 2022-23 season when they were relegated. Leicester argued that the Premier League had no jurisdiction to penalise them post-relegation, and the appeal board, consisting of senior legal figures, ruled in their favour.
The board concluded that Leicester did not breach the PSR rules, primarily due to the timing of their accounting period, which ended on June 30, 2023, after the club had already left the Premier League. The ruling exposed flaws in the Premier League’s rules, as clubs can manipulate accounting periods to evade sanctions post-relegation. The appeal board also noted that the PSRs were not drafted with the Premier League’s accounting rules in mind, creating a loophole.
‘Nick Mashiter, BBC Sport football news reporter
It is not just relief, there is a feeling of vindication at the King Power Stadium after the ruling.
Leicester stood their ground and successfully argued the Premier League acted outside of its own jurisdiction to charge the Foxes with a breach of Profit and Sustainability Rules (PSR).
While they may be accused of exploiting a loophole, the club want the rules to be enforced as written, rather than being open to interpretation.
Having extended their accounting period to 13 months – filing on 30 June 2023 – to bring Leicester’s accounting in line with the rest of the business, the Foxes were not a Premier League member, having handed in their shares after relegation, and therefore could not be bound by the top flight’s rules.’
This ruling poses a challenge for the Premier League, as it prevents similar actions against other relegated clubs, potentially allowing them to avoid penalties for financial breaches. The league expressed disappointment, arguing that it undermines fairness and the enforcement of financial rules.
This case reveals a loophole in the PSR enforcement, where relegated clubs could alter accounting periods to escape penalties. Additionally, clubs could exploit legal ambiguities in other league rules, further weakening the Premier League’s regulatory authority.
