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Leicester could delay any points deduction until after promotion to Premier League

Leicester could delay any points deduction until after promotion to Premier League
Leicester could delay any points deduction until after promotion to Premier League

Leicester City could escape a points deduction this season if found to have broken spending rules amid a major loophole that may hand them a controversial Premier League return.

The English Football League (EFL) announced on Wednesday that the Championship leaders had been forecast to breach its profit and sustainability (P&S) regulations by the league’s independent Club Financial Reporting Unit (CFRU).

However, Telegraph Sport has been told that if Leicester – who are three and five points clear, respectively, of second and third place in the table – did end up breaking those rules, any points deduction would not be imposed until next season.

It has also emerged that the club are still in danger of being found in breach of the Premier League’s separate profit and sustainability regulations (PSR) covering the three previous years they spent in the division before their relegation last term.

However, despite top-flight clubs having voted last summer to introduce a fast-track process for dealing with PSR cases, Leicester will almost certainly be able to determine whether any points deduction for contravening the rules is applied this season or next.

That is because they had already been relegated when the regulations were updated, meaning they are not bound by the fast-track element of the rules unless they return to the division.

This loophole allowed the club to refuse to submit their most recent set of audited accounts, those for the 2022-23 season, to the Premier League back in December.

That date had been agreed by top-flight teams in order to try to ensure PSR breaches were dealt with – including any appeal – before the end of a given season.

The Premier League will ultimately get to see Leicester’s 2022-23 accounts in the coming weeks and, if the club are found to be in breach, any points deduction is likely to be applied as quickly as possible.

However, Leicester would almost certainly lodge an appeal in order to drag the case out until they learn whether such a sanction would cost them promotion.

If it did not affect the club’s promotion hopes, they could drop their appeal and accept the punishment. Otherwise, they could seek to delay the case until it was too late for any sanction to apply this term.

How that would go down at Everton and Nottingham Forest – who face points deductions this season for breaching PSR over the same period – remains to be seen.

Ironically, Everton stayed in the Premier League at Leicester’s expense last season, so would arguably have little cause for complaint if they ended up swapping places this summer.

Leicester paid the EFL £3.1m in 2018 to settle an FFP case

Leicester’s Championship rivals would have more of a case to feel aggrieved over any points deductions imposed next season that would have, if applied this term, denied the club promotion.

A source at another Championship club said that they were watching closely and that it would open “a massive can of worms” should Leicester be in breach this season but avoid a points deduction because they had already been promoted by the time their accounts were published.

It would also not be the first time Leicester would have clinched a place in the Premier League amid spending controversy.

Six years ago, they paid the EFL £3.1 million to settle a long-running Financial Fair Play case dating back to their last Championship triumph a decade ago.

Following their 2014 promotion, they went on to stage arguably the greatest escape in Premier League history before producing their fairy-tale 5,000-1 title triumph a season later.

In an ideal world, teams would be punished for breaching spending rules straight after the season in which the offences had been committed. But this is complicated by the fact that most clubs’ accounting periods do not end until the middle of the summer, buying them time to sell players post-season to balance the books.

Indeed, Leicester may yet do just that when the transfer window reopens to avoid breaching the EFL’s P&S rules. The existence of play-offs in the EFL also may also make it all but impossible to impose retrospective points deductions that are fair both on the offending team and their divisional rivals.

Leicester said in a statement on Wednesday: “Leicester City confirms it is in discussions with the football authorities regarding its profitability and sustainability calculations. The club remains committed to seeking an appropriate overall outcome in this matter.”

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