Leicester City are at serious risk of breaking the English Football League’s profit and sustainability regulations, raising concerns about the club’s financial picture and a possible points deduction.
The financial pressures are likely to result in the need to sell players this summer. If found in breach, it is unclear when any punishment would come into effect.
The EFL believes Leicester, who have a three-point lead at the top of the Championship, are on course to break financial rules relating to this season. The club had to submit its projected 2023-24 accounts by 1 March and the EFL believe those figures would equate to a breach, according to the league’s independent club financial reporting unit (CFRU).
Under EFL rules, clubs cannot exceed making an £83m loss across a three-year period, whereas in the Premier League the loss limit is £105m.
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The EFL determined that it was appropriate for Leicester to submit a business plan to demonstrate how it planned to comply with spending limits but the club said the relevant financial rules did not apply because they were in the Premier League last season.
In 2018, Leicester agreed to pay the EFL £3.1m to settle the league’s claim they breached financial rules in 2013-14. Queens Park Rangers agreed a £42m settlement with the EFL after breaching spending limits. After winning promotion to the Premier League as champions in 2014-2015, Bournemouth were fined £7.6m for breaching financial fair play rules and later agreed a £4.75m settlement with the league. The rules and parameters, however, have changed since those cases.
“Leicester City is responsible for meeting its obligations in respect of the P&S rules which will be assessed along with the submissions of all other clubs in accordance with the league’s established processes,” read an EFL statement.
A Leicester statement on Wednesday said the EFL’s financial reporting unit acted outside of its powers in its dealings with the club.
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Leicester are in the FA Cup quarter-finals and could raise money from further progress in the competition while a number of players, including Jamie Vardy, Kelechi Iheanacho and Wilfred Ndidi are out of contract at the end of the season.
