Leicester City is facing the possibility of another Premier League charge over breaches of profitability and sustainability rules (PSR) for the second consecutive season. The club, which has been under scrutiny for its financial performance, submitted its financial accounts for the 2023-24 season by the deadline of 5pm on New Year’s Eve. These accounts are being reviewed by Premier League authorities to determine whether Leicester has violated PSR regulations.
Leicester’s financial difficulties have been ongoing, with the club recording significant losses in the past two years. In the 2022-23 season, Leicester reported pre-tax losses of £92.5m, followed by another £90m loss in the 2023 financial year. As a result, the club is at risk of facing another charge for breaching the PSR. The Premier League’s rules limit clubs to a maximum loss of £105m over a three-year period if they have been in the top flight for the entire period. However, Leicester’s situation is more complicated because they were relegated at the end of the 2022-23 season, which means their permitted losses for the current three-year cycle are reduced by £22m due to the stricter financial controls in place for clubs in the English Football League (EFL).
Leicester’s financial position has been affected by player sales, which will be factored into their accounts. Key transfers include Harvey Barnes’s £38m move to Newcastle, Timothy Castagne’s £15m transfer to Fulham, and the £10m compensation received for the departure of manager Enzo Maresca to Chelsea. However, the £30m sale of Kiernan Dewsbury-Hall to Chelsea, which took place in July 2024, will not be included in the current financial cycle. These player sales will help to reduce Leicester’s losses for the period under review, but the club’s overall financial position remains precarious.
Leicester’s legal team is confident that the club will avoid facing another charge, arguing that their financial situation will fall within the Premier League’s guidelines. However, sources within the Premier League suggest that Leicester may still have a case to answer, given the size of their losses in recent years.
This situation is particularly concerning for Leicester, as the club has already faced a charge for breaching PSR in the 2022-23 season. They narrowly avoided a points deduction earlier this season after successfully arguing that, due to their relegation, they were not in the Premier League when they submitted their accounts for that period. A second charge, particularly if it results in a points deduction, could have severe consequences for Leicester’s survival in the Premier League, with the club currently second-bottom in the league at the halfway point of the season.
The Premier League’s new regulations, introduced 18 months ago, are designed to ensure that any breaches of PSR are dealt with swiftly. Under these rules, clubs that have posted aggregate losses over two consecutive accounting periods are required to submit their accounts by 31 December. Premier League lawyers and accountants are currently reviewing the financial data to determine whether Leicester has breached the rules. A decision on whether to charge the club will be made by 13 January.
Leicester is not the only club facing financial scrutiny, as other teams, including Chelsea, Everton, and Nottingham Forest, have also been under pressure due to their financial performance. However, these clubs have been able to reduce their losses through player sales and are confident that they will comply with PSR regulations. For Leicester, the outcome of this investigation could be crucial to their hopes of staying in the Premier League.
