Newcastle
Leicester City will avoid ‘double jeopardy’ over their spending breach
Leicester will avoid the so-called ‘double jeopardy’ of being punished twice for the same spending breach despite facing charges for breaking Profit and Sustainability Rules [PSR] in two successive seasons.
The Premier League are expected to charge Leicester later this month with spending breaches over the 2020/23 accounting period, while the EFL have already publicly warned the club that they are forecast to be in breach of the rules for the 2021/24 seasons, which ends on 30 June.
Everton have expressed anger at the prospect of effectively getting punished twice for the same offence after being charged twice by the Premier League for breaches between 2019/22 and 2020/23, an argument that is expected to form a key part of their defence when the second case is heard next month.
Despite similarities between the two cases however, Mail Sport has learned that Leicester are not facing the same danger due to differences in the rules operated by the Premier League and EFL.
Under EFL regulations clubs who have already been sanctioned for a spending breach have their losses for that season capped at the maximum allowable level for the purposes of next year’s calculations, a figure which is £35million-a-year for a Premier League club and £13m in the EFL.
In Leicester’s case their losses for the 2022/23 season will be capped at £35m by the EFL, irrespective of how much they lose when their accounts are published later this month, a quirk of the rules that gives them a greater chance of avoiding being charged for the 2021/24 period. The Championship leaders can also avoid a charge by selling players before 30 June.
The differences between the Premier League and EFL rules will raise further questions over the viability of the PSR regulations, after Mail Sport revealed yesterday that Leicester dodged sanctions this season by claiming to be both a Premier League and an EFL club at the same time.
Leicester were not forced to comply with the Premier League’s new fast-track system for spending breaches this season as they were relegated last season, but also avoided being subjected to an EFL spending plan this year on the grounds that had been a top-flight club for most of the accounting period.
The Premier League allow clubs to run the risk of the double jeopardy to prevent them gaming the system by overspending in the first two years of the accounting period before cutting back in the final year.
The EFL’s approach is more lenient on the grounds that if clubs do get into financial trouble and are punished for overspending there is little chance of them correcting matter if their losses are simply rolled over.
