Related Articles The Premier League is surprised and disappointed by the independent Appeal Board’s decision to uphold an appeal lodged by Leicester City FC regarding the League’s jurisdiction over the club’s alleged breach of its Profitability and Sustainability Rules (PSRs) when the club was a member of the Premier League.
In March this year, the Premier League referred Leicester City to an independent Commission for an alleged breach of PSRs relating to the assessment period ending financial year 2022/23. Once submitted, the club’s financial results demonstrated that it had exceeded the permitted £105million threshold for the relevant period. Leicester City subsequently challenged the Commission’s authority to hear the case on the grounds of jurisdiction. This challenge was dismissed by the independent Commission (click here to read in full), a decision which Leicester City appealed.
That appeal has been upheld by an independent Appeal Board on the grounds that the club’s accounting period which ended on 30 June 2023, came after the point the club had ceased to be a member of the League. The Appeal Board’s decision effectively means that, despite the club being a member of the League from Seasons 2019/20 to 2022/23, the League cannot take action against the club for exceeding the relevant PSR threshold in respect of the associated accounting periods. Click here to read the full written reasons.
The Premier League is very disappointed with the Appeal Board’s decision, and the limited reasons provided for it. The League remains of the view that the original Commission took the right approach in interpreting the rules in a practical and workable way that gives effect to their intended purpose. In overturning the original Commission’s findings, the Premier League considers the Appeal Board’s decision fails to take into account the purpose of the rules, all relevant parts of the PSRs and the need for effective enforcement of alleged breaches to ensure fairness among all clubs. If the Appeal Board is correct, its decision will have created a situation where any club exceeding the PSR threshold could avoid accountability in these specific circumstances. This is clearly not the intention of the rules. It is of critical importance that the Premier League is able to enforce its rules consistently to maintain the principle of fairness. The League will now consider what further action it can take to ensure this is the case.
Appeal Boards are independent of the Premier League and member clubs and are appointed by the independent Chair of the Premier League Judicial Panel.
Profitability and Sustainability Rules (see Premier League Handbook Section E):
- All Premier League clubs are assessed for their compliance with the Profitability and Sustainability Rules (PSRs) each year.
- Compliance is assessed by reference to the club’s PSR Calculation, which is the aggregate of its Adjusted Earnings Before Tax for the relevant assessment period.
- A club will be in breach of the PSRs if its PSR Calculation over the relevant period results in a loss in excess of £105 million.
- At the 2023 Annual General Meeting (AGM), Clubs agreed to introduce Standard Directions for PSR cases (Appendix 1 to the Rules) that seek to ensure such cases are resolved in the same season the complaint is issued, with any sanction handed down prior to the subsequent Annual General Meeting.
Leicester City were relegated to the EFL Championship before the Premier League’s new Standard Directions, which prescribe a timeline within which PSR cases should be heard, came into force.
Premier League investigations, independent Commissions and Appeal Boards:
- The Premier League Board has the power to investigate any suspected or alleged breach of Premier League Rules.
- There are a number of options available to the Board where it suspects or alleges a breach of the Rules. For PSR cases, the matter will be handed to an independent Commission to determine whether there is a breach and, if so, what the sanction should be.
- The League has access to an independent Judicial Panel, comprising a number of legal, financial and other experts. Members of the Judicial Panel are appointed, in accordance with Premier League Rules, by its independent Chair, Murray Rosen KC, an experienced barrister.