How Leicester City's landmark legal victory vs Premier League affects Leeds United in bid to avoid future points deduction — YEP 4/9/24

-

By Joe Donnohue

Leeds United's promotion rivals last season Leicester City have succeeded with an appeal against the Premier League's allegation that the club breached Profitability and Sustainability Rules (PSR) during the three-year accounting period ending June 30, 2023.

The Foxes were initially charged by the Premier League for exceeding the maximum loss threshold of £105 million over a three-year period, which the club challenged. Their case was referred to an independent commission which ruled in favour of the league, however Leicester appealed this decision.

Subsequently, an independent appeals board upheld Leicester's appeal on the grounds that by the end of the relevant accounting period, the club had already been relegated and were no longer under the Premier League's jurisdiction, therefore could not be charged.

"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," a Premier League statement read.

"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."

Leicester were alleged to have breached PSR for the accounting period ending June 2023, by £24.4 million, but will now avoid a sporting sanction in the form of a points deduction following the appeals board's decision.

Had Leicester submitted their audited accounts for the financial year ending June 2023 a month earlier at the end of May, as had been the case a year prior, the outcome of their PSR dispute may have proven different. The club were within their rights to amend the submission date of their accounts, per section 392 of the Companies Act 2006, whilst complying with the requirement in the Premier League's Rule A.1.8 that the accounting reference date should be between 31 May and 31 July.

The Foxes' argument was that at the time the Premier League brought their complaint, nine months after relegation, the club were no longer under the league's jurisdiction and therefore not subject to their financial controls, because clubs are not bound to such rules 'in perpetuity.'

So, what does this mean for Leeds, who this summer are suspected to have sold Archie Gray for £40 million in order to abide by financial controls and stay within the bounds of PSR?

In short, Leicester's landmark victory has exposed a sizeable loophole in the Premier League's Profitability and Sustainability regulations. The Foxes have escaped a points deduction which, due to the scale of the breach and previous sanctions handed down to Everton and Nottingham Forest, would almost certainly have been the case, because they were technically no longer a member of the league bringing the charges by the end of the relevant accounting period.

It means if Leeds were to have breached PSR for the accounting period which ended this past summer, the Premier League could not have successfully brought a charge against the club, if the legal counsel hypothetically representing Leeds argued the organisation no longer had jurisdiction over the club, which is currently an EFL entity.

Of course, this does not mean the EFL could not bring a separate charge, however the issue of jurisdiction does muddy the waters somewhat for clubs yo-yoing between the top two divisions of English football. Given the Premier League's maximum loss threshold is calculated over a three-year period, should a team find themselves relegated or promoted midway through an accounting period, to whom are they answerable on matters of financial fair play: the Premier League or EFL?

The YEP understands Leeds are said to be surprised at the ruling.

Popular posts from this blog

Leeds United board break silence after transfer window with statement on upcoming Elland Road development — YEP 2/9/24

-
By Joe Donnohue Leeds United have confirmed supporters' commemorative stones at Elland Road's Centenary Square will be replaced free of charge in a bid to improve their longevity. Beginning next month, Leeds supporters' personalised stones will be replaced with exact replicas, courtesy of a new company, to ensure of a 'much better quality' installation. The work is expected to take around two months to complete. An official club statement confirmed 'three larger stones dedicated to former managers Don Revie, Howard Wilkinson and Marcelo Bielsa' will also be installed, 'similar to those located in Bremner Square', while additional space for supporters to purchase new stones has also been factored into the project. “The club have taken on board recent feedback from supporters on the stones at Centenary Square, and we are really happy that we can now announce that all of the stones will be replaced," chief executive Angus Kinnear confirmed,...
Read more

The huge initial fee Leeds are set to receive for Crysencio Summerville’s move to West Ham — Leeds United News 31/7/24

-
Will Butcher West Ham United are closing in on a deal to sign Crysencio Summerville from Leeds United, and Ben Jacobs has shared how much Leeds will receive for the Dutchman. The 22-year-old has been strongly linked with the Elland Road exit door all summer and was targeted as the one big sale Leeds needed to make before the Profit & Sustainability Rules deadline this month. But instead, Leeds sold Archie Gray for £40m to Tottenham. Leeds have since sold five more players in the form of Diego Llorente, Marc Roca, Kris Klaesson and Charlie Cresswell – raking in around £60m in total. But more exits were always likely and Fabrizio Romano reported on Wednesday afternoon that West Ham had agreed personal terms with Summerville, and talks for a fee were ongoing with the Yorkshire side. Now, the story has moved on with multiple sources claiming a deal is done between Leeds and Angus Kinnear’s old club. The Dutchman is expected to sign a five-year at the London Stadium, until Jun...
Read more

Leeds United transfer state of play as Whites knock back low bid and assert wing pair stance — YEP 3/7/24

-
By Graham Smyth Leeds United are not actively looking to cash in on Crysencio Summerville and Willy Gnonto and believe any further outgoing transfer business will be done on their terms. The Whites, who sold Archie Gray to Tottenham Hotspur on Tuesday for £40m, expect that there will be continued interest in wing pair Summerville and Gnonto as the summer transfer window progresses. Summerville has been a target for Premier League side Brighton and Hove Albion but their interest has not yet materialised into a bid. The Albion did, however, send a £30m proposal for Georginio Rutter, which Elland Road chiefs rejected. Rutter is not expected to try and force an exit this summer and appears settled at Leeds after a far more positive second season in English football. The sale of Gray has helped put Leeds into a position where they do not need to sell star players and can dictate any moves that do happen. Club sources say they are not actively looking to sell the likes of Summerville o...
Read more