Point deduction, transfers, dewsbury-hall – leicester city psr charges explained

Leicester City are in the thick of yet another dispute over Profit and Sustainability Rules. While City have escaped punishment over their 22-23 account, they’re now in trouble over their

23-24 finances, and this time, it doesn’t look like there’s a route out. Here, we answer some of the questions that have arisen since the news broke on Tuesday morning. WHY HAVE CITY BEEN

CHARGED NOW? When the Premier League announced in January that no clubs had been charged over their 23-24 accounts, it had seemed like City were out of the woods. But what happened was that

the Premier League did not move on to assess City’s 23-24 finances because they were still dealing with the 22-23 matter. That is now over and the tribunal dismissed the Premier League’s

challenge, saying the appeal board that found in City’s favour had not interpreted the rules perversely and so there could be no reversal of the decision. With a line finally drawn under

that, the Premier League moved on to the 23-24 finances, and have subsequently hit City with three charges. CAN CITY NOT ARGUE THAT THEY WILL BE IN THE CHAMPIONSHIP AGAIN? The wording of the

rules that City successfully exploited in their appeal have now been updated by the Premier League, so that loophole has been closed off. City being relegated and moving into the

Championship makes no difference this time. The EFL updated their rules recently too, aligned more closely with the Premier League and allowing the top flight to assess the accounts of

promoted clubs, as the financial year in question refers to City’s Championship-winning campaign. City accept that the Premier League have jurisdiction this time, and do not appear to be

appealing. HOW LONG WILL THE PROCESS TAKE? It’s difficult to be certain on that, but the quickest process so far was last year, when it took around two months from Nottingham Forest’s charge

to the announcement of their points deduction. They appealed, and that process took another two months. It does not feel unreasonable to suggest that the independent commission will come to

a decision before the new Championship season begins. WILL CITY GET A POINTS DEDUCTION IN THE CHAMPIONSHIP? HOW BIG COULD IT BE? That’s a possibility. The aligning of the rules between the

Premier League and EFL means they can now enact points deductions on each other’s behalf, something they could not do previously. The severity of the points deduction would be dependent on

the level of the breach and how far past the loss threshold City were. With the sale of Kiernan Dewsbury-Hall and the compensation received for Enzo Maresca’s move to Chelsea, the feeling at

City was that they would be close to meeting the loss threshold, and so they should not be too far over the limit. The precedent set by the Everton and Nottingham Forest cases is that a PSR

breach leads to a three-point deduction, with a further point taken off for every £6.5m over the loss threshold. However, City are not dealing with one charge, but three. They're also

alleged to have failed to provide their accounts before December 31, and failed to "provide full, complete and prompt assistance in response to the league's enquiries". WHY

HAVE THEY DRAGGED THIS OUT INSTEAD OF JUST TAKING THE POINTS DEDUCTION THIS SEASON? Had City been charged with a breach of their 23-24 finances in January, when the assessments for the other

clubs took place, the matter would likely be over now, and any points deduction would have been applied to this season, where it ultimately wouldn’t matter as they’ve been relegated anyway.

It could be argued that City dragged the situation out, but it was more the Premier League who have done so. Had City not appealed the 22-23 ruling last summer, they would have started the

season with a points deduction, harming their chances of survival. It was the Premier League that challenged the appeal board’s decision and took the matter to a tribunal, dragging out the

case. In hindsight, yes, City would have been better off not appealing in the first place, and accepting a points deduction at the start of this campaign, allowing them to start afresh next

term. WAS IT POINTLESS SELLING KIERNAN DEWSBURY-HALL? Given City have been charged anyway, it may feel like that. But the £30m earned from Dewsbury-Hall’s sale to Chelsea will still be

significant. It will mean that however far City are over the loss threshold, if the allegation is indeed proven, they are £30m closer to it because of Dewsbury-Hall’s exit. That means that

if punished with a points deduction, it will be far less severe than it would have been had the academy graduate not been sold. WILL THERE BE A TRANSFER EMBARGO AND WHAT IMPACT COULD IT HAVE

ON THE SUMMER WINDOW? A transfer embargo is up in the air, but there are no indications yet that one would be applied. Previously when the EFL placed a transfer embargo on City, it was in

anticipation of them being in breach of PSR. From July 1, City will be in a new financial year, and so it would be pre-emptive to predict they will be in breach for 25-26. Plus, the losses

for the three years being analysed do not yet seem anywhere near as heavy. The 24-25 finances are not yet known, but City lost £19.4m in 23-24. From 25-26, the three-year assessment period

does not include either of the two seasons where City made losses of £90m. However, there will still have to be major adjustments to the squad this summer. In being charged with an alleged

breach for 23-24, despite making more than £70m in transfer profits, shows the work City have to do to readjust financially in the Championship. TV and sponsorship revenue drops

significantly, and while City’s wage bill is not what it was the first time they were relegated, they don’t have the same level of assets to sell. That may mean more players need to go to

reach the required profits mark, with fewer big-hitters there to sell. Mads Hermansen and Ben Nelson look to be the club's most profitable players as things stand. FOR HOW LONG WILL

THEY HAVE PSR PROBLEMS? They are some way from being in the clear. Even after the 23-24 finances are dealt with, City will see the ramifications of their 24-25 finances next season too. The

financial year closes on June 30 and City have to file their accounts by December 31. City are close to the wire, hence their limited transfer activity in January, when they made just one

£3m signing. They still have until the end of June to make sales and potentially boost their situation but if Ruud van Nistelrooy is sacked before then, that’s a compensation payment that

could negatively affect the club, especially as they’ve already paid out to Steve Cooper and his staff. The three-year period for 24-25 will include the £19.4m loss from 23-24 and the £89.7m

loss from 22-23. With all of the add-backs, those numbers aren’t definitive from a PSR perspective, but having a near-£90m loss in the mix does cause concern. As mentioned, from 25-26,

those heavy-loss seasons will no longer be factored in, and City should start to move into the clear. ARE THERE ANY FURTHER QUESTIONS YOU HAVE OVER CITY'S PSR SITUATION? CLICK HERE TO

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