Following an Arbitration Tribunal’s decision concerning jurisdiction, Leicester City FC has now been referred to an independent Commission for alleged breaches of:
- the EFL Championship Profit and Sustainability Rules (P&S Rules) for Season 2023/24
- the club’s obligation to provide its Annual Accounts to the Premier League by 31 December 2024
- the club’s obligation to provide full, complete and prompt assistance to the Premier League in response to the League’s inquiries
The Arbitration proceedings looked at (a) the Premier League’s jurisdiction to investigate an alleged breach by the club of the EFL’s P&S Rules for Season 2023/24; and (b) a previous Appeal Board decision regarding the League’s jurisdiction in respect of a breach of the Premier League’s Profitability and Sustainability Rules (PSR) for Season 2022/23.
Click here to read the Tribunal’s decision.
In summary:
Regarding (a), the Tribunal decided that the Premier League has jurisdiction to investigate and refer the club to an independent Commission for an alleged breach of the EFL’s P&S Rules. The alleged breach relates to the assessment period concluding at the end of the 2023/24 season, when the club was a member of the EFL Championship. The Tribunal confirmed that the Premier League has the power to investigate an alleged breach of the P&S Rules because the EFL validly transferred responsibility for its investigation to the Premier League in June 2024, when the club was promoted from the Championship. The Premier League continues to have jurisdiction even though Leicester City will be relegated to the Championship at the end of this season.
Regarding (b), the Premier League challenged, via Arbitration, an Appeal Board decision made in August 2024 (see here). The Appeal Board had ruled that the Premier League did not have jurisdiction to charge the club for an alleged breach of PSR. This was because the club was no longer a member of the League at the time of its accounting year-end date in 2023. The Appeal Board had overturned an earlier independent Commission decision that the Premier League did have jurisdiction (see here). While the Arbitration Tribunal decided that the Appeal Board was wrong, they found the Appeal Board’s decision was not a perverse interpretation of the law (which was the relevant test to overturn the decision), and therefore dismissed the Premier League’s claim.
Notes
EFL P&S Rules (see EFL handbook) and Premier League PSRs (see Premier League Handbook Section E)
- The independent Commission process is confidential, however its decision will be published on the Premier League’s website
- All EFL Championship clubs are assessed for their compliance with the Profit & Sustainability Rules (P&S Rules) each year. The P&S Rules are substantively similar to the League’s Profitability and Sustainability Rules (PSRs), which provides an aligned regime for the top two divisions
- Under the EFL Regulations, when a Championship club is promoted to the Premier League, the EFL can transfer jurisdiction for any ongoing investigation into breaches of the P&S Rules to the Premier League
- Compliance with the P&S Rules is assessed by reference to the club’s P&S Calculation, which is the aggregate of its Adjusted Earnings Before Tax for the relevant assessment period
- A club’s Adjusted Earnings Before Tax figure for each season takes account of its profit or loss after depreciation and interest, but before tax, and then applies a series of "add backs"
- These "add backs" are costs that the EFL, the Premier League, and their clubs recognise to be in the general interest of the club and football, for example, investment in infrastructure, community, women’s football, youth development and depreciation of tangible fixed assets
- A club will be in breach of the P&S Rules if its P&S Calculation over the relevant period results in a loss in excess of £39 million (with that threshold increased by £22 million for each season that a club has been in the Premier League during the relevant period)
- Premier League clubs that recorded a loss across the previous two financial years were required to submit their audited Annual Accounts by the following 31 December. This requirement has been amended slightly with effect from the 2025/26 season so that each club (including each promoted club) must now, as a matter of course, submit by 31 December each year its Annual Accounts for the previous financial year
Premier League investigations and independent Commissions
- The Premier League Board has the power to investigate any suspected or alleged breach of Premier League Rules. Rule E.77 of the 2024/25 Rules (now Rule E.83) provides that where a Promoted Club, at the point at which it becomes a member of the Premier League is the subject of an investigation by the EFL for alleged breaches of any aligned provisions within the EFL Regulations, responsibility for that investigation will pass to the Board
- There are a number of options available to the Board where it suspects or alleges a breach of the Rules. For PSR/P&S 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 Premier 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 W.19, W.20 and W.26, by its independent Chair, The Rt. Hon. Sir Gary Hickinbottom, an experienced former Court of Appeal judge. It is the Chair who selects members of the Judicial Panel to sit on Commissions, which are independent of the Premier League and its clubs
- All proceedings before an independent Commission are confidential and heard in private. This includes the date and location which can’t be announced in advance
- There are a range of sanctions available to the independent Commission which include fines, points deductions, and other sporting sanctions
- Under Premier League Rule W.83.3, at the conclusion of proceedings, an independent Commission’s final decision will be made public via the Premier League’s website
