Coventry City’s fierce local rivals charged over alleged PSR breach amid points deduction fears

Coventry City’s fierce local rivals charged over alleged PSR breach amid points deduction fears

Leicester City, a relegated Premier League team and Coventry City’s bitter rivals, has been accused of violating the Profitability & Sustainability Rules.

When the much anticipated M69 derby resumes in the Championship the following season, the Foxes will join the Sky Blues, but they will do so with the possibility of a points deduction looming large.

The announcement follows the resolution of a dispute involving Leicester’s 2022–2023 accounts.

The East Midlands team was first charged, but they were successful in their appeal, claiming that the Premier League lacked jurisdiction to penalize them because they were an EFL club at the conclusion of the accounting period.

The Premier League brought that to a tribunal, and even though they didn’t agree with the appeal board’s ruling, they couldn’t consider reversing it because of the high bar for doing so.

This most recent accusation, however, concerns their 2023–2024 financial statements, during which Leicester participated in—and won—the Championship.

The team has been referred to an impartial commission, where, should the case be validated, they may be punished.

After the Premier League’s authority was established, Leicester declared in a statement that they will “engage cooperatively in this matter.”

The club was happy to defend the Premier League’s challenge to the Appeal Board’s ruling over the PSR assessment period ending FY23, which was the primary subject of these proceedings, according to their entire statement.

The Premier League’s own regulations set a very high bar for contesting an Appeal Board’s ruling.

The Appeal Board’s ruling in this instance could only be overturned if it could be demonstrated that it was the product of a “perverse interpretation of the law” or that it was a conclusion “which could not reasonably have been reached.”

Even though the tribunal may have disagreed with the Appeal Board’s decision, it rejected the Premier League’s challenge, concluding (in line with the Club’s arguments from the beginning) that the decision “could not sensibly be seen as resulting from a perverse interpretation of the law.”

The Appeal Board’s decision was made by a highly experienced panel that included two former judges from the Court of Appeal.

The Premier League has now submitted this to an independent Commission after the tribunal found that the Premier League had successfully established jurisdiction on one of the two reasons it had raised regarding the evaluation term ending in FY24.

“Now that the Premier League’s jurisdiction has been established for the period ending FY24, the club expects to cooperate in this matter in accordance with its prior obligations.

“However, because these proceedings are confidential, we will not be able to comment further until they are concluded.”

The Premier League also issued a statement that said: “Leiceum City FC has now been referred to an independent Commission for alleged breaches of the following following an Arbitration Tribunal’s judgment regarding jurisdiction:

– the Season 2023–2024 EFL Championship Profit and Sustainability Rules (P&S Rules)
– the club’s duty to submit its annual accounts to the Premier League by December 31, 2024 – the club’s duty to respond to the League’s queries in a timely, comprehensive, and full manner

“The arbitration process examined (a) the Premier League’s authority to look into a claim that the club had violated the EFL’s P&S Rules for Season 2023–2024; and (b) an earlier ruling by the Appeal Board concerning the League’s authority to look into a violation of the Premier League’s Profitability and Sustainability Rules (PSR) for Season 2022–2023.”

Depending on whether Sheffield United returns to the Premier League, Leicester will probably begin the 2025–26 Championship season as one of the favorites for promotion, as they are one of only three teams who could get parachute payments.

However, as the charge has not yet been proven, any possible point reduction could change this standing and allow other challengers to enter.