Leicester City are back in the business of fairy tales. What seemed an inevitable punishment is now an impossibility, a big win for the little billionaire against a corporation it represents 1/21st of, entirely to boost its chance of remaining part of that corporation. The beautiful game is only getting more beautiful.
Like Everton and Nottingham Forest, Leicester breached the Premier League’s profitability and sustainability rules (PSR) in the three-year period up to 2022-23.
Unlike the aforementioned duo, Leicester were relegated at the end of that season, then promoted again the following year. This meant they avoided any points deductions in 2023-24, but the Premier League pursued charges upon their return.
Leicester didn’t fancy starting this season with a predetermined disadvantage, so they hatched a plan. Enlisting Nick De Marco KC, dubbed the “Lionel Messi of sports law”, they argued being punished for the 2022-23 season wasn’t fair, because the rules state a PSR breach only occurs on 30 June of any year.
Leicester handed over their sole Premier League share on 13 June 2023, so were not under top-flight jurisdiction at the end of the month. Having lost their initial case, they won their appeal entirely based on the overly specific wording of rule E49.
Had they not been relegated, they would have been handed a points deduction similar to Nottingham Forest’s – Leicester breached the £105m, three-year limit by £19.5m, while Forest exceeded their allowed £61m by £24.5m.
Why was Forest’s PSR limit only £61m, I hear you ask? Because they were only promoted from the Championship ahead of the 2022-23 season. Leicester’s instant promotion even meant they avoided being punished by the EFL too.
So while Leicester avoided punishment despite spending 98.4 per cent of the past three years in the Premier League, Forest lost four points after just one top-flight campaign. Welcome to the age of loopholes. Doesn’t it make you feel all warm and fuzzy?
The Premier Legue has long been warned its regulations are not as watertight as Uefa or the EFL’s equivalent, but unsurprisingly the competition governed by turkeys, for turkeys, has refused to tighten its pro-Christmas rules.
In fact, almost all PSR discussion since Everton and Forest’s deductions has been dominated loopholes. Take Chelsea selling their Stamford Bridge hotels and women’s team to different branches within their holding company and registering the profits as organic income.
How about the not-swap deals clubs agreed before the PSR deadline, including Newcastle’s signing of rapidly-outgoing fourth-choice keeper Odysseas Vlachodimos for £20m? What about academy products and “pure profit”? These are not well-crafted rules and Premier League clubs quite like it that way.
For all the talk of fairness, clubs have had a decade to discover and abuse these loopholes. If anything, it reflects badly on the Everton and Forest hierarchies that they couldn’t game an eminently gameable system. Honesty and integrity exited this conversation long ago.
But Leicester’s escape has as much to do with the lack of cross-league regulatory consistency as it does with PSR’s evident flaws. The Premier League, Championship and Leagues One and Two have three unique sets of financial rules between them and do not often collaborate to enforce them. This is a system broken at every level.
Take Leagues One and Two and their Salary Cost Management Protocol (SCMP). The limit for this is either clubs spending 60 per cent of their turnover on wages or 100 per cent of their Football Fortune Income. Great name, less great principle.
Alongside cup earnings and parachute payments, Football Fortune Income can come from money the owners invest into a club in the form of cash or equity injections, meaning lower-league clubs can spend as much as their owners are willing to lose, ad infinitum. Buying your way to the Championship is not so much a feasible as a reasonable strategy, one Birmingham and Wrexham are actively pursuing.
This is how Birmingham splurged £15m plus £5m in add-ons for 21-year-old Jay Stansfield on deadline day, more than tripling the League One transfer record they had already broken twice this summer. Outside the Premier League, only Burnley spent more on player transfers this summer and they had recouped over £50m in sales.
There are now two possible paths for Birmingham. Down one, they are promoted to the Championship this season, spend extortionately again and reach the Premier League in back-to-back years.
This would exonerate them from any EFL cost controls and provide top-flight scope to continue spending. If they make it as far as the Championship and cannot escape, they will have to be very careful to ensure they meet the £13m-per-season loss limit, probably forcing sales.
Down the other is the failure to escape from League One this season, not unimaginable given the strength of Stockport and Wrexham.
This would mean another season of massive losses attempting to reach the second tier, which may well then be in breach of the Championship’s regulations if they secure promotion at the second time of asking. Everton and Derby serve as recent examples of how wrong the kamikaze spending approach can go.
The Championship has the tightest regulations but its difficult relationship with the Premier League, centring on the cold war over TV money distribution, restricts cooperation which could solve many of these issues. As it stands, being relegated or promoted is the safest way to avoid any punishments.
Top-flight clubs will vote this season to introduce a successor to PSR, partly because all the loopholes have now been exploited and partly because they would like a slightly laxer framework. £105m has been getting a bit tight of late.
The game then starts all over again, with an entirely new set of fun and inventive ways to humiliate the Premier League and avoid any regulation or responsibility. They could even draft in the work experience kid who wrote the last set of rules to give it another go.
from Football - inews.co.uk https://ift.tt/DjfQmpk
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