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Leicester take swipe at EFL in statement released after ‘exploiting a loophole’

Leicester City take a swipe at the EFL in a statement released on Wednesday evening after ‘exploiting a loophole’ amid FFP fears.

The EFL is planning to make changes in its financial regulations following allegations that Leicester took advantage of them.

Leicester is permitted to incur financial losses of up to £83 million over the past three years, as per the current regulations.

This allowance includes two previous seasons in the Premier League, where losses of £35 million per year are acceptable, followed by a maximum of £13 million in the Championship.

Based on the financial statements submitted on the 1st of March, it was anticipated that the Foxes would exceed this £83 million threshold.

Leicester didn’t violate any regulations and still had the opportunity to avoid doing so by the end of June – prior to the submission of their financial reports.

The EFL requested Leicester to present a detailed business plan, which they would be required to adhere to strictly in order to remain compliant with the regulations.

The club contested this requirement, arguing that for the majority of the period they were in the Premier League and therefore not subject to the EFL regulations.

The independent Club Financial Reporting Panel supported Leicester’s position and ruled in their favor.

Sky reporter Rob Dorset explained: “This is slightly complicated, but I’m going to try and explain it to you in the simplest terms that I’ve had to go through. It’s just come via a statement from the EFL where they say they are looking to potentially change their financial rules going forward from this point because they believe that Leicester City have exploited a loophole between the Premier League and the EFL, who both have slightly different rules when it comes to the financial restraints that clubs have to abide by.

“Now every Championship club has to submit its accounts to the EFL on the 1st of March. So five days ago in our case, and that projects what they’re going to do until the end of their financial year, the end of the financial year for clubs.

“Typically in Leicester’s case, I think it is the end of June. So Leicester, we need to point out here, have not breached the rules. They have not breached the EFL’s financial rules. But the accounts they filed on March the 1st suggested that they were in line to breach the rules by the end of the season.

“Now, of course, Leicester could quite easily argue, well, we could sell a player, we could reduce our costs, we could increase our revenues. Hey, we’re top of the Championship. We’re presumably going to get some prize money before the end of June, which might bring us back in line so that we weren’t going to breach the EFL rules.

“But when the EFL hear that a club is in line to breach their financial rules, they make them submit to certain criteria, one of which is a business plan. And they say, look, we need to know that you are serious about getting back in line with your financial commitments. And so we want to agree a business plan with you that you have to stick to to make sure that you’re in line by the end of the season.

“Leicester refused to do that. The EFL have told us today in this statement. And they instead said, because we were in the Premier League, the EFL rules don’t apply to us in this instance.

“The EFL said, yeah, well, we still think they do.

“Leicester put that case to an independent commission to hear and the independent commission has now decided in the club’s favour. So they’ve said, yep, these rules do not apply to Leicester because they were in the Premier League at the time. The EFL rules do not apply to them.

“So in effect, Leicester have exploited a loophole here and managed to not be submitted to an EFL business plan. The FL don’t like it and the EFL are going to talk to the Premier League about trying to bring their financial rules more in line going forward from here. But important to stress, and this is really important, Leicester were in line. They were projecting that they might breach the EFL’s financial rules by the end of this season. They are not in breach of those rules.”

LEICESTER STATEMENT:

Today (Wednesday 6 March) the EFL has published a decision of the Club Financial Reporting Panel (CFRP), which confirms that the EFL’s Club Financial Reporting Unit (CFRU) acted outside of its powers in its dealings with Leicester City in November 2023.

Although the Club is pleased that the CFRP’s decision found in its favour, it is concerned that it was necessary for the CFRP to intervene in this way to prevent the CFRU from acting outside of established EFL rules.

Leicester City confirms it is in discussions with the football authorities regarding its profitability and sustainability calculations. Notwithstanding the CFRP’s decision, the Club remains committed to seeking an appropriate overall outcome in this matter.

EFL STATEMENT:

Earlier this season, based on financial information submitted by the Club, the EFL’s independent Club Financial Reporting Unit (CFRU) concluded that the Club was forecasting to breach the Profitability and Sustainability (P&S) loss limits for the three-year period ending with financial year 2023/24.   

The CFRU determined that it was appropriate under P&S Rule 2.9 to require Leicester City Football Club to submit a business plan to demonstrate how it planned to comply with the EFL’s P&S spending limits.  

The Club argued that the relevant P&S Rule did not apply to it, meaning the CFRU had no right to require a business plan in respect of Season 2023/24.   

That matter was referred by the Club to the independent Club Financial Reporting Panel (CFRP) which concluded that under the Rules as currently written, Rule 2.9 did not apply to the Club and so it was under no obligation to submit and agree to a business plan.  

The CFRP decision has been published today and will help in informing the EFL on the potential Rule amendments that will be proposed for consideration by Championship Clubs in the future to ensure all Clubs are treated equally under the Rules.  

Leicester City is responsible for meeting its obligations in respect of the P&S Rules which will be assessed along with the submissions of all other Clubs in accordance with the League’s established processes. 

The League will be making no further comment on this matter at this time.  

The CFRP decision can be found here

This is what fans are saying as Leicester take swipe at the EFL in a statement released after ‘exploiting a loophole’…

@HHunter2306: So we are fine and the Governing body acted outside of its parameters so “digging in places it shouldn’t” when we were doing what we were supposed to.

@connor_t94: Reading, Bolton, Derby, Bury, Birmingham, Coventry, Luton Town and many many more suffered because the EFL wanted to stamp there authority on dealing with stuff like this but it’s fine because Leicester are going up. Pricks man. Not fit for purpose

@ianbrannan: Pretty damn sure if that was Leeds United we’d be talking points deductions and fines..

@BcfcMichael: So basically you have no problems deducting points off teams fighting for relegation but when they fighting for promotion you bottle it 👍🏻

@AVFC_JJC: Essentially, The EFL thought Leicester broke FFP, Leicester claimed they didn’t break FFP, so the EFL said “ok”.

@Marrrrkkkkk: So basically, Leicester understood the rules set by the EFL better than the EFL? How embarrassing. Just like the embarrassing officials week in week out.

@GlenH84:
EFL: you didn’t comply – do this
Leicester: shut up, we aren’t Leeds
EFL: true, as you were. Sorry

@lee_perrett: Don’t worry, they’re probably just take the points off us Reading fans. EFL are scared to touch any big clubs

@Luke_Thom: If this was Reading/Derby/Wigan etc points would be deducted without hesitation. If it’s Leeds, points deduction straight away, and a new rule introduced so they can take more points and a record fine #efl #lufc #lcfc

@billywigwam13: Basically, didn’t happen in EFL but in the Premier League so ok but don’t do it again and we will amend our rules a bit. Maybe if they had a bloke watch a training session from outside a training ground then Leicester City would have been in big trouble #lufc #MOT

@chunkyboyjames: The problem is that the rules don’t cover the different rules in the EPL v EFL. So whilst because Leicester have been in the Premier League for the last 2 years, they’re subject to two entirely different sets of rules. Until you can define which rules apply, they’re in the right.

@AndyRFCCharman: Yet you made up a new rule just to punish Reading further. The club found a way not to breach your rules yet you decided we’d gained an ‘indirect competitive advantage’ so punished us anyway! In what sense or form is that fair & just? #readingfc #EFLNotFitForPurpose #IFRNow

@PRF_DerbyCounty: Wait, so the EFL have concocted some flimsy rules with loopholes aplenty and then can’t understand their own rules nor enforce them properly? That doesn’t sound like them, does it?

@PaulFrankfurt71: So, in short, Leicester once got promoted after going into admin as the rules didn’t give deductions then. Rules changed. Leicester use another loophole now to not apply P&S properly. Get promoted. Loophole closed later. Meanwhile, #readingfc get screwed.

@Russy1871: So you punishing reading but there getting away with it. How does this is work? Rick parry = fraud #readingfc

@connorhcafc: Complete and utter farce. Feel sorry for any Reading, Derby, Bury, Bolton fans etc reading this. Or just any club who the EFL have previously shafted with points deductions for similar things #dcfc #bwfc #readingfc

@andyorton7: Not so much exploiting the rules just sticking to the rules that are put in place by the leagues. if you made the rules more simple everyone would know the rules clearly. The first thing to implement is wage cuts in EVERY players contract in every league for relegation

@AJKendrick: Hahaha you fucking idiots, @EFL. Yeah, take offence again. Make an example of little old Reading and fail to comply to your own standards. You’re the problem. #FUCKTHEEFL #BETRAYEDBYTHEEFL

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