The Premier League has officially revised its Profit and Sustainability Rules (PSR) following a high-profile legal dispute involving Leicester City, who avoided punishment for financial breaches after being relegated to the EFL Championship.
In March 2024, the Premier League charged Leicester for allegedly breaching PSR limits by incurring excessive losses during the three-year period ending in the 2022-23 season. The league argued that Leicester had exceeded the £105 million loss threshold, which governs club spending and sustainability.
However, in September, an independent commission ruled in Leicester’s favour. The commission determined that the Premier League lacked jurisdiction over the club since Leicester's financial year ended on 30 June 2023, and they were no longer a Premier League side — placing them under the EFL’s governance instead.
The league expressed frustration, stating they were “surprised and disappointed” by the ruling.
Premier League Amends Rulebook
In response, the Premier League has now updated its PSR rules to close the loophole that allowed Leicester to avoid accountability.
The revised Rule E.49 now makes it clear that relegated clubs remain bound by top-flight financial regulations:
“If a club is relegated from the league, that club shall, notwithstanding relegation, remain bound by Rules E.47 to E.86 as if it were still a club, until such a time as it has complied with all of its obligations relating to all its obligations to its last season as a club.”
This change ensures that future relegated clubs cannot use league transition as a shield from financial oversight.
Ongoing Arbitration
In addition to the rule changes, arbitration proceedings are still ongoing between Leicester and the Premier League regarding PSR jurisdiction.
A statement released in January clarified:
“Issues as to the jurisdiction of the Premier League over Leicester City Football Club in relation to PSR compliance are currently the subject of confidential arbitration proceedings.”
“Accordingly, neither the league nor the club will make any further comment at this stage… save to say that no complaint has been brought against Leicester by the league for any breach of the PSRs for the period ending Season 2023-24.”
Leicester City – Reported Financial Results (Last 3 Seasons)
| Financial Year | Reported Losses | Competition |
|---|---|---|
| 2020-21 | £31 million | Premier League |
| 2021-22 | £92.5 million | Premier League |
| 2022-23 | £89.7 million | Premier League |
Over the last three financial years, Leicester City reported total losses of more than £210 million, far exceeding the £105 million threshold permitted by Premier League PSR. This financial picture played a major role in the legal battle between the club and the league — and it is what ultimately triggered the Premier League's decision to update its governance model.
With these rule changes, clubs can no longer use relegation as a means to reset their PSR obligations — a major shift in English football finance.
Do you think the Premier League was right to close the PSR loophole?
Should clubs like Leicester still face retrospective punishment?
1 Comment (last comment by Adem)
First read message
By Adem 16 Apr 2025 16:01
Why would you need to punish clubs when they find a loophole in the rules? It's the fault of the rules right?
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