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Leicester City avoided a profit and sustainability (PSR) breach for 2023-24 after they were likely allowed to make a £105million loss despite their relegation to the Championship.
That is the view of finance expert Stefan Borson, who exclusively told Football Insider everybody had been working on the basis their limit would fall to £83million after spending last season in the second tier.
The Premier League didn’t issue any charges earlier this week for a PSR breach in the 2023-24 season despite fears Leicester would fall foul of the regulations.
Under the PSR rules, top-flight sides are permitted to make £105million – or £35million a season – of losses over a three-year period, but that drops to £13million a year in the Championship.
Although Leicester previously successfully appealed against charges handed out to them for a 2022-23 breach, that case remains ongoing after the Premier League has challenged that decision.
Leicester were likely handed additional leeway after PSR update
Borson insisted the £22million of additional leeway Leicester appear to have been provided is likely to be the reason why they avoided a PSR breach for last season.
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He told Football Insider: “The expectation generally around was that they were going to be very close.
“The interesting thing is there is a potential small rule in the Premier League rules that appears to mean that a club on their first year back from the Championship still has in Leicester’s case the full £105million allowance.
“Everybody had been working on the basis and this is what it actually said in the EFL judgement that they were going to breach at £83million.
“Nobody is able to clarify with certainty and that includes when you put it to the Premier League that their cap for 2023-24 was £83million or the full £105million.
“My gut feel is that it was £105million and, therefore, that explains a lot about why they were okay.
“I still think it will have been close, but that additional £22million of leeway might just have been enough, especially when you add on the Maresca compensation and they obviously sold Dewsbury-Hall before the accounting deadline.”
In other news, Southampton braced for bids for Leicester target.
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