EFL to look at financial rules after Leicester City case
The matter was referred to an independent panel, which has found in City's favour
EFL chiefs are to take on board a ruling that Sky Bet Championship leaders Leicester City did not have to explain how they would deal with a forecast breach of spending limits as they consider potential rule amendments.
The governing body's independent club financial reporting unit asked the Foxes to submit a business plan to demonstrate how it planned to comply with the regulations after figures suggested they would breach profit and sustainability limits for the three-year period ending in the 2023-24 financial year.
Leicester argued the rule did not apply to their case and the matter was referred to an independent panel, which has found in City's favour.
An EFL statement said: "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 Foxes welcomed the decision and confirmed they remain in discussions with the authorities over profit and sustainability calculations.
A statement on the club's official website said: "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."
Enzo Maresca's men are three points clear of Ipswich at the top of the Championship table as they look to make an instant return to the Premier League.
However, reports have suggested City could be docked points next season, with rivals claiming they breached the £105million loss limit for their most recent three-year period in the top flight, and are in line to lose more than the £83m allowed after a season in the second tier.