‘Friendly Leicester’ turn after being bitten by the laws they agreed to

Leicester City were, as of Friday, still to submit financial results for their year ending May 2023, which is no-one’s idea of a fast-track process in the complicated business of regulating the spending of the strapped, the well-off, the super-rich, and all those besides in English football.

That is why the profit and sustainability (PSR) charge by the Premier League was caveated as an “alleged” breach in the statement declaring it. The Premier League is still working on the forecast the club submitted for the final year of the monitoring period up to and including the 2022-23 season. The new fast-track rules passed at the AGM last summer were too late to apply to Leicester and so the wait goes on.

In the meantime, friendly Leicester, the great champions of 2016, a club that has never sought previously to toot its own trumpet – unless one counts the pre-match Post Horn Gallop – has now launched legal action against the Premier League. Two statements in two days, the first warning darkly of “unlawful acts by the football authorities” and the second going full legal against the Premier League and Football League (EFL).

“LCFC has repeatedly demonstrated its commitment to the P&S rules”, Leicester said. Although if the response to being charged is to challenge the application of those rules then it is hard to envisage quite what that commitment constitutes.

English football, and especially its two top divisions, works on the basis that the rules are a consensus that makes the competition work, and that it saves everyone ending up in court. Yet as PSR has bitten in recent years, it turns out that many prefer court.

The judgment on Nottingham Forest revealed that the club tried to make the case PSR was unfair on a promoted club that had no recent benefit of parachute payments and no semblance of a top-flight squad. In the end their whole business plan came down to whether they could sell Brennan Johnson by the end of June; a deadline they missed by two months.

Like Forest, when Everton were charged they tried to claim a range of dubious PSR add-backs and insisted they receive no more serious punishment than a transfer embargo. The Leicester approach appears to be that their top-10 business plan did not cover one bad summer window trading and a shock relegation. Another club unwilling to accept that serious breaches have serious consequences.

Meanwhile, Manchester City face the biggest charge sheet of all and have turned it into the football governance equivalent of the Hundred Years’ War. The Premier League told the clubs in February that one of its number had launched legal action over the associated-party transaction rules. Fingers have been pointed at the usual suspects although nothing confirmed. Either way, the house is creaking.

Like others in their situation, Leicester have adopted the language of the freedom fighter. “We will continue to fight for the right of all clubs to pursue their ambitions,” they said this week, pointing out that those ambitions had been “reasonably and fairly established through sustained sporting achievements”. At which point one is obliged to remind them: you agreed to these rules. The time to oppose them on a point of principle was surely then.

There was an outside chance that if Leicester’s case was completed this season the Premier League could come to an agreement with the EFL that a points deduction would be applied this season, in the Championship. Delays in the case work against that outcome and any possibility that Leicester’s promotion quest might be put at risk.

The fragile consensus upon which the game is built is not simply being chipped away – great lumps are being taken out of it. This is usually the point where the government regulator is mentioned, although one can only assume the state is looking at that task with even less relish. The Football Governance Bill had not even been tabled in Parliament and there were already the first whispers of clubs taking legal action against a regulator.

As for the agreement on the “New Deal” between Premier League and EFL, that is foundering, predictably, because many top-flight clubs do not want to give away hundreds of millions without credible financial controls in place first.

Leicester won the Premier League title in part because spending controls meant the most powerful clubs could not leave their less wealthy competitors so far behind as to make a miracle like 2016 impossible. Of course there was much else that contributed to Leicester’s success, including a lightning strike of players and manager in a perfect moment, combined with failings in the competitors around them.

It was also a time when the Premier League’s short-term cost controls were still in effect, a dull name for quite a radical approach which limited the proportion of uplift in broadcast deals that could be spent on transfer fees and wages. Those eventually fell away during Covid.

A game without financial control systems would kill the Premier League and the Championship. No more competitive matchday when the clubs with unlimited funding can buy anyone, and are never under pressure to trade or strategise.

Leicester built a team capable of winning the Premier League because the wealthiest clubs could not buy every hidden gem, as much as they would like to do so. Even so, under the rise of the multi-club system, it is becoming harder to find a Riyad Mahrez or N’Golo Kanté playing unnoticed in a lower division. Leicester have shown it is not impossible.

The Srivaddhanaprabha family have indeed been generous to Leicester and they are certainly wealthy but like many good owners who have borne major losses they can surely not wish to carry on funding those indefinitely. That is what PSR is designed for – all clubs working within a sensible framework that does not oblige owners to enter an unsustainable arms’ race.

Every ownership has its limit and perhaps that will one day be the case too for Emirati royals or sovereign state funds. All the clubs secretly acknowledge that – it was why they voted for the rules. It is only when the miscalculations of those same clubs put them on the wrong side of the line, that those rules suddenly become an unconscionable obstacle to their own profligacy.