Stefan Borson: I’ve read 100-page document, this is how Leicester avoided 12-point deduction
Leicester City have now learned the ruling in their lengthy profit and sustainability (PSR) saga.
Leicester were charged last May with an alleged breach of the EFL’s financial rules in their promotion-winning campaign back to the Premier League in 2023-24.
Following a hearing in November, it was announced on 5 February Leicester have been deducted six points.
The penalty has been applied immediately, leaving the Foxes sitting 21st in the Championship table and only outside of the relegation zone on goal difference.
In a statement, Leicester said the points deduction is “disproportionate” and they are now considering their available options.
How Everton’s points deduction impacted Leicester’s case
Former Man City financial adviser Stefan Borson exclusively told Football Insider the punishment was decreased from 12 points to six after several factors were considered.
The Premier League’s PSR rules allow clubs to lose £105million over a rolling three-year period, but Leicester’s figure was reduced by £22m for spending the 2023-24 season in the Championship.
The commission ruled the Foxes had spent £20.8m over their £83m limit between 2021-22 and 2023-24.
Speaking exclusively to Football Insider, Borson said: “I think six points was broadly the right number. Look, we’re now getting to a position where, because we have the historic cases with Nottingham Forest and Everton, particularly the latest Everton one, which was able to kind of gather all of the views together about what the right way of approaching sanction should be we’ve now got a good indication of where that’s going to land before the event.
“The complication here was that this was this weird situation where the Premier League were dealing with an EFL breach of a club that’s now in the EFL, so they took over the case when they got promoted. The case has been running as a Premier League case but all to do with the EFL.
“That was the complication and, ultimately, there was a big debate in the hearing about what’s the best way to come up with the sanction when you’ve got this slightly unusual situation.
“They effectively in the end found a way to say, ‘Well, actually if you look at it carefully, they’re all the same, i.e. you either go with the EFL, which starts at 12 points and you sort of roll it back to a fairer level shall we say and you compare it with the Premier League rules that start at three points and move up’.”
Why Leicester landed six-point deduction
Borson revealed there is a rational in the commission’s 100-page judgement that details why the punishment was reduced from 12 points to six.
“Effectively what they did was in the EFL, they came down from 12 to six,” said Borson.
“They have found a way of doing that. I won’t bore you with the detail, but they have a rationale in the 100-page decision if you want to read it.
“Then they said, ‘Well, we know that that’s about the right level because if we do the same mechanism with the second Everton case methodology, we come to the same number’. It just so happens to be seven points in both scenarios, so they were happy that the starting point should be seven points.
“Then they said, ‘Well, because Leicester in FY24 made a small profit for PSR purposes compared to a big loss in FY23, what we’ll do is we’ll give them a point back because they’re going in the right direction. So, as mitigation, we’ll give them a point back, so you get to six points’.”
Leicester are not expected to face any further PSR issues for 2024-25 after reducing their losses over the past couple of years.
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