Leicester City can dodge the PSR bullet with no sales today

When is a deadline not really a deadline? It seems like it’s the end of the football accounting year and Premier League clubs are struggling to stay on the right side of the complicated Profit and Sustainability (PSR) rules.

In short, Premier League clubs are allowed to make losses of up to £105m over a three-year period, with the accounting period ending on June 30. That explains why Everton, Aston Villa, Chelsea, Nottingham Forest and Newcastle United have been busy in the last two weeks – and academy players are being moved between clubs, as sales of this kind immediately go into the accounts as pure profit, while purchases are spread over the duration of a contract.

Leicester City are a unique case this time around as they already face a Premier League PSR levy that runs from 2022/23. The case was submitted to an independent commission.

READ MORE: Business to be done by June 30 for City to avoid PSR nightmare

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They are now trying to avoid a second infringement charge in their 2023/24 Championship season – and the EFL has different rules, with clubs allowed to lose up to £39m over three years, or in this case £13m pounds in one. season. Expenditure on items such as academy, infrastructure or women’s football are not included in the calculations.

Leicester have already collected around £10m in compensation from Chelsea for the loss of manager Enzo Maresca and his coaches, and the potential sale of Kiernan Dewsbury-Hall, valued at around £35m, to Chelsea would be expected to carry them well on his right side. the threshold.

There is a race to do business, but Dewsbury-Hall doesn’t necessarily need to be pictured holding a scarf outside Stamford Bridge before midnight tonight for Leicester to comply with EFL requirements.

Everton’s £60m sale of Richarlison to Tottenham in 2022 was not announced until July 1 but still went into the accounts for 2021/22, and last year’s sale of Ellis Simms to Coventry in £60m went into the accounts for 2022/23, although it was not completed until July 7.

But a warning from Forest, who were not allowed to return, dates back to Brennan Johnson’s £47.5m move to Spurs on September 1.

Football financial expert Kieran Maguire told The Athletic: “What you can argue is that it could fall under the definition of a post balance sheet adjustment event. In these circumstances, you could say that you have agreed the sale of player X from one club to another – “We have generally agreed on the fee, all the main issues have been resolved, but there are still some outstanding issues. on personal terms”.

“The clubs generally agreed on a fee but were still waiting for the player to resolve the issue. So you can backdate it to June 30th. A post-balance sheet adjustment event is when you have evidence of something that was generally agreed upon before the balance sheet date. You should have proof of that, but it shouldn’t be that difficult.”

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