The lawyer who headed up Leicester City’s legal defence in their profit and sustainability rules (PSR) victory over the Premier League is set to square up against the competition and its members once more.
Renowned sports silk Nick De Marco represented the Foxes in their appeal against Premier League charges related to a PSR breach for 2022/23, the season they were relegated from English football’s top tier, with an appeal board finding in favour of City after De Marco and the legal team working on the case found flaws in the Premier League’s own legislation.
The Premier League calculated that the club were £24.4m over the PSR threshold relating to the 2022/23 financial year. The Foxes had moved their financial year end from May 31 (as it was in 2021/22) to June 30 in 2023, and the club had moved to apply the letter of the law in terms of the Premier League’s own legislation, successfully arguing that the point of the breach occurring was at the end of their accounting period, which came a fortnight after they had lost their Premier League status in 2023.
What that means is that the club had transferred their Premier League shares over to Luton Town on June 13, and were then viewed as a Championship side. As per the Premier League’s own legislation, the club could not be held accountable for the breaches that occurred when they were not a member of the Premier League.
When the club submitted its accounts for 2022/23, they were not a Premier League club and the argument was made that they could not be made subject to the Premier League’s rules. What this means moving forward is that there will almost-certainly be a revision of the legislation to close this particular loophole that the Foxes legal team spotted.
A Premier League statement upon the decision of the appeal board read: “The Premier League is very disappointed with the appeal board’s decision, and the limited reasons provided for it. The league remains of the view that the original commission took the right approach in interpreting the rules in a practical and workable way that gives effect to their intended purpose.”
De Marco has now, reportedly, been instructed to represent the Professional Footballers Association (PFA) should they press ahead with plans to oppose the introduction of any kind of salary cap in the Premier League, as is on the horizon after member clubs voted 16 to 20 to introduce a new system called ‘anchoring’ at a Premier League AGM earlier this year.
The ‘anchoring’ plan would limit how much top teams could spend, capping them at a certain proportion of the amount the league’s bottom club receives in broadcast revenue, money, potentially five times that sum, on transfers, wages and agents.
When it was initially put to vote earlier this year, Manchester United, Manchester City, and Aston Villa voted against the proposals – which would see a soft salary cap introduced – with Chelsea abstaining from the vote. Leicester’s stance is not known given the club were members of the EFL at the time of the vote on the matter.
The PFA’s CEO Maheta Molango delivered a speech to the Trade Union Congress in Brighton on Monday, setting out the organisations stance on any attempts to introduce salary caps in the Premier League without appropriate consultation with PFA members.
He said: “We will be told these kind of salary controls work in US sport, so why shouldn’t they work here? But we won’t hear how, in the US, they are just one element of wide-ranging Collective Bargaining Agreements negotiated between leagues and player unions.
“These agreements recognise the value of the players and formalise and protect a whole raft of rights and conditions. They are strictly enforced and have been the subject of major labour disputes.
“If leagues and club owners want those types of agreements in English football, then by all means let’s have that conversation. What they cannot do is just cherry pick the parts they like because it suits their financial purposes.
“And this won’t just be an issue for the small group of players at the very top. It will eventually impact the majority who have short careers and who do not earn elite wages.
“The introduction of a salary cap would set a precedent that a group of business owners can come together to unilaterally and artificially control the market to limit what they have to pay to their employees. Any trade union, in any industry, would be alarmed by those kinds of plans.”
The ‘anchoring’ proposal has been brought in as part of measures to replace PSR, with the Premier League’s financial controls having come under major scrutiny over the last 18 months. The Premier League draws in larger broadcast revenue that any other football league in the world, with the next cycle of domestic rights worth £6.7bn over four years, while international rights, currently just over £5bn a year, are expected to climb for the next cycle.
The growth in revenues across the competition has resulted in major increase in terms if payroll at Premier League clubs. That has seen spending, and losses, increase.
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