PREM club accountants face PSR D-Day tomorrow – with the threat of a points deduction hanging over them.
Under League rules, all clubs that have posted aggregate losses over the previous two seasons must hand in their 2023-24 accounts by close of business.
Prem lawyers will then go through the numbers to decide if charges for breaches of Profitability and Sustainability Rules are due – with a decision made and published by January 13.
And the biggest scrutiny is likely to be on the figures supplied by Leicester after the Foxes – already in the drop zone – won a huge legal victory to avoid being sanctioned before the season started.
Clubs are limited to “allowable losses” – once spending on infrastructure, the youth and women’s teams and community projects is taken off – of a maximum £105m over three seasons.
That sum is reduced by £22m for each season a club has spent in the Championship.
But it ensures an anxious time for fans of a number of top flight clubs until Prem chiefs confirm charges in the middle of next month – with the rules ensuring that any punishments MUST be applied this term.
Last season saw Everton and Nottingham Forest both hit with points deductions for breaches in the 2022-23 season.
Everton, who had already been deducted six points for a £19.5m breach over the three years to June 2022, had two more points knocked off for posting losses of £16.5m – although Prem lawyers argued that the Goodison club was responsible for a further £6.5m sum in “interest payments”.
Forest, who were only in their season in the top flight, were docked four points for busting their £61m loss limit by £34m.
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The City Ground club, the success story of this campaign and who will end the year with a six-point buffer in the race for a Champions League spot, admitted in March that they were on course for PSR losses of between £12m and £17m, despite finally being able to include the £47m sale of Brennan Johnson to Spurs in their calculations.
But the previous losses meant they entered the season already £9m OVER their 2023-24 loss limit of £83m.
Forest are understood to be confident their end of season fire-sale, including the £20m departure of Greek keeper Odysseas Vlachodimos to Newcastle, will enable them to get in under the threshold for a charge, but it is likely to be touch and go.
Likewise at Everton, who sold Ben Godfrey to Atalanta for £10m and Lewis Dobbin to Aston Villa for £9m in the final days before the official June 30 end of last term.
The Toffees, now under new ownership, were looking at a loss of around £90m for the previous two campaigns and were once again sailing close to the PSR wind.
Those sales were part of an end of season transfer merry-go-round which also saw Everton pay £9m for Villa’s Tim Iroegbunam, Chelsea sell Ian Maatsen to Unai Emery’s men for £37.5m and buy youngster Omari Kellyman for £19m.
Those deals led to Prem chiefs warning clubs that they must not use loopholes in the rulebook to avoid PSR penalties and that they are duty bound to act “with utmost good faith” towards the competition and rivals.
There were arguments that charging each other potentially inflated fees – with incoming transfers “amortised” over contract lengths while sales can be lodged at full book value – to get round PSR provisions was a breach of that undertaking.
Chelsea, who contentiously received the green light to sell two hotels on the Stamford Bridge site for £76m to sister company BlueCo 22 Properties, also owned by Todd Boehly and Clearlake Capital, were perilously close to the maximum loss limit last season.
A season without any European football knocked a £50m black hole in their anticipated income but the hotel sale is likely to see them clear the PSR hurdle for last term.
However the biggest cloud is hanging over Leicester, who successfully argued they were not under Prem jurisdiction because they had been relegated to the Championship.
Promotion brings them back under the Prem auspices and the Foxes posted cumulative losses of £124m for the final three seasons before they were demoted, with last term likely to have seen their numbers take another hit.
