Explained: How EFL plan FINANCIAL RULE CHANGE to close Leicester loophole

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Rob Dawson explains how the EFL is planning to change its financial rules to close a loophole that it feels Leicester City have exploited in order to avoid being subjected to a strictly-controlled business plan.

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Significant news coming out of the efl it concerns them and the championship leaders Leicester our senior reporter Rob dorsed is here Rob tell us more Mike this is slightly complicated but I’m going to try and explain it to you in the simplest terms that I’ve had to go

Through this is breaking news it’s just come virus statement from the efl where they say they are looking to potentially change their financial rules going forward from this point because they believe that Leicester city have exploited a loophole between the Premier League and the efl who both have

Slightly different rules when it comes to the financial restraints that clubs have to abide by okay now every Championship Club has to submit its accounts to the efl on the 1st of March so five days ago in our case and that projects what they’re going to do until

The end of their financial year the end of the financial year for clubs typically in leicester’s case I think it is the end of June so Lester we need to point out here have not breached the rules they have not breached the efl’s financial rules but the accounts they

Filed on March the 1st suggested that they were in line to breach the rules by the end of the season okay now of course Leicester could quite easily argue well we could sell a player we could reduce our costs we could increase our revenues hey we’re top of the championship we’re

Presumably going to get some prize money before the end of June which might bring us back in line so that we weren’t going to breach the efl rules but when the efl hear that a club is in line to breach their financial rules they make them submit to certain criteria one of which

Is a business plan and they say look we need to know that you are serious about getting back in line with your financial commitments and so we want to agree a business plan with you that you have to stick to to make sure that you’re in

Line by the end of the season okay Leicester refused to do that the efl have told us today in this statement and they instead said because we were in the Premier League the efl rules don’t apply to us in this instance the efl said yeah well we still think they do

Leester put that case to an independent commission to hear and the independent commission has now decided in the club’s favor so they’ve said y these rules do not apply to Leicester because they were in the Premier League at the time the efl rules do not apply to them so in

Effect Lester have exploited a loophole here and managed to not be submitted to an efl business plan the efl don’t like it and the efl are going to talk to the Premier League about trying to bring their financial rules more in line going forward from here but important to

Stress and this is really important Lester were in line they were projecting that they might breach the pre the efl’s financial Rules by the end of this season they are not in breach of those rules they could have sold a player they could have changed their financial

Situation they could have come back in line what they didn’t want to do was be ruled by the efl here and told how they needed to do their business and the independent commission has found in their favor and said yep you didn’t need to the rules did not apply to you but

Significant not just for Leicester city not just for the AFL but for Championship clubs Premier League clubs going forward forward that the AFL now want to change their own Financial rules so that this can’t happen again in the future uh it would seem to suggest that leester need to go up

Though potentially I mean Leicester have always sold one of their biggest players or tend to sell one of their biggest players each summer window make a good profit on it and reinvest that money elsewhere they may be planning to do the same again for all we know so they could

Be compliant but it’s pretty clear they’re fail selling quite close to the financial rules staying quite close to the wind on this in this situation but they’re hoping they get back up to the Premier League where their financial situation changes overnight as well that’s why it’s so complicated and it is

Complicated Mike because in the Premier League we know that over three seasons under the current profit and sustainability rules clubs are allowed to lose 105 million pounds over a three-year period well in leicester’s case there was only two years in the Premier League so that’s 70 million P

Yeah two lots of 35 and in the efl you’re allowed to lose 13 million each season so Leicester could only lose 83 million p over the last three years that’s what you need to know that’s the magic figure 83 million p is what Lester were allowed to to lose and the accounts

That they submitted to the F suggested they were going to go beyond 83 million in losses that’s why the efl said right submit to our business plan there Lester went no and now it’s gone to an independent tribunal who found in Lester’s favor so as say important to

State Lester haven’t broken any rules here but they refuse to submit to the efl’s business plan the efl don’t like that and they’re going to change their rules as best they can going forward