Premier League make 'not easy' FFP rules admission in front of Newcastle takeover lawyer

The Premier League's profit and sustainability rules are 'not perfectly drafted' and 'not easy to construe'.

That is the view of Jane Mulcahy, KC, on behalf of the top-flight, after an independent commission dismissed a challenge by Leicester City following an alleged breach of the regulations in 2022/23. Leicester had questioned whether an independent commission had the jurisdiction and authority to hear the case after the Premier League referred the club back in March, but this was rejected. Leicester, who were represented by, among others, Nick De Marco, the KC who previously acted for Newcastle, have appealed the decision.

Although this case, obviously, concerned Leicester, there were some striking wider points in the commission's written reasons. The commission explained that the purpose of the PSR rules are to 'prevent overspending and poor financial management that may lead to a club's insolvency and jeopardise the club, the integrity of the competition and the sport of football and, to a lesser extent, preserve fair competition between the PL clubs'.

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The commission's use of the words 'lesser extent' regarding fair competition felt significant just a few months after football finance expert Kieran Maguire said the top-flight's failure to raise permitted losses in line with inflation had hit upwardly mobile clubs such as Newcastle 'hardest' following the takeover. Perhaps, what was most grabbing was the Premier League's own legal representative's take on rules that were introduced more than a decade ago.

"We do accept it is possible that the PL rules were drafted in a manner that is unsatisfactory, anomalous or exposed a gap," the commission stated in their written reasons. "Ms Mulcahy KC conceded on behalf of the PL at the hearing that 'it is not easy to construe these rules' and that 'they are not perfectly drafted'."

The existing PSR rules, which limit losses to up to £105m over a three-year period, remain in place as Newcastle know only too well after a late scramble to raise funds last weekend, but Premier League clubs are trialling squad cost regulations and top to bottom anchoring in shadow. This will enable the league and clubs to fully evaluate the system, including the operation of UEFA’s equivalent new financial regulations, and to complete consultation with all relevant stakeholders.