Leicester City’s financial problems have pointed toward trouble in the past 24 months and relegation was the big wake-up call for many
“If players aren’t improving and developing, then you need that healthy shake-up. We need to reinvigorate the squad.” Those were the words of then-Leicester City manager Brendan Rodgers in February 2022.
That ‘shake-up’ never happened. In the summer of 2022, concerns were present within the fanbase at the financial situation of the club amid a lack of business after Rodgers words.
The writing was on the wall two years ago. Fast forward to April 2024 and the club’s financial situation is dire.
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On Tuesday, the Foxes announced a loss of £89.7m for the 2022/23 season, meaning they have lost a combined £182m in the past two seasons. After going four straight years making a profit, the club have now made a loss over five consecutive years.
They are expected to be found in breach of Profit and Sustainability rules (PSR) and have already been placed under a registration embargo by the EFL. Top-flight clubs are limited to losses of £105m over a three-year period meaning the club will have to raise money through player sales before June 30 to avoid a further breach for the 2023/24 season.
The club have attributed the loss to four key factors: relegation from the Premier League; the lack of prize money from no European football; sacking Brendan Rodgers and his backroom staff and the one-month addition to the accounting period.
But when you take a tough trip down memory lane back to Rodgers’ comments toward the end of the 2021/22 season, it’s little surprise that the club are now facing a severe punishment for breaching Financial Fair Play (FFP). Rodgers didn’t get the rebuild he wanted before last season and never seemed to recover.
Enzo Maresca didn’t get the January reinforcements he publicly called for this season. The Premier League’s decision to charge the club for allegedly breaching PSR last month pointed toward a difficult reading from the latest financial accounts, but that doesn’t make the blow any softer.
Compared to Premier League clubs, Leicester’s loss is the most concerning. Aston Villa (£120m), Chelsea (£90m) Everton (£89m), Newcastle (£73m), Nottingham Forest (£73m) and Wolves (£67m) all underline the poor management at the King Power Stadium.
What makes the situation, worse is the jaw-dropping contrast at one of Leicester’s Premier League rivals. Hours before the £89.7m loss was announced, Brighton & Hove Albion announced an English record profit of £122.8m in the same financial year that Leicester suffered.
From the year before, profit after tax increased at the AMEX Stadium by almost £100m from £24.1m. The Seagulls finished sixth in the top-flight last term, reached the FA Cup semi-finals and received some huge transfer fees – factors all contributing to the impressive financial accounts.
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