They were a shining example for clubs outside the traditional elite, shocking everyone and everything by winning the Premier League in 2015/16 and then reaching the quarter-finals of the Champions League the following season.
But this success has come at a price, as chief executive Susan Whelan admitted: “Over the last few years the club’s financial performance has reflected the necessary levels of investment in the playing squad to enable Leicester City to compete effectively in the Premier League.”
To be fair, this ambitious strategy almost worked, as Leicester then finished fifth in the Premier League for two consecutive years, meaning they once again missed out on qualification for the lucrative Champions League.
However, the 2022/23 season was very different, with “poor results from the men’s team on the pitch” ultimately leading to relegation to the Championship, ending a nine-year spell in the top flight.
The poor results had a direct impact on Leicester’s results in 2022/23, as Whelan noted: “The club’s budget was based on reasonable expectations based on past sporting performance.”
Leicester’s investment in their team resulted in significant financial losses, amounting to £283 million over the four years from 2019/20 to 2022/23.
The club have effectively not made a profit since 2017/18, while the value of qualifying for the Champions League highlighted a substantial £92m profit last season. Of course, few football clubs make money, but Leicester had the fourth biggest defeat in the Premier League in those four years, only better than Everton, Chelsea and Tottenham.
Leicester have attempted to make up for heavy losses from their player trading business, making an impressive £191m profit on player sales over the past four years, largely thanks to the moves of Harry Maguire to Manchester United, Wesley Fofana and Ben Chilwell to Chelsea and James Maddison for Spurs.
The club’s strategic decision to retain what it called a “prime asset” in the 2021/22 season arguably hurt the club in terms of PSR, earning just £9m that season.
Leicester somehow managed to avoid a 2022/23 PSR rating penalty, but what about 2023/24? Leicester’s PSR challenge has become more difficult since relegation as PSR’s annual loss in the Championship is just £13m compared to £35m in the Premier League, so their biggest loss over the three-year tracking period has been reduced from £105m to £83m . .
Swiss Ramble estimates that PSR’s loss over the 3-year monitoring period was £82m, which would give Leicester a maximum loss of £83m.
While Leicester’s legal team can be applauded for their ability to find loopholes, the appeal panel’s decision made a mockery of Premier League rules as it is clear that the club breached the maximum allowable loss in 2023/24 (and by a long way). ).