Leicester City may be affected by their unexpected relegation from the Premier League “for some time”. Chief executive Susan Whelan issued the grim warning in a press statement detailing the club’s newest set of accounts, which showed a pre-tax deficit of £89.7 million ($113 million), following a record £92.5 million loss the previous season.
Leicester City has declared a loss of £89.7 million for the 2022-23 season, bringing its cumulative losses over the last three Premier League seasons to more than £215 million. The Foxes were accused last month with allegedly violating profit and sustainability regulations (PSR) over the numbers they have recently revealed. Top-flight rules allow clubs to lose £105 million over a three-year period. It comes despite the Foxes, who were relegated at the end of last season, earning a £74.8 million profit from player sales.
According to the records, the club’s relegation was a “disappointing and unanticipated decline” after finishing eighth, fifth, and fifth in the Premier League the previous three seasons. The Championship club’s chief executive Susan Whelan stated: “After a sustained period of growth and success for the club over the last decade, the 2022-23 season was a significant setback, the consequences of which will be felt for some time.” “We must now focus on rebuilding and returning to the Premier League. “Having finished fifth, sixth, and eighth in the Premier League in the previous three seasons, our aims and budgets for 2022-23 were quite acceptable.
“However, for a club such as ours, whose sustained sporting achievements have justified the levels of investment required to compete with the most established clubs and pursue our ambition, a season of such significant under-performance on the pitch presents financial challenges, particularly from the perspective of the game’s current Profitability and Sustainability rules.”
The Foxes raised almost £70 million by selling French centre-back Wesley Fofana to Chelsea in August 2022, and England midfielder James Maddison completed a £40 million transfer to Tottenham last summer. However, Brendan Rodgers and his coaching staff, including assistant manager Chris Davies, were fired in April 2023, and the club finished lower than expected in the league. The reports do not specify how much it cost to fire Rodgers, but sales costs rose by £26 million to £301.8 million, which the club attributed in part to a change of manager.
Rodgers expressed his dissatisfaction with the Foxes’ inability to invest in the 2022 summer transfer window. At the outset of the season, he predicted Leicester would struggle and required 40 points to survive; they finished 18th and were relegated with 34 points. Turnover fell to £177.3 million, down from £214.6 million the previous year, but chairman Aiyawatt Srivaddhanaprabha paid off the club’s outstanding £194 million debt to parent company King Power International in February. The Foxes owed the sum in loans to KPI, which is owned by the Srivaddhanaprabha family, but the debt was converted to equity.
“The long-term and ongoing financial security and commitment provided by Khun Aiyawatt, the Srivaddhanaprabha family and King Power International, enables the club to rebuild with certainty and confidence,” Whelan stated. The Premier League penalized Leicester with alleged PSR breaches and failing to submit audited finances 12 days ago, and the accounts have now been released. Leicester will have “add backs” such as spending on its women’s squad and academy, which will reduce their losses in the Premier League’s calculations, but they will report for 13 months rather than 12. This was a long-term club decision to align Leicester’s accounting with the rest of the business.
The £215.3 million loss over three years includes a £33.1 million pre-tax loss from the 2020-21 season, during which they won the FA Cup, and a club-record loss of £92.5 million the following year. Leicester might lose points if they are judged to have violated Premier League spending restrictions, which allow clubs to lose an average of £35 million per season. Because the case, including any appeals, is likely to last beyond the end of the current season, any potential sanctions will be implemented the following season. Top-tier teams Everton and Nottingham Forest have already received point reductions this season for violating the regulations.
The English Football League (EFL) is also investigating Leicester’s finances, having imposed a registration restriction on the East Midlands club in response to the Premier League charge. The Foxes responded by launching legal action against both the EFL and the Premier League.
