Leicester City were once the darling of the Premier League. Their 5,000-1 title-winning season in 2016 remains one of the greatest stories in football and for years Jamie Vardy, Claudio Ranieri et al adorned marketing material that the head honchos of English football were happy to push all over the world.
Now, they have fallen foul of the cabal that keeps the Premier League’s natural order firmly in place, all for the crime of daring to dream. On Thursday they were charged by the Premier League, and on Friday by the EFL, all in the name of profit and sustainability, but for whom?
The problem, at the heart of it, is that even though Leicester won the Premier League, the FA Cup and reached a Champions League quarter-final, they were still a club that had been in the third tier less than 10 years before their title season, with an average attendance of around 32,000 and a global fanbase that paled in comparison to the established powers of English football.
That bore out in the figures too: according to Deloitte, Premier League clubs’ revenues passed £5bn in 2018-19, the last season unaffected by Covid. Leicester though only accounted for around £170m, less than Manchester United, Manchester City, Liverpool, Tottenham, Chelsea, Arsenal, West Ham and Everton. The last two were only just ahead – but the Big Six were miles in front. Leicester could have tripled their income overnight and still been behind the two Manchester clubs. Even doubling would only have seen them overtake West Ham and Everton.
And that’s where financial fair play and its subsequent reinventions hamstrings the ambitious: Leicester’s owner Aiyawatt Srivaddhanaprabha – Top, to everyone – has written off hundreds of millions of pounds in loans as he has tried to cement the Foxes’s place in the footballing elite. Before they were relegated, Leicester had one of the largest wage bills outside of the top six. In that context, Thursday’s announcement under profitability and sustainability rules (PSR) came as little surprise – so too the news on Friday that the EFL had placed Leicester under a transfer embargo.
“We’ve known it for at least two years. It was kind of rammed home the season before we went down. We sold [Wesley] Fofana and let Kasper Schmeichel go and then effectively didn’t replace either,” Jake Watson of The Big Strong Leicester Boys Podcast tells i.
“The club was saying that we had to cut costs. We were all a little bit confused at the time, thinking ‘Well, we actually haven’t spent that much’ and we never have done really.”
“The problem for us was that when we did then have the success that we did, we wanted to keep the players so we had to give them new contracts.
“When you’re fighting for top four, they want a contract which obviously reflects that.”
Leicester were paying Champions League wages, but without Champions League revenues, well over the 70 per cent of revenue that Uefa are aiming for as a cap in two years’ time. Those rules would have made Leicester even less competitive.
But FFP, PSR and the oligopoly of the Big Six cannot take all the blame. While Leicester were trapped in a spiral caused by dropping out of European football, many fans feel the footballing side was also mismanaged.
“When you look around that squad, it was a little bit confusing as to what on earth that money was being spent on,” Watson adds.
“[There were] a lot of average players. Some good obviously, but a lot of bad ones and that was the issue.
“They needed to move players on but couldn’t do, because they were on such brilliant contracts.
“And then because of that. they didn’t have the capital to go out and then bring in anyone new so they were they were kind of stuck with what they’ve got. We had a group of unhappy overpaid players.”
Leicester went down. They look destined to come back up, still joint top with Leeds United although hampered by three straight defeats in February and March, but will probably start the 2024-25 Premier League season on a points deduction – and may have to sell their best players just to stay within the guide rails of PSR. The downward spiral that started with missing out on Europe in 2022 continues, even as the Foxes drag themselves back up.
The only solution is to turbocharge the revenue base, virtually impossible without nation-state backing, but Top is trying: Leicester had planning permission granted in December for an 8,000-seat expansion to the stadium, and there are plans to add a hotel, business centre, events arena and residential flats to the development around the ground.
“The ambition is still there to grow the club and make money,” says Watson.
“But naturally he is going to be concerned that if you’re not back in the Premier League, from a business sense, it’s not as attractive. He’s definitely banking on being back in the Premier League.”
The Premier League will point to Leicester’s resurgence as proof that PSR works: they did not plummet to the brink of extinction after overreaching. But that they failed to make it stick despite winning two major trophies is also a proof of the system’s flaws.
And is it really any safer that Srivaddhanaprabha is having to make huge investments in the club’s infrastructure before Leicester have even got back into the Premier League?
“This next couple of months really is absolutely vital for the club, because if they don’t get promoted, financially I think it’s going to be a disaster,” Watson adds.
“It’s going to send the club back years, you’d imagine. Even best case scenario, if we go up to the Premier League, we’re probably going to start on a points deduction, and there’s a good chance we’re gonna have to sell some of our best players – and that’s the team that has just been promoted.
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