Leicester City’s Financial Turmoil Continues
Leicester City has reported a pre-tax loss of £89.7m for 2022/23, raising concerns over the club’s compliance with the Premier League’s Profit and Sustainability Rules (PSR).
The English top-flight’s PSR regulations prohibit teams from making a loss of more than £105m over a three-year period.
However in light of Leicester’s latest annual financial report, the club’s losses have now totalled £215.3m between 2020 and 2023. Last year, Leicester made a loss of £92.5m, following a loss of £33.1m for 2022/21.
Since finishing 18th in the 2022/23 season and subsequently being relegated from the Premier League, Leicester has also been under recent pressure from the English Football League (EFL).
Last month, the EFL placed a transfer embargo on Leicester, after an independent Club Financial Reporting Unit (CFRU) forecast the East Midlands club to exceed its own Profit and Sustainability (P&S) loss limit of £83m by the end of a three-year period.
If the EFL deems Leicester to have breached the governing body’s permitted loss limit, the club could reportedly be subject to a point deduction as part of more stringent P&S sanctions. The Foxes are currently third in the Championship table on 85 points, with the opportunity to reclaim top spot with the team’s game in hand.
Overall, the club’s revenue dropped from £214.6m last season to £177.3m for 2022/23. Leicester cited the lower position in the Premier League table, as well as a lack of European football, as key contributing factors for this. The report says it saw a £15.3m reduction in Premier League revenue, and missed out on the £25.6m revenue from UEFA competitions that it had received in the previous year.
Despite making a loss, Leicester revealed a net profit of £74.8m in player sales, after the departures of James Maddison and Wesley Fofana to Tottenham Hotspur and Chelsea respectively.
Sponsorship revenue rose by £1.3m over the last year, while commercial revenue was up by £1m on 2021/22.
In a statement revealing Leicester’s financial results, the club said ‘LCFC remains engaged in a confidential process with the Premier League and the English Football League, regarding the club’s Profitability and Sustainability calculations.
‘The club is determined to ensure that any charges against it are properly and proportionately resolved, in accordance with the applicable rules, by the right bodies, and at the right time.’
Leicester City Chief Executive Susan Whelan said, “After a sustained period of growth and success for the club during 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 seeking to return to and re-establishing ourselves in the Premier League.
“Having achieved finishing positions in the Premier League of fifth, fifth and eighth in the three preceding seasons, our targets and associated budgets for 2022/23 were entirely reasonable.
“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 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. We’re infinitely grateful for the faith and support of our fans, whose commitment and loyalty continue to inspire our mission to restore Leicester City to the level at which we all want it to compete.”
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