by Leicester City are in the FA Cup quarter-finals for the first time since winning the competition three years ago, when they beat Chelsea at Wembley in front of the biggest crowd to attend a match since the coronavirus lockdown. For Leicester, that day can be divided into lasting photographs of a huge victory: Youri Tielemans finding the top corner with a 25-yard screamer, Brendan Rodgers beaming afterwards and Prince William handing the trophy to Kasper Schmeichel. Then the confetti fell as Schmeichel and Wes Morgan, all smiles, lifted the silverware overhead.
Leicester, three points clear at the top of the Championship, may get their hands on another trophy this season but, as they prepare to visit Chelsea in the Cup on Sunday, it’s worth remembering what happened in the following weeks that. An unforgettable Wembley victory shaped their current situation. Three days later, Leicester lost 2-1 at Stamford Bridge to leave them dependent on favor when it came to qualifying for the Champions League. Then, on the final day, they lost at home to Tottenham who missed out on the top four in the final of the season for years in a row. After two near misses in returning to Europe’s elite competition and with the most prestigious domestic cup secured for the first time, Leicester began to try to kick on.
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As revealed in the club’s statement accompanying its 2021-22 accounts detailing a record loss of £92.5m: “The club sought to build on the achievements of previous seasons.” Of course, it was the masters behind the biggest football miracle when they won the Premier League in 2016, two years after promotion from the Championship. Perhaps the key came from the club’s chief executive, Susan Whelan. “In order to comply with the regulations of the game both at home and in Europe – where we aim to compete regularly – our ongoing investment strategy must continue to reflect our underlying revenue growth,” she said, before referring to the importance of trading players – really. buying cheap to sell high – and recruiting smart.
Now we know that Leicester are in great danger of falling foul of those regulations; they face the potential double whammy of points deduction from the Premier League after allegedly breaching its profitability and sustainability rules (PSR) relating to the three-year cycle ending 2022-23 and a penalty from the English Football League if they violate the similar regulations i. the three-year cycle that ends this summer. If Leicester do not generate funds through sales before June 30, the EFL club’s financial reporting unit, a panel set up two years ago to monitor compliance with regulations, believes Leicester will exceed the £83m allowed losses over the relevant period. Leicester confirmed that they are “in discussions with football authorities regarding their profitability and sustainability calculations”.
Having missed out on Champions League qualification in 2020 and 2021 – losing to Chelsea on the final day in both years – the club were determined not to stand still. They spent around £50m on players, including Patson Daka, Boubakary Soumaré, Ryan Bertrand and Jannik Vestergaard, none of whom made a lasting impact in the top flight before last season’s disastrous relegation.
Leicester’s £182m wage bill in 2021-2022 was the seventh largest in the Premier League and, for the first time since their return to the top flight, they did not sell a major asset. In the previous five years they commanded huge fees for N’Golo Kanté, Danny Drinkwater, Riyad Mahrez, Harry Maguire and Ben Chilwell, generating more than £250m. Tielemans, who joined Aston Villa on a free transfer last year, was thought to be next but the club did not receive any offers. The impact of Covid has hampered the ability of clubs to sell players in a crash market. Leicester, understandably, felt they could push on but ended up in eighth place. And then 18th.
The destabilizing noises about Leicester’s battle to meet PSR are nothing new. In the summer before their release, Rodgers admitted that finances were far from ideal and told how he missed out on transfer targets after the club put the brakes on spending, despite the £75m sold Wesley Fofana, also to Chelsea. Since the January window, Enzo Maresca, who was in charge last summer, has expressed his frustration at not being able to add to his squad. Internazionale midfielder Stefano Sensi was his main target but he was told the club would have to sell players before any reinforcements.
All clubs are cautious and sales of home-grown players generate a net profit – seen as a golden means of offsetting spending – although Leicester rejected a £20m bid from Brighton for Kiernan Dewsbury-Hall in January. Off-field revenue streams are slow-burners that can make a world of difference to balance sheets, such as lucrative commercial deals or increased ticket sales through stadium expansion. It is also important to note that the PSR rules include provisions for allowable expenditure, such as money invested in stadium and training ground improvements, women’s football and the community.
As Leicester prepare to release their latest accounts for 2022-23, at the end of this month, they find themselves in a strange position. Their owner, King Power International, has deep pockets, but Leicester, like all clubs looking to destabilize order in the top flight, must play by the rules. The summer has had one of its biggest days in its nose around its neck. It wasn’t that long ago that Leicester were properly champions the exemplary club but one fatal step, if they did not already know, can prove extremely expensive.
