Leicester City lose money but gain a trophy

IT has become very clear Leicester City have moved to the periphery of the Premier League top six, as evidenced by their title win in 2016 and FA Cup success in 2021. Their 2020-21 campaign was excellent, a first-time FA Cup win, beating Chelsea 1-0, and a top five placing. They have come a long way from the days when they were considered an underachieving, inconsistent club.

Yet despite the memorable triumph at Wembley stadium, Leicester City made a pre-tax loss for the third consecutive year, albeit half as much as 2019-20 when their deficit was £ 67.3 million. City’s loss of £ 33.1 million was partly due to the almost wipe-out of matchday income, which declined from £ 13.1 million to £ 0.5 million. The other contributory factor was a 22% increase in staff costs, with the wage bill rising to £ 191.2 million from £ 157.5 million.

Leicester’s turnover totalled £ 226.2 million, a 51% rise on 2019-20 and the seventh highest in the Premier League. Only once, 2016-17, have the club enjoyed a higher level of income. The club appears to have lost around £ 50 million in revenues during the two covid-affected seasons.

Media contributed the biggest slice of the pie, £ 184.5 million, representing 82% of total revenues. Aside from matchday earnings, the club’s commercial activities grew to a record £ 41.1 million (£29.3 million 2019-20).

The loss of matchday earnings and the increase in player compensation meant the wage-to-income ratio at Leicester was 84.9%, a substantial figure and one of the highest at the top level, but less than 2019-20’s enormous 105%. Importantly, it should be noted the rise in wages was partly due to deferred salaries. 

The club’s squad is currently valued at £ 462 million by Transfermarkt. In 2020-21, Kelechi Iheanacho, was the top scorer with 19 goals, ending a five-year run in which Jamie Vardy was leading marksman. Leicester have a number of players who would command decent transfer fees, such as Wifried Ndidi (£ 50 million-plus), Youri Tielemans (£50 million) and James Maddison (£ 45 million).

Leicester made a £43.9 million profit from player sales in 2020-21, compared to £ 63.1 million a year earlier. The profit was made almost entirely from the sale of England defender Ben Chilwell to Chelsea for £ 45 million. Leicester also went into the market, signing Wesley Fofana from Saint-Étienne for £ 31.5 million and Timothy Castagne for £ 18.5 million from Atalanta. Since rejoining the Premier in 2014 and up until the end of 2020-21, Leicester ranks as the eighth highest spender having paid out £ 473 million. 

The club is looking to expand the King Power Stadium, raising its capacity to around 40,000. The ground is currently valued at £ 41.5 million and has a crowd limit of 32,000. Leicester have also made investments in Leicester City Women FC and new training facilities, as well as spending £ 2.1 million on the King Power pitch.

There’s no doubt Leicester City benefits from having generous and responsible owners, but the club now owes them £ 180 million. Gross debt now runs to £ 287.6 million, but with cash increasing by 24% to £ 50.9 million, net debt totals £ 236.8 million, some 33% higher than 2020.  

The club has examined its cash flow forecasts and the conclusion is that it is still reliant on external bank funding and its holding company, King Power International (KPI). Leicester entered into a five-year £ 42.5 million loan with KPI and has also replaced its £ 52.5 million loan from Macquarie Bank with an £ 80 millian, four-year facility. There is also an undrawn £ 35 million standby loan with KPI for use in severe circumstances.

The current season hasn’t gone as planned and their league form has deteriorated. They were also humbled in the FA Cup by midlands rivals Nottingham Forest, but they are still in the UEFA Europa League and will play Rennes in the last 16. Football’s fickle nature has been underlined once more by some calls for manager Brendan Rodgers to be replaced just nine months after winning the FA Cup, but the Leicester board recently gave him a vote of confidence. Oh dear. 

Leicester City win the facemask final

PEOPLE just cannot get their head around the fact that Leicester City are not a little club, that their elevation to the fringe of the “big six” was not through sheer toil and acumen but because they have sound financial backing and a regime that has successfully reached out to the local community and won many friends in the Midlands. They are owned by billionaires, like Chelsea, like Manchester City, like Arsenal, like Manchester United and Liverpool. 

Leicester’s deserved success in winning their first FA Cup was treated with euphoria by the media, by Mr Gary Lineker, by those that despise the European Super League concept and those that especially dislike Chelsea. Leicester may be owned by billionaires, but they are, in the public eyes, the “right” billionaires rather than a publicity-shy Russian who used to have Vlad Putin in his address book. 

Roman Abramovich started the circus in 2003 and Leicester were one of the clubs that jumped aboard and found their own monied benefactor. In the league table of wealthy owners, the Leicester backers are relatively modest, but the King Power influence has allowed Leicester to climb above the rest of the pack. 

They became the 44th winner of the FA Cup, the first since 2013 when Wigan beat Manchester City and only the 13th new winner since World War Two. Chelsea are no strangers to winning the competition in the Abramovich era, but they had to wait until 1970 for their first FA Cup triumph. The FA Cup’s rich history, along with 31 of the 44 winners, was moulded long before Leicester’s first final in 1949 and Chelsea’s 1970 win.

The fascination of the underdog has long been part of FA Cup folklore, and to many, Leicester were cast in that role before kick-off, however inappropriate that tag may have been. The Premier League title win of 2016 will always be one of football’s most unlikely tales, but the FA Cup win, a glorious moment to be enjoyed, was not a seismic shock – Brendan Rodgers’ team are third in the league table, after all. Leicester have been one of the teams of 2020-21 and they had already beaten Chelsea earlier in the season.

You could argue that the classic defeated fans’ explanation, “they wanted it more than us”, may well have applied to Chelsea’s failure to take full control of the game. For all their expenditure, Chelsea fielded a £ 70 million goalkeeper lacking confidence,  an expensive striker who has a sizeable jury still in discussion about his worth and midfielders who lacked punch and precision. Chelsea had 64% of the ball, but failed to exploit it. There was no Ben Chilwell, Kai Havertz or Christian Pulisic in the starting line-up – Thomas Tuchel may have a few regrets.

By contrast, it was difficult not to be impressed by Leicester’s commitment and the performances of Kasper Schmeichel (the man of the match), Wesley Fofana, Jamie Vardy and Youri Tielemans. And what a winning goal! Tielemans netted with a spectacular right-foot drive from 25 yards midway through the second half. It was a strike that earned its place in the great Cup Final goals of all time.

Schmeichel pulled off a spectacular save from Mason Mount, but the real drama came in the final seconds when Chilwell – heartily jeered every time he touched the ball by his former fans – thought he had helped Chelsea equalise when his effort went into the net via Wes Morgan. Chilwell, was, according to VAR, offside.

The script had been written in advance, it was time for a little romance, especially in this era of bitter division within the game. Victory for Leicester was a win for those that would have been marginalised by the European Super League concept. Although Chelsea were the first to withdraw, they will always be quilty by association. Leicester, incidentally, would probably have been the biggest club in the Premier League if the project had gone ahead.

On this day at Wembley, with the vaguely peculiar sight of 22,000 people in a stadium, Leicester were certainly winners of the FA Cup final that will surely forever be known as “the facemask final”.

Photo: ALAMY