The crisis baton passes to Leicester City and Brendan Rodgers

LEICESTER CITY’s latest defeat,  at Tottenham Hotspur by six goals to two, underlines the crisis that is unfolding at the club. It also highlights the plight of their manager, Brendan Rodgers, who will be only too aware that he has a big hole to quickly dig himself out of. In the Premier League, there is always a “crisis club” and this season, the baton has passed from Manchester United to Liverpool to Chelsea to Leicester City. The moment a club dips into the crisis zone, they are rarely left alone to work themselves out.

The media, the owners and the fans start to analyse the situation and the answer is invariably a demand for drastic action. It is difficult for any club chairman not to do anything and it usually ends in the manager getting the sack, either by “mutual consent” or “in the interests of the club”. The future of Brendan Rodgers is now the most talked-about topic in the city of Leicester, aside from the death of Queen Elizabeth.

Leicester’s situation is not good, the results speak for themselves, played seven, lost six, one point, 22 goals conceded. Admittedly, they have had three very difficult away trips and in their seven games, four have been against the “big six”. But from the corresponding fixtures last season, Leicester picked up 10 points, so a decline has clearly taken place – in 2022, Leicester’s win rate in the Premier is 25%, in 2021, it was 45%.

This is arguably the biggest crisis of Rodgers’ career, his statistics are actually very healthy, with an overall career win rate of 52%. It is doubtful that Leicester would get a better coach in terms of his track record. He led Leicester to the FA Cup in 2021, beating one of his former employers, Chelsea, in the final.

The current position is such that a section of Leicester’s support turned against Rodgers and are calling for his dismissal. These days, it doesn’t take much for the dial to drift into the red, even if you did win the only FA Cup in the club’s history. Rodgers, as he said in his post-match interview, knows the score.

Rodgers has spoken of a chaotic summer at the King Power, with the club investigated by UEFA concerning Financial Fair Play and understandably cautious around transfer market activity. Fortunately, they escaped any sanctions from the governing body.

Leicester did lose two key players in Kasper Schmeichel (to Nice) and Wesley Fofana (Chelsea), which yielded a considerable amount of cash. Although pressure must be growing, Rodgers said before the game with Spurs that he has good backing from his board. “They have been very supportive, but I am not daft. I understand football but their support probably shows the level of work we’ve done here and the work behind the scenes.”

Leicester have a reputation for being well run and people consider they have very committed and reasonable owners. In 2020-21, the most recent financials released, the club generated £ 226 million in revenues, a 51% increase on 2019-20, but 85% of income is spent on wages. The club has more than £ 230 million of net debt, with over £ 200 million owed to the owners. Leicester made a profit of £ 44 million on player trading, an important part of their business model. Leicester is a club that does sell its top players from time to time and they do have talent that other clubs would willingly acquire for large sums of money. James Maddison is one such player and there was considerable interest from Newcastle United, among others, in the summer window. If they need to raise money to strengthen in the new year, a big fee could be received for the England international.

Reports suggest that Rodgers appears to have been dissatisfied with the club’s recruitment system. Since the last window ended, Leicester have hired a new head of recruitment, Martyn Glover, but the full benefit of his arrival won’t truly be felt until 2023. He has also spoken out about the need for fans to encourage players as the anxiety generated from the stands can affect the team. His comments were not appreciated by some of Leicester’s supporters and “Rodgers out” banners started to appear among the crowd.

Such is the short-termism of football, and that doesn’t just include boards and owners but also supporters of most clubs, the temptation will be to replace Rodgers. The days when chairmen take a chance that things will turnaround seem to have gone. However, will Leicester City actually get someone better and is nobody given the benefit of the doubt anymore?

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.