The Foxes are faced with the imminent threat of a significant points deduction after returning to the Premier League at the first attempt
Rarely has a promotion-winning club faced as much widespread uncertainty heading into a new season as Leicester City.
The Foxes returned to the Premier League at the first attempt after winning the Championship title in April but have various issues to contend with this summer before the 2024-25 campaign gets underway in August.
Leicester were charged with breaking the Premier League’s profit and sustainability rules (PSR) in March and are waiting to find out the extent of their punishment, which could include a significant points deduction.
There are also likely to be plenty of incoming and outgoings at the King Power Stadium with manager Enzo Maresca set to join Chelsea and a number of influential first-team players out of contract at the end of June.
i spoke to football finance expert Kieran Maguire and David Bevan, writer for The Fosse Way, to assess the club’s current position.
Leicester will ‘have to spring a rabbit from the hat’
The headline figure is that Leicester have lost £182.2m over the past two financial years. However, that does not represent their total PSR losses.
Costs including player depreciation and expenditure on the women’s team and academy can be written off, and both Leicester and the Premier League have kept the club’s PSR figure under wraps while an independent commission determines their fate.
Leicester posted £74.8m profit from player sales in their most recent accounts thanks to the big-money sales of Wesley Fofana to Chelsea and James Maddison to Tottenham Hotspur but paid the price for having the largest wage bill outside of the “Big Six” clubs during the 2022-23 season when they finished 18th in the Premier League.
The club’s PSR problems means that further player sales before the end of the 2023-24 accounting year on June 30 is surely inevitable.
Influential midfielder Kiernan Dewsbury-Hall is Leicester’s most valuable asset after scoring 12 goals and providing 14 assists in the Championship last season.
The 25-year-old also counts as “homegrown” having progressed through the club’s academy ranks and any transfer fee for him would represent “pure profit” in PSR terms.
“On the face of it, they are going to have to do quite a bit of juggling before the end of their financial year,” Maguire says. “That of course is the paradox because their focus will be on trying to stay up and to stay up you need to keep your best players.”
Losing Dewsbury-Hall would make sound financial sense but it would be a significant blow to Leicester’s ambitions next season.
They will be wary of the example set by Sheffield United, who finished bottom of the table with just 16 points last season after offloading their two best players Iliman Ndiaye and Sander Berge the previous summer.
There don’t seem to be many other options available to Leicester though, unless they can launch a successful appeal against the charge issued by the Premier League.
“Leicester are either going to have to rely on sales before the end of the financial year or are going to have spring a rabbit from the hat in terms of the argument that they put forward,” Maguire says.
How many points could Leicester be deducted?
The Premier League’s firm position on PSR breaches is clear after last season after they handed both Everton and Nottingham Forest points deductions.
Everton had 10 points docked, reduced to six on appeal, and lost two more points over a separate charge. Nottingham Forest were given a four-point deduction. Both clubs ultimately survived relegation.
The Telegraph have reported that Leicester could be deducted between six and 15 points. They could be penalised for submitting their accounts late if the independent commission reviewing their case deems that they were uncooperative.
“From what we’ve seen you get an immediate deduction for a breach of the rules,” Maguire says. “From reading one of the commission’s reports it’s then an extra one point for every £6.5m above the upper limit [of £105m].
“Given that Leicester lost so much money in 2022-23 [£89.7m], if they are charged you would be concerned that it could be a significant deduction.”
The imminent threat of a points deduction could impact Leicester’s search for a new manager as well as their transfer plans. Potential recruits may be put off joining a club starting a season on negative points.
“The names [of managers] are pretty similar to what was floating around this time last year before we got Maresca,” Bevan says.
“Even though we’re a Premier League club, that threat of that points deduction kind of makes it feel like we’re not. We’re not really any more attractive than we were this time last year.”
Maresca compensation ‘can only help PSR concerns’
If Maresca and his coaching staff move to Chelsea, Leicester will reportedly earn between £8-10m from their Premier League rivals in compensation.
That represents a significant financial package for a manager and his backroom team and will boost Leicester’s PSR concerns to an extent, albeit not significantly.
“I think they will welcome the manager compensation from a cash point of view,” Maguire says. “It can only help in terms of PSR but I don’t think that’s going to be their focus.”
Leicester may need to spend money to extract a new manager from another club, though, with West Brom’s Carlos Corberan currently the favourite to replace Maresca according to the bookies.
The 41-year-old, who spent three years as Marcelo Bielsa’s assistant manager at Leeds, has three years remaining on his deal with the Baggies.
“Corberan did brilliantly at Huddersfield,” Bevan says. “West Brom played well against us twice, particularly in the home game in April, when they really should have beaten us.
“If that was an audition, a lot of Leicester fans would be looking back at that game and thinking to have got that level of performance out of the players that he had both in that game and in the season as a whole to get them into the playoffs, is impressive.”
Key squad players out of contract
Although Leicester will be looking to sell players, it is also likely that others will depart as free agents at the end of their contracts.
Six members of Maresca’s promotion-winning squad are entering the final month of their deals including Jamie Vardy, who was the club’s top scorer last season with 18 goals.
While it is expected that the 37-year-old striker will agree to a one-year extension, the futures of Wilfred Ndidi, Kelechi Iheanacho and Jannik Vestergaard are less certain. Dennis Praet and 2015-16 Premier League title winner Marc Albrighton are likely to move on.
Vardy, Ndidi and Vestergaard were all key players under Maresca, but with the exception of Vardy, they may be reluctant to extend their deals until a new manager is appointed, allowing other clubs to pounce.
Leicester also had a few loanees in the Championship. They have triggered a clause to buy the promising Ghanaian winger Abdul Fatawu from Sporting Lisbon, but Yunus Akgun and Callum Doyle have returned to Galatasaray and Manchester City respectively.
It could lead to the Foxes having a depleted squad by the start of July which will require expenditure in the transfer market to rectify.
The club may have to budget carefully to avoid falling foul of PSR rules again next year but will also want to avoid a second relegation in three years. It’s a delicate juggling act that owner Aiyawatt “Top” Srivaddhanaprabha will have to navigate.
“It depends on what the objectives of the owners are,” Maguire explains. “If they want Leicester to be competitive in the Premier League next season, they might spend significant sums and keep their fingers crossed that they have a good season.
“For every position further up the Premier League you finish it’s worth an extra £3.5m so finishing 10th instead of 20th gives you a £35m boost in terms of your revenues which contribute towards complying with the rules.
“They will be doing an assessment and then it comes down to how much of a gamble they want to take.”
For the time being, the club is locked in stasis, waiting to discover the outcome of their PSR dispute and of Chelsea’s pursuit of their manager.
“At the end of last season, it was like, let’s just get promoted, get over the line and then worry about it later,” Bevan says. “But the uncertainty around the club is unsettling.”
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