TOM COLLOMOSSE: Leicester City are no longer the model club to follow after posting losses of nearly £100m… their finances have spiralled since 2021 and James Maddison will have to be sold to fund a squad rebuild
- Leicester City announced losses of £100m this week after a difficult two years
- The Foxes were once seen as the model club to follow after their 2016 title win
- But now the club are in a relegation battle and will be forced to sell key players
The staggering record losses of nearly £100million posted by Leicester on Tuesday show how little margin for error there is for Premier League clubs operating outside the financial elite.
For much of the time since they won the title in 2016, Leicester have been presented as a model for other clubs to follow. Smart work in the boardroom and transfer market matched by impressive performances on the pitch.
No longer. Leicester recorded losses of £92.5m for the 12 months ending May 31, 2022 and are struggling badly this season, with Brendan Rodgers’ team only two points above the relegation zone, and the financial position means they will likely sell star man James Maddison this summer to fund a squad rebuilding job.
Less than two years ago, the Foxes won the FA Cup for the first time in their history and missed out on Champions League qualification on the final day of the season.
To understand why this has happened, you have to rewind to summer 2021. Leicester’s transfer model had been to sell a key player every year. N’Golo Kante, Danny Drinkwater, Riyad Mahrez, Harry Maguire and Ben Chilwell all departed under this formula, for a total of more than £250m.
Leicester City posted losses of £100m this week with owner Aiyawatt Srivaddhanaprabha (L) struggling to keep the team – managed by Brendan Rodgers (R) – competitive
The Foxes looked like the model club after winning the Premier League title in 2016 – but they have now lost that tag after running into financial difficulty
Yet two years ago, Leicester broke from tradition by keeping their squad together. The problem was that the business they did was awful. What can feel like minor mistakes at the time now feel much bigger.
Patson Daka (£27m from Red Bull Salzburg) is now third-choice centre-forward and has scored only three goals this season. Boubakary Soumare (£17m from Lille) has never been trusted by Rodgers and was so poor in the recent FA Cup humbling by Blackburn that it is hard to imagine him starting another game this season.
Leicester also signed two players, Jannik Vestergaard and Ryan Bertrand, who had been part of the Southampton defence beaten 9-0 by Rodgers’ Leicester in October 2019. Vestergaard cost about £15m and though Bertrand was a free transfer, he is at the higher end of the Leicester pay scale.
Neither has started a league game since January 2022 and Leicester have been desperate to sell Vestergaard since last summer.
The club will likely have to sell James Maddison in order to fund a rebuild of their squad
Keeping the squad together also meant the wage bill kept ticking upwards – the seventh-highest in the division. Had those signings worked, Leicester may have remained on an upward curve and the losses would not have felt so dire.
They would also have created value in the squad. Had Daka and Soumare shone, they could have been sold at a significant profit. Now Leicester know they will struggle to get their money back.
It is worth adding that the £75m sale of Wesley Fofana to Chelsea – a classic example of the Leicester transfer model – does not appear on this set of accounts. The departure of up to eight out-of-contract players will also create breathing space in the wage bill, as will the expected sale of Maddison and possibly Harvey Barnes. Owners King Power insist they remain fully committed.
Chief executive Susan Whelan acknowledged the need to generate ‘profits from player trading.’ In plain English, that means sell high, buy low.
But there is still plenty of work ahead – with the top priority being to stay in the Premier League. The alternative simply does not bear thinking about.
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