Leicester find themselves in a FA Cup quarter-final for the first time since going on to win the competition three years ago when, in front of the biggest crowd to attend a game since the coronavirus lockdown, they overcame Chelsea at Wembley.
For Leicester, that day can be split into lasting snapshots of a momentous victory: Youri Tielemans locating the top corner with a screamer from 25 yards, Brendan Rodgers subsequently haring off down the touchline and Prince William handing Kasper Schmeichel the trophy. The confetti rained down as Schmeichel and Wes Morgan, all smiles, lifted the silverware overhead.
Leicester, three points clear at the top of the Championship going into this weekend, may well get their hands on another trophy this season but, as they prepare to visit Chelsea in the Cup on Sunday, it is pertinent to remember the degree to which the weeks that followed that unforgettable Wembley win shaped their current predicament.
Three days later, Leicester lost 2-1 at Stamford Bridge to leave them relying on favours when it came to qualifying for the Champions League. Then, on the final day, they lost at home to Tottenham to miss out on the top four in the last knockings of the season for successive years. After two near-misses at returning to Europe’s elite competition and with the most prestigious domestic cup secured for the first time, Leicester set about trying to kick on.
As the club statement accompanying their 2021-22 accounts detailing a record £92.5m loss outlined: “The club sought to build on the successes of preceding seasons.” They were, of course, the masters behind arguably the greatest footballing miracle when in 2016, two years after promotion from the Championship, they won the Premier League against all odds.
Perhaps the key line came from the club’s chief executive, Susan Whelan. “In order to remain compliant with the game’s regulations both domestically and in Europe – where we aim to compete regularly – our ongoing investment strategy must continue to reflect our underlying revenue progression,” she said, before referencing the importance of player trading – in effect buying cheap to sell high – and shrewd recruitment.
Now we know Leicester are at serious risk of falling foul of those regulations; they face the potential double whammy of a points deduction from the Premier League after allegedly breaking its profitability and sustainability rules (PSR) relating to the three-year cycle ending 2022-23 and punishment from the English Football League if they breach its similar regulations in the three-year cycle that ends this summer.
Unless Leicester generate funds through sales before 30 June, the EFL’s club financial reporting unit, a panel set up two years ago to monitor compliance with the regulations, believes Leicester will exceed the permitted £83m losses across the relevant period. Leicester have confirmed they are “in discussions with football authorities regarding its profitability and sustainability calculations”.
After missing out on qualifying for the Champions League in 2020 and 2021 – losing out to Chelsea on the final day both years – the club were determined not to stand still. They spent about £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 the disastrous relegation last season.
Leicester’s £182m wage bill in 2021-22 was the seventh-biggest in the Premier League and, for the first time since returning to the top flight, they did not sell a major asset. In the five previous 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 last year, was thought to be next but the club received no bids. The impact of Covid hampered clubs’ ability to sell players in a crashed market. Leicester, understandably, felt they could push on but finished eighth. And then 18th.
The destabilising noises about Leicester’s battle to meet PSR are nothing new. In the summer before they were relegated, Rodgers conceded the finances were far from ideal and told how he lost out on transfer targets after the club put the brakes on spending, despite the £75m sale of Wesley Fofana, also to Chelsea. Since the January window Enzo Maresca, who took charge last summer, has sounded his frustration at not being able to add to his squad. His primary target was the Internazionale midfielder Stefano Sensi but he was told the club needed to sell players before any strengthening.
All clubs are mindful sales of homegrown players generate pure profit – it is seen as a golden method to offset spending – though Leicester rejected a £20m bid from Brighton for Kiernan Dewsbury-Hall in January. The off-pitch revenue streams that can make the world of difference on the balance sheets, such as lucrative commercial deals or increased ticket sales via stadium expansion, are slow-burners. It is also important to note that 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 set of accounts, pertaining to 2022-23, at the end of this month, they are in a peculiar position. Their owner, King Power International, has deep pockets but Leicester, like all clubs intent on destabilising order in the top flight, have to play by the rules. The summer after one of their greatest days has proved a noose around their necks. Not so long ago Leicester were rightly championed as the model club but one fatal misstep, if they did not know it already, can prove extremely costly.
