Leicester City announce club-record loss of £92.5m in latest accounts for 2021/22 season | Football News

The figure is almost triple the loss last year (£31.2m), although it is unusually high in part due to the Covid pandemic; Leicester owners were prepared for the big deficit after deciding to stretch their losses and maximize investment in the squad

Leicester City have posted a club-record £92.5million loss for the 2021/22 season, according to the latest reports.

The figure is almost triple the loss last year (£31.2m), although it is unusually high partly due to the Covid pandemic which has forced most of the season to be played behind closed doors.

Leicester haven’t cashed in on a big-name player either in the period with the sale of Wesley Fofana to Chelsea last August for a fee of more than £70million, which is set to appear in next year’s accounts.

Prepared for such a large deficit, Leicester owners made a conscious decision to increase their losses and maximize investment in the squad.

A club statement read: “Going into a second consecutive European season for the first time in our history, after consecutive fifth places in the Premier League (2019/20 and 2020/21) and winning our first FA Cup (2021) the club retained its primary playing assets while making further significant investments in player acquisitions and salaries.

“This approach was the main reason behind the club’s pre-tax loss of £92.5m for the year (2021: £31.2m loss), with the maintenance of the club’s key playing asset offsetting the gain on player sales for the year. “

This resulted in spending of £23m for Patson Daka, £17m for Lille’s Boubakary Soumare and around £15m for Southampton’s Jannick Vestergaard, as well as a significant increase in the squad’s overall wage bill.

In December, Leicester chairman Aiyawatt Srivaddhanaprabha relieved the club of its £194million outstanding debt in a key commitment statement from the owners.

Following the release of the club’s accounts, Leicester Chief Executive Susan Whelan said: “In our 12 years of ownership of King Power we have consistently sought to invest in the club’s future and build on established positions of strength.

“King Power’s unwavering support for the club provides a secure position from which to capitalize on our chances. However, in order to play the game both domestically and in Europe – where we aim to compete regularly – our ongoing investment strategy needs to continue to reflect our underlying sales performance.

“Our long-term goal is to achieve this through success on the pitch, the commercial growth that comes with it, as well as the expansion of our stadium and the development of the associated master plan.

“In the short term, profits from player trading and continued successful recruitment will continue to play a prominent role in our strategy as we look to continue to compete with more established opponents. This approach has served us well in the past and strengthened our ability to stay in the growth.” of the club and to form a cornerstone of the most successful era in Leicester history.

“Everyone at the club remains committed to the continued and responsible establishment of Leicester City as a consistently competitive force in the game’s premier competitions and as a powerful force for good in our communities.”

Leicester reported turnover of £214.6m for the year, down from 2021’s £226.2m, largely due to the reversal of booking time differences due to the pandemic, which was down 20 per cent (32.9 £m) of revenue from 2019/20 was recognized in financial year 2020/21.

The club’s underlying revenues increased, with UEFA receipts rising (£21.5m from £13.7m) and gate receipts from £0.5m to £21m as fans moved into the stadiums returned.

However, the increase in revenue was partially offset by a £6m year-on-year fall in Premier League revenue for 2021/22 due to a lower finishing placement.

Additional investments have also been made in the club’s squad and facilities on Belvoir Drive to further professionalize women’s and girls’ football.

Analysis: Leicester nowhere near FFP breaches

Sky Sports News Senior Reporter Rob Dorsett:

Whilst the club have long-term ambitions to rival the elite of the Premier League in terms of revenue, their current model remains to buy young talent, improve the squad with good coaching and set pieces and then sell some of those players on with big win.

As far as I know, Leicester owners and bosses are not concerned about the recent deficit. This is part of a broader tactical plan and such large losses are expected to be short-lived once the Fofana sale is registered in the accounts.

However, it’s clear these losses are unsustainable at such high levels and the figures go a long way towards explaining why the club has been frugal in recent transfer windows.

There has been hostility from some supporters who have accused the club of a lack of ambition as Leicester signed just one player – Wout Faes from Stade Reims for £17m – in the entire transfer window last summer, despite winning £75m for Fofana.

I’ve been told that despite such huge losses, Leicester are nowhere near a financial fair play breach.

King Power’s commitment to the club remains unwavering, with ownership in its 13th year.

Thailand-based duty-free King Power, which owns Leicester, has seen a marked improvement in trade since the end of the coronavirus pandemic and the Srivaddhanaprabha family has deep pockets – as evidenced by Chairman Aiyawatt, who announced last month that he had written off £194million in debt owed by the club to King Power.

This is not new “income” and therefore does not directly help with FFP, but it makes the balance sheet much healthier due to the “debt-to-equity transfer”.

A positive sign for Leicester is that underlying revenue is up year-on-year and the club’s strategy is to try and leverage that revenue with increased stadium capacity, a new venue and a new hotel, all planned over the next few years are to be increased significantly.

The club hierarchy believes this is the only way to be able to compete with England’s ‘Big Six’ clubs in the future and eventually move away from the current business model, which focuses on selling some of their best players for more Investment enable broader cadres.