Leicester City Finances 2022/23

Hope And Despair

Leicester City’s 2022/23 accounts covered a season that the club said “was impacted by the regrettable results of the men’s team on the pitch, ultimately resulting in relegation from the Premier League” after the club finished in 18th place.

They did better in the cup competitions, reaching the fifth round of the FA Cup and the quarter-finals of the EFL Cup, but that could not mask the disappointment of Leicester’s nine-year spell in the top flight ending.

League Position

Chief executive Susan Whelan said that this represented an “unanticipated decline in sporting achievement in the context of the three seasons that immediately preceded it, which had seen Leicester finish eighth (2021/22), fifth (2020/21) and fifth (2019/20).”

In fact, before relegation Leicester had upset the odds to win the Premier League in 2015/16, won the FA Cup for the first time in 2020/21 and competed in three European campaigns, so the decline was striking.

Whelan added, “The club’s investment in its first team playing squad – a strategy reflected in eight previous seasons of high performance in the top flight – was, for the first time, not matched by on-pitch results.”

13th Month Impact

Before we start delving into the club’s finances, it’s worth noting the technical impact of the change in the year-end from May to June, which means that their 2022/23 accounts covered 13 months, compared to only 12 months in the prior year.

This brought Leicester in line with the vast majority of other clubs, but the extension also gave them an additional month to book player sales, which allowed them to include James Maddison’s big money move to Spurs.

However, this change also resulted in an additional month of expenses, while there was little impact on revenue, as there were no matches played in June.

This factor should be borne in mind when looking at Leicester’s comparatives, both against the previous year and other clubs.

Profit/(Loss) 2022/23

For the second year in a row, Leicester lost around £90m, though the pre-tax loss very slightly improved by £2m. The hefty loss was registered in spite of profit from player sales rising by £66m from £9m to £75m.

This was offset by the worse on-pitch performance, which led to revenue dropping £37m (17%) from £214m to £177m, exacerbated by operating expenses increasing £31m (11%) to £330m.

In contrast, net interest payable was cut by a third from £19m to £12m, mainly thanks to King Power converting £195m of loans into equity.

The main reason for the revenue decline was broadcasting, which fell £36m (24%) from £151m to £115m, due to a reduction in Premier League merit payments and the club’s absence from European competition for the first time in three years.

The lack of European matches also drove a £2.6m (13%) decrease in match day from £21.0m to £18.4m. However, commercial rose £2m (5%) from £42m to £44m.

Whelan argued that much of the club’s financial problems could be attributed to the “significant under-performance on the pitch”, but this surely cannot be used to justify a loss of this magnitude, especially as the strategy was effectively based on the club continuing to ride high in the league.

This brings to mind the famous line from Hamlet, “The lady doth protest too much, methinks.”

Partly due to the 13th month effect, Leicester’s wage bill increased £24m (13%) from £182m to £206m, player amortisation rose £5m (7%) from £72m to £77m and other expenses were up £4m (11%) from £34m to £38m. This steep cost growth was slightly offset by no repeat of the prior year’s £2.6m player impairment.

Leicester’s £90m pre-tax loss is clearly not great, but it is worth pointing out that they are far from alone in posting a large loss, as half of the Premier League lost more than £50m last season. Indeed, three clubs lost even more than Leicester, namely Aston Villa £120m, Tottenham £95m and Chelsea £90m.