But a deeper glance tells a different story. Even at the pinnacle of their success, Leicester were only one bad season away from tragedy. That reality is finally sinking in.
Leicester were recently docked six points in the Championship for violating the EFL’s Profitability and Sustainability rules.
The deduction is based on a pattern of financial losses reaching about £200 million over three seasons. The Premier League initially accused the club in May with infractions spanning three years, up to the 2023/24 season, and the EFL took over the investigation following Leicester’s relegation last season.
Under PSR laws, the club surpassed its permissible spending limit of £83 million over 36 months, with a total overspending of £20.8 million between 2021 and 2024. An independent commission rejected Leicester’s argument that fines alone would suffice, stating that “the appropriate sanction for such a serious breach is a sporting sanction (i.e., a deduction of points), and any lesser penalty would not adequately enforce the rules or ensure fairness for other clubs.”
While Leicester has denounced the penalty as “disproportionate” and stated that they will seek additional relief, the financial realities are difficult to ignore. The Premier League apparently advocated for a 12-point deduction, which would have been devastating.
The six-point penalty is rather moderate, but it still leaves Leicester uncomfortably close to relegation in the Championship, with only goal difference keeping them out of the bottom three. The club’s immediate future is shaky, with Marti Cifuentes’ departure leaving them without a manager.
Leicester’s current dilemma stems from their attitude to recruitment and wages in recent years. When the Foxes first ascended to prominence, they did so on a minimal budget and via savvy scouting. Jamie Vardy, N’Golo Kanté, and Riyad Mahrez were discovered at a low cost and went on to become legendary. However, once the team had reached the Premier League pinnacle, the management decided to invest heavily to enhance the roster.
When Brendan Rodgers wanted a squad revamp in 2021, Leicester made a significant investment. Patson Daka joined from Red Bull Salzburg for £23 million, Boubakary Soumaré for £17 million, and Jannik Vestergaard for £15 million.
A year later, the club added Wout Faes (£15 million), Harry Souttar (£15 million), and Victor Kristiansen (£17 million). Meanwhile, wages skyrocketed, hitting £206 million in the 2022/23 season, the eighth highest in the Premier League.
The gamble didn’t pay off. Leicester were demoted, taking their massive pay outlay into the Championship and causing a financial pressure on the club that is still felt today. Summer signings from 2022, including Faes (now on loan at AS Monaco) and Vestergaard, are still on long-term contracts at the King Power Stadium. Despite support from the Srivaddhanaprabha family, the club is now paying the price for aggressive recruitment and an inflated wage structure.
The Foxes’ struggles serve as a caution to other clubs operating at the upper end of their budgets. Newcastle United and Aston Villa, for example, have apparently had their own PSR compliance issues, while Leeds United must also carefully manage their finances to avoid similar punishments.
Newcastle’s results have yet to justify the financial firepower of PIF and significant summer investments in players such as Nick Woltemade, Yoane Wissa, Anthony Elanga, and Jacob Ramsey. Aston Villa, however, have experienced dissatisfaction on the pitch, with manager Unai Emery emphasizing the difference between ambition and capability, despite sitting third in the Premier League.
Leicester’s transformation over the last ten years, from Premier League champions to Championship strugglers on the verge of relegation, is a sobering reminder of how rapidly fortunes can shift.
Overspending, unwise hiring, and bad financial planning may undermine even the most exceptional achievement. Clubs aiming to grow sustainably should take note of Leicester’s experience: getting to the top is one thing, but remaining there demands discipline, thoughtful investment, and a long-term vision.
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