Leicester City Achieve ‘Extraordinary’ Feat Amid Ongoing £180m PSR Battle, Says Finance Expert

According to the Premier League, Leicester City has complied with Profitability and Sustainability Regulations (PSR), with no complaints filed against the club.

Initially, concerns about financial shortfalls led to predictions of a points deduction for Leicester. However, those fears have now been alleviated.

Despite this success, an ongoing legal dispute between Leicester and the Premier League remains regarding alleged breaches during the 2022/23 season.

Although the club successfully appealed the case in September, Leicester still faces potential consequences.

A financial expert has now provided additional insight into the club’s situation.

Leicester City’s ‘Extraordinary’ Efforts to Avoid a PSR Charge

Leicester has previously avoided points deductions, but few expected them to escape punishment this time.

Finance expert Adam Williams has shed light on the remarkable measures the club has taken to comply with PSR regulations.

Speaking exclusively to Leicester City News, Williams stated:

“Very few expected Leicester to stay within the financial limit for 2023/24. I didn’t, nor did others I’ve spoken to in football finance.

Numerically, they must have done some extraordinary work to achieve compliance.

“When they were relegated, Leicester had a squad with a wage bill of £206 million—the highest outside the so-called Big Six by a significant margin.

Their annual amortization, the method clubs use to account for transfer fees over time, was £77 million, among the highest for non-Big Six clubs.

“Leicester lost over £180 million during the 2021/22 and 2022/23 seasons.

Achieving compliance with the £105 million allowable three-year loss threshold by the end of 2023/24 is remarkable, even with allowable expenses considered.

“Their legal team, led by Nick De Marco, utilized a loophole in Premier League rules to avoid breaching PSR for 2022/23.

However, for 2023/24, their compliance appears straightforward, without reliance on accounting tricks.

“Although the Premier League is appealing Leicester’s 2022/23 case, legal experts suggest their chances of success are slim due to the high evidentiary bar.”

Financial Strategy for 2024/25

Leicester must avoid repeating past mistakes, such as overspending on players whose performances fail to justify their costs.

The club needs to return to a financially sustainable model, focusing on signing affordable players and selling them at high profits—a strategy that has propelled clubs like Brighton from relegation threats to European competition contenders.

Leicester’s £6 million acquisition of goalkeeper Mads Hermansen in 2023 serves as a prime example.

Hermansen has become one of the Premier League’s most promising goalkeepers, attracting interest from Manchester United.

While fans may worry about losing Hermansen, especially if relegation looms, the club has some financial breathing room this season.

Journalist Josh Holland noted on social media platform X that Leicester’s £92 million loss from 2021/22 will not factor into the next three-year financial cycle.

As a result, Leicester can afford to lose up to £79 million in 2024/25 while still complying with PSR.

This flexibility is encouraging from a spending perspective.

However, the club must remain prudent, making wise investments during transfer windows to secure financial stability and success on the pitch.