Leicester City’s relegation: Financial impact and questions over Ruud van Nistelrooy’s future

Leicester City’s potential relegation from the Premier League, their second in three seasons, could have significant consequences, according to LeicestershireLive’s Chief Business of Football Writer, Dave Powell.

The Foxes are strong favorites to return to the Championship after a poor 2024/25 campaign.

Ruud van Nistelrooy’s team currently sits 19th in the league with nine matches remaining and faces the daunting task of overturning a nine-point gap to Wolves to avoid the drop.

This would mark a swift return to the second tier just a season after Enzo Maresca guided them back to the top flight.

However, the financial repercussions of missing out on Premier League football could be severe.

Despite a clear need for reinforcements in January, Van Nistelrooy could only bring in Woyo Coulibaly.

Chairman Aiyawatt ‘Top’ Srivaddhanaprabha admitted the club’s hands were tied due to Profit and Sustainability Rules (PSR), limiting their ability to strengthen the squad.

“January was a challenging month for us in the transfer window, where our ability to strengthen was limited by our PSR position,” Top explained in his pre-Arsenal programme notes.

“We were very pleased to sign Woyo Coulibaly and explored several options to make further additions to Ruud’s squad.

However, the available space in our PSR calculations did not allow us to bring in the additional quality we felt was needed.

“We remain ambitious, have always been committed to investing in the squad, and will continue to be in the future.

But our ambition must be pursued within the laws of the game.”

With relegation looming, Leicester now faces a battle with the English Football League over their past financial dealings.

Dropping out of the Premier League comes with serious economic implications.

“Relegation from the Premier League is hugely impactful on a number of levels from a financial perspective,” Powell explains.

“For Leicester, the consequences could be significant.

“The Foxes have yet to release their financial accounts for the 2023/24 season, but we already know they haven’t breached the Premier League’s PSR regulations.

Football finance expert Swiss Ramble had forecasted a modest £5 million loss for the period.

“Relegation triggers wage reductions for some players, but not across the board.

The club would likely work to cut the wage bill, and some of their most valuable players could be put up for sale, as is common in such situations.

These sales would help offset the financial hit.

“But another factor is the management team. Would the club stick with Ruud van Nistelrooy and his staff after such a disappointing season?

A change in leadership could add further financial strain.

Leicester now faces a crucial period as they try to fight off relegation while preparing for the possible financial and managerial upheaval that could follow if they fail to survive.