Finance expert Kieran Maguire has given his verdict on Leicester City’s latest financial accounts.
The club’s finances have been under scrutiny amid alleged Premier League rule breaches, with it being revealed earlier this week that they posted a loss of £89.7 million for the 2022/23 campaign.
The Foxes have been charged by the Premier League for a possible breach of their profit and sustainability rules, as clubs are only permitted a loss of up to £105 million over a three-year period.
This could lead to a points deduction either this season or next if the club is found guilty after an independent commission’s hearing, with Everton and Nottingham Forest having already received similar punishment for falling foul of the same rules.
Leicester had failed to submit their finances to the league prior to this week, instead sending them to the EFL, which had led to some uncertainty over whether they had broken the rules or not.
Kieran Maguire’s Leicester finances verdict
Maguire has admitted his shock at the extent of the dire financial situation at Leicester following the reveal of their accounts for the 2022/23 season.
He believes it is the first time in league history that wages are higher than revenue in a non-pandemic campaign.
“Like many people, I was quite taken aback,” said Maguire, via When You’re Smiling: A Leicester City Podcast.
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“I knew it wasn’t going to be a great year but the fact the club had to extend its financial year to 13 months to squeeze in a couple of sales to reduce the losses to just £90 million, I think was indicative to what a challenge it was.
“We know that the revenue would be down but I was amazed to see that the wage bill went up so high.
“I think for the first time, in my knowledge, of the Premier League, they were paying more money out in wages than was coming in through the door in a non-Covid year.
“It’s the only time that’s ever happened in Premier League history.”
Leicester City league position
This has the possibility of jeopardising Leicester’s promotion campaign, if a points deduction is handed out this season.
The club could also start next year with a deduction, regardless of division, so that would also be quite damaging to their campaign.
It is also likely that the Leicestershire outfit will have to sell more key players this summer in order to help solve their financial problems, which will be tricky for Enzo Maresca’s side.
Leicester are currently third in the Championship table, but have a game in hand on their automatic promotion rivals.
Failure to go up without receiving a points deduction could be a nightmare scenario for the club.
Leicester’s mess could take a long while to fix
Leicester will likely have to sell key players again this summer after losing the likes of James Maddison, Harvey Barnes and Youri Tielemans last year.
Kiernan Dewsbury-Hall is an obvious candidate to be sold given the speculation over his future in previous transfer windows.
This could be a situation that takes years to resolve, however, as it’s clear that wages have become a huge issue for the club.
Player sales will hurt Maresca’s squad, and could make it difficult for the team to be as competitive next year, regardless of division.
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