Leicester City chief executive Kevin Davies says the club has complied with the EFL’s financial rules for 2025/26 – and should benefit from changes to the rules that will come into force this summer.
Leicester’s financial management has come under serious scrutiny from supporters and the authorities after run-ins with the rules over recent years. The club was docked six points in February due to breaching profit and sustainability rules when they won promotion in 2023/24 – a penalty which condemned the Foxes to relegation from the Championship.
Leicester have lost £270 million in their last four accounting years and have already cashed in future parachute payments. The club borrowed from Australian bank Macquarie in January, secured against money they are yet to receive from the Premier League.
These matters were brought up when hierarchy met with supporter representatives on the Fan Advisory Board.
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Those representatives have now released a statement saying: “An area we know fans are concerned about is the financial stability of the club, particularly following our relegation to League One. The chief executive (Davies) has assured both the FCC Working Group and the FAB that the club will be compliant with Financial Fair Play (FFP/PSR) this season, and shared an update with us on changes to the way financial fair play is going to change in future, across the different leagues. The changes ought to be positive for Leicester City overall.
“As we all know, it’s been a very disappointing and difficult couple of years. The club desperately needs a reset, and we are ready and willing to work with the club on behalf of all fans to make sure that reset happens in a way that puts us fans and the football we deserve – from both our men’s and women’s teams – front and centre.
“We don’t have any remit over decisions on the footballing side itself, but will do all we can to make sure the views of all groups of fans are well represented and noted by those at the top of the club, to influence the kind of changes we all want to see, so that we can feel proud to be Leicester City again.”
Clubs in the Championship, including Leicester before relegation was confirmed, voted to abandon profit and sustainability to adopt a system called squad cost ratio. In brief, it means that clubs in the second tier can spend up to 85 per cent of their revenue on football costs such as wages and transfer fees.
In League One, clubs voted to allow up to 50 per cent of revenue to be spent on football costs. Leicester’s commercial revenue is expected to dwarf their new rivals.
Football finance expert Kieran Maguire warned on the Price of Football podcast this week: “Talking to some people recently who are in League One, they fear effectively they’ve got a sort of wage cap: 85 per cent in the Championship dropping to 50 per cent in League One under the change to their cost control rules.
“They fear that the cliff edge which exists already is going to grow even further and they’re not particularly happy about it. We’ve spoken about yo-yo clubs like Burnley going between the Premier League and Championship. Is this going to create something similar between the Championship and League One?”
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