Leicester revenue takes near £50m hit from Covid

The authoritative Swiss Ramble reviews the latest accounts of Leicester City from his base in Zurich.

The loss before tax widened from £20m to £67m, as the pandemic led to revenue dropping £28m (16%) from £178m to £150m, though profit on player sales rose £5m to £63m. Expenses rose £23m (9%), mainly due to investment in the squad. Loss after tax was £60m.

Revenue was significantly impacted by COVID, the main driver of the club’s revenue decrease was broadcasting income, which dropped £20m (16%) from £128m to £108m, while commercial fell £7m (18%) from £36m to £29m and match day was down £2m (11%) from £15m to £13m.

Of course, all clubs have been adversely impacted by COVID, so Leicester’s £67m loss is far from unusual with no fewer than seven clubs posting losses above £50m.  Without COVID, Foxes revenue would have been £46m higher at £196m (10% more than 2019).

£150m revenue is still £21m (16%) more than 2016, when they were crowned Premier League champions. However, much lower than the extraordinary £233m in 2017, which was boosted by £70m Champions League TV money.

Commercial income fell £7m (18%) from £36m to £29m, mainly due to deferral of £5m sponsorship to 2020/21. Second highest ever for the club, though a long way behind the Big Six, e.g. around £113m less than Arsenal £142m.

The figures significantly benefited from £63m profit on player sales, up from £58m, almost entirely due to Harry Maguire’s big money move to Manchester United. This is second highest in the Premier League to date, only surpassed by Chelsea.   The Foxes made hardly any money from player sales up to 2016, but profits from this activity have surged to an impressive average of £50m in the past four years. Next year‘s accounts will benefit from Ben Chilwell’s £50m sale.

Following promotion to the Premier League, the club had delivered four years of profits, amounting to £137m, before the last two years’ losses worth £87m in total. This was obviously boosted by the amazing £92m surplus in 2017, which is actually the 3rd highest profit in PL history.

The wage bill rose £8m (5%) from £149m to £157m, due to further investment in the playing squad, including contract extensions. Increase would have been even more if some bonuses had not been deferred to 2020/21. Wages virtually doubled in four years.  As a result of the revenue fall, the wages to turnover ratio increased (worsened) from 84% to 105%, the highest in Premier League to date in 2019/20.

The club have plans to expand the King Power stadium, increasing the capacity to around 40,000. The club has acquired land next to the ground and spent a further £1.8m since these accounts closed on detailed design and feasibility work.