By David Owen
March 9 – Leicester’s Champions League adventure has combined with general inflation in player transfers to push the market value of Riyad Mahrez and the rest of the Foxes’ squad to above £300 million, according to the Thai-controlled club’s directors.
The newly-filed 2016-17 accounts reveal that player trading contributed £38.8 million to the monumental £92.5 million pre-tax profit for the year to May 31 which the club announced earlier this month. This takes account of the transfers of N’Golo Kanté to Chelsea and Jeffrey Schlupp to Crystal Palace, but not Danny Drinkwater’s big-money move, also to Chelsea, which took place after the financial year-end.
As detailed in the new document, the Champions League appearance – which saw Leicester reach the quarter-finals before being knocked out by Atlético Madrid – contributed just over £70 million to turnover, which nearly doubled year-on-year to £233 million.
Gate receipts and commercial revenue were also up, but on-field success seemingly had no impact on sponsorship and advertising revenue, which actually edged down a notch to £14.3 million.
The accounts note that the club’s immediate parent undertaking is King Power International and that member companies of the King Power group had “entered into sponsorship agreements with Trestellar Limited in relation to the acquisition of sponsorship and marketing inventory including the front of shirt sponsorship and the stadium naming rights”. New LED advertising boards account for part of £2.8 million in facilities investment undertaken since the year-end.
The club, whose prospects of silverware this season now hinge on an FA Cup quarter-final tie against Chelsea, looks to have benefited from a depreciation of sterling against the euro during its Champions League season: the accounts refer to a “gain on euro-denominated revenue from UEFA of £4.1 million”.
Administrative expenses and cost of sales both jumped sharply, with employee costs reaching £112.6 million, up from £80.4 million. Even so, top-line growth was such that the ratio of staff costs to turnover dropped to a comfortable 48.3% from 62.4% in the club’s Premiership title-winning season of 2015-16.
Aggregate emoluments of the highest-paid director more than doubled year-on-year to a still comparatively modest £325,000, from £158,000. Three of the six directors are members of the controlling Srivaddhanaprabha family, with the others being Shilai Liu, Supornthip Choungrangsee and Susan Whelan, the chief executive.
The club is party to a management agreement with K Power Sports Investments. The cost of management services provided and the balance outstanding at the 2016-17 year-end under this contract was £3.5 million. The £3.48 million balance of another management agreement, which ended in 2013, was paid on 6 July 2017.
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