By David Owen
March 10 – High-flying Leicester City, the shock Premier League leaders, are not just a transformed proposition on the pitch. Their financial prospects suddenly look as bright as Riyad Mahrez’s revelatory forward play or manager Claudio Ranieri’s post-match demeanour.
The Thai-owned East Midlands club has reported a pre-tax profit of £26.4 million for the year to 31 May 2015, its most successful in recent history.
This compares with losses of £20.8 million the previous year, its promotion season. That 2013-14 loss took to well over £80 million the club’s cumulative losses over three years.
Essentially, the club gambled, like others before it, on reaching the Premier League and securing its share of the vastly increased money flows that come with top-tier status.
Unlike any other club that has adopted such a strategy in recent times, Leicester have excelled to the point where they stand five points clear at the top of the table, making a Champions League berth for 2016-17 look almost a formality.
And while costs will ratchet up in recognition of the players’ success, the Foxes’ financial prospects now look rosy for at least the next two financial years.
The turnaround seems all the more astonishing as the club spent a big chunk of its first season back in the Premier League at rock bottom before mounting a spectacular last-gasp resurgence to finish 14th.
Turnover in 2014-15 more than tripled to £104.4 million, with the vast majority of the £70 million-plus increment attributed to television and other central income from the Premier League.
Staff costs did rise, as you would expect, from £36.3 million to £57.4 million. Expressed as a proportion of turnover, however, the latest figure amounts to 55%, against an unsustainable 116.7% the previous year.
The club, controlled by the Srivaddhanaprabha family, had net debt last May of only £5.9 million. The aggregate emoluments of the highest-paid director totalled a mere £145,000. Since the year-end it has invested £2.2 million in facilities, including construction of a players’ pre-match dining room and lounge at the intensely atmospheric King Power Stadium.
The directors’ assessment of the market value of a playing squad including the likes of Jamie Vardy, Danny Drinkwater and Wes Morgan at 31 May 2015 was £64.6 million, up from £28 million in 2014.
What on earth will the equivalent valuation be this year, ahead of a summer which may test the club’s ability to strike the right balance between cashing in its chief playing assets, who will be in high demand, and retaining the talent necessary to make the most of what could be another jaw-droppingly remarkable season?
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