Leicester City managed to only sign two players in the transfer window, releasing several, loaning one, and selling one. Here is the FFP-shaped reason why.
During the summer transfer window, the King Power club struggled to make any impact, and were the last club in Europe’s top five leagues to secure a signing. This frustrated supporters. A myriad of possible reasons were speculated upon.
Anything from having no money, too many players at the club, or even a failure to identify talent was thrown about. Of course, an underpinning conversation of ‘Financial Fair Play’ (FFP) regulations was ongoing. It seems FFP played the crucial role.
What is FFP?
FFP regulations are essentially sustainability requirements imposed upon football clubs. They exist for the primary and purest purpose of preventing wanton spending which jeopardises the longevity of the project.
To out it simply, no club can spend more than £3.9m over what they earn in commercial revenue, although there is an allowance of £26m over that amount should the costs be covered. The measures are spread over a three-year period to monitor sustainable growth and control spending.
Wages, transfer costs, and other such financial burdens are included within the regulations. Whereas capital investment in assets such as training grounds and stadium expansions are not included.
How has this impacted Leicester City?
The Foxes are treading a fine line on FFP. With highly paid players and one of the highest paid head coaches, the East Midlands side need to acquire good revenue to comply with spending regulations.
Think of the bench talent such as Ayoze Perez and Jannik Vestergaard. According to SalarySport, the pair are on around £80,000 and £75,000 per week respectively. £150,000 wasted on the bench and that is before considering the wages of the highest earners at the club.
In fact, UEFA only found Leicester ‘technically’ able to meet their break even requirements thanks to the application of emergency COVID-19 measures. Otherwise, the Foxes do not meet FFP requirements, and they will not be able to use this in the next FFP report.
Sustainability is extremely important. We have seen too many teams fall into financial ruin and fall outside the official football league due to a splurge of spending at one point, failures on the pitch, and losing out on revenue with excessive costs. The King Power club must be run well. Unfortunately, as reported by LeicestershireLive, the Foxes cannot spend anywhere near the same levels as some of the juggernauts in the Premier League.
For example, Manchester City have an immense pool of investments creating a vastly superior stream of revenue from their academy. Leicester hardly sell youth players for the same sort of fees.
Importantly then, Khun Top’s role now is to invest in capital assets and improve the commercial revenue of the side, allowing them to spend more. Remember, although they have lost a lot of money over the pandemic, our owners remain wealthy and able to invest.
From stadium expansions to the brilliant training ground, Leicester City must start to compete with the top six both on and off the pitch if they are to succeed in the long term. It would also have been useful to be in European competition. It seems we shall have a few seasons outside once again.
Personally, I believe there are three areas to progress at the moment. First, the stadium expansion is critical to increasing revenue, alongside the larger fan store. Second, reducing the wage bill for players outside the first team to rein in the costs. Finally, developing a strong and high exposed academy to earn more cash from outgoing transfers.
Where do you feel the King Power side can still invest, or do you feel we need to offload some of those benched earners to make space and financial sense? Let Foxes of Leicester know on our social media channels.