by Tony Attwood
As you may know, if you are a regular reader, Untold takes quite an interest in football finances, and we’ve covered a large number of clubs whose financial matters don’t seem to be 100% as they ought to be. Leeds, Cardiff, Portsmouth… well if you’ve been with us, you’ll know.
In the end we’ve concluded that one set of accusations about a club or its owners’ finances being odd is just normal in football. It’s commonplace.
But when a club or its owner is picked up on two separate matters then things begin to look a bit odd. And as for three times, well, nothing is proven of course and everything might be hunkydory but three sets of strange stories about financial matters. That is stretching incredulity.
Of course coincidences do happen and three utterly different financial tales circulating around one club and its owner is quite possibly a set of coincidences and everyone is wholly innocent – as of course they are until anything otherwise is proven. But it does raise the odd question mark. Or three.
And this is the difficult place that Leicester City FC find themselves in. Not one, not two, but three financial oddity issues raised in recent years. Nothing is proven of course, everything may be utterly perfect, but if it were my company I’d be making sure after the first brush with financial probity that nothing but nothing could be thrown at us again.
To give a quick rundown, Untold starting wondering about Leicester when the FFP issues arose concerning their promotion from the championship to the Premier League. In this case they were helped by the fact that the Football League’s rules were new and had not be fully tested, so they argued fiercely that they had done nothing wrong.
Ever since then the argument about how much money they spent getting promotion to the Premier League has been ongoing, and Leicester City are now legally challenging the charge brought against them by the Football League of breaching Financial Fair Play (FFP) rules in 2014.
In doing this they are moving into unusual if not uncharted territory because matters between a club and the league are not supposed to go to court. They are supposed to be dealt with by football’s own regulatory bodies.
That tale is all about the amount of money Leicester could lose while winning promotion from the second tier to the PL in 2014. The limit was £8m – a story we covered in detail at the time when Leicester lost almost £21m. The argument has been running ever since and Leicester have moved from saying they didn’t lose that much to challenging the legality of the rules themselves.
Of course this was not the first club to get uppity about FFP rules. QPR challenged them in 2015 when they were fined £58m. Bournemouth were fined £7.6m in 2016.
That story was still jogging along nicely with a club challenging the validity of a League rule when a second Leicester story popped up. It hardly made the news, but we covered it on Untold, and to their credit so did the Guardian.
Then as now the Premier League refused to co-operate on FFP with the Football League, and since the Premier League very publicly produced its own FFP rules and then utterly failed to implement them, they have been silent, leaving the Football League to sort out its own matter.
But then in January 2014, as we reported, Leicester announced that Trestellar Ltd was marketing the club, and as a result without any new sponsorships arriving sponsorship income for Leicester immediately went up over 300%.
The Guardian then went looking and found the marketing company performing this miracle “was set up on a Sheffield trading estate by the son and daughter of Sir Dave Richards, a former Premier League chairman.” It had no website, no phone number, and didn’t even have a nameplate on the door. and yet was the home of the “exciting international marketing and licensing partnership.” Leicester refused to speak and the media other than the Guardian refused to consider the matter. It was as if they felt that you simply couldn’t criticise plucky Leicester.
But Sir Dave Richards was the man who resigned as chair of Sheffield Wednesday as they faced relegation and huge debts. His company went into administrative receivership (meaning a creditor wanted their money back). He then became Premier League chairman. The Guardian suggested his opening salary was £176,667 per annum.
What worried those of us at Untold was that the amount Leicester City got in sponsorship was completely out of context for what clubs without a worldwide fan base can get – even when they look likely to win the league (which they didn’t of course, when the deals were struck).
Damian Collins, the Conservative MP on the House of Commons culture, media and sport committee, has said: “Leicester should answer the questions publicly, to explain this arrangement, which looks unusual to say the least, to reassure people it was not an attempt to evade the FFP rules.” Nothing happened.
Certainly until this point, spending vast amounts of money on a club to get it into the Premier League has seemed to be a mugs game, because the club invariably comes back down with loads of debts.
But Bournemouth and Leicester have worked out a way of keeping going in the PL after spending vast amounts in the Championship, which starts to raise questions and speculations.
So that was two financial affairs the raised the odd eye brow. And now, in a third case, King Power, who own Leicester have been accused of £327m corruption in Thailand. Not a football matter of course. Maybe a coincidence. But I don’t like coincidences, so I write about them.
King Power is owned and run by the Leicester chairman, Vichai Srivaddhanaprabha, and his son Aiyawatt. They are said to have underpaid the Thai government a cut of the duty free franchise at Bangkok’s Suvarnabhumi airport The allegation is that King Power worked alongside airport employees to pay the government far less than it should.
This is particularly interesting since King Power bought Leicester for £39m and then lent the club £100m to buy players, and then wrote off the loan.
The new legal cases asks the court to seize all the money due and then some. Which could mean seizing Leicester City FC and then putting it up for sale. Leicester’s owners’ case is not helped by the fact that their contract to run the airport’s duty free was granted by Thaksin Shinawatra, who owned Manchester City. But he was thrown out of club and country. And apparently this is only the first case against King Power, with at least three more following.
What makes this more fun is that Premier League rules prohibit people from owning more than 30% or being a director of a club if they have been convicted of a criminal offence of dishonesty. At the moment no one has been so charged. The charges are against the companies.
Still, three different suggestions of odd doings over a short period in three different areas of enterprise Quite interesting really.
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