When Leicester’s finances were questioned once, it’s normal. But 3 times on 3 separate issues?

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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15 Replies to “When Leicester’s finances were questioned once, it’s normal. But 3 times on 3 separate issues?”

  1. fascinating stuff Tony. I await the hordes of angry Foxes heading for the comments button!

  2. The first 2 are actually the same issue, so it’s one football related money issue

  3. Concentrate on your own club mate you sad case, studying Leicester a bit too much, bit jealous we won the league on free transfers?? Its just been noted Villa, who finished bottom outspent us the season we won the league, thats quite interesting.

  4. Some angry foxex behind the scenes…. just swearing not really bringing anything to a possible debate…. Maybe because they have nothing meaningful to say?

  5. Points 1 and 2 are linked, the comercial sponsorship being the reason why Leicester claimed they didnt break any rules point 3 until it is clarified regarding the area of King Power Duty Free floor space matched the original agreement this seems a cash poor government looking for an easy way of raising extra taxes, nothing to say they are not owed 15% and not 3% but we shall have to wait and see.
    Regarding the loan it was exchanged for shares meaning the entirety of the club now belongs to the owners.
    Leicester have a large fan base supported by Club Shops in the far east managed with great comercial success 4th in line only to Man U, Chelsea and Arsenal.
    Most people i talk to are jealous of the way Leicester is run. A management team that listens to the fans, supports the manager to the enth degree, owners that provide food and entertainment for free on various matchdays.
    I’ll take a bit of envy every day of the week over being say a West Ham fan!!!

  6. Is this issue connected in any way with the”unusual” pattern of events leading to Leicester winning the Premiership – ie the unique interpretation of the laws relating to the awarding of penalties at one end and denying them at the other?

  7. Come on John – we all know they deserved it that season. If refs were bias why would they favor leicester. The bookies lost a fortune

  8. Does it make any sense at all this next statement?

    “Laws are created to stop everyone else from stealing, just not us, he said.”

    Leicester winning the Premiership – Everyone now knows that money, refs, media and favourable fixtures can produce a PL winning team out of thin air, and on top of that, it can also stop (Arsenal fans know this) a team from winning it too.

    The PGMO and FIFA and all these football “ruling” organisations will probably be owned by, guess who?
    They probably are meant to come together as WUFA(World United Football Associ..) or something similar, and to control the money in football across the world more closely.

    Anyway Brexit and now Trump, seems like alliances and/or alliegences are starting to crack.

    Or i could be mad!

  9. With this lack of financial probity as being exhibited by Leicester CIty FC owners and by some individuals and groups connected with the club who are caught up in this financial corruption and the lack honouring agreement as agreed upon, and their flagrant violation of regulatory FFP Orders and rules as enforced by a constituted football governing authority, it looks like Leicester are in for a hard time a head.

    But they could overcome being seized and be put on sales to recover money owed. In the long run, the court authorities could strike out Leicester case in which they took the Football League management authorities to, for rulings on the ground of lack of the court judicial jurisdiction to entertain the case. And Leicester, if advised, could revert taking their case to the Football League regulatory body for hearing and determination of their case. Which if Leicester become unsatisfied with the rulings of the internal Football League regulatory and adjudicatory body, they could then if they so wish forward their case to the Court of Abbritation for Sports (CAS) for final determination of their case.

    On another topic related to Arsenal, a comment by Olivier Giroud himself in the media has revealed that he was given an option to stay behind and not to fly with the rest of the Gunners to Australia and China for the Arsenal pre-season friendly games. But he said, he refused taking the option and decided to fly along with his colleagues.

    Has this attempted action to leave Giroud out of their pre-season games in Asia by Arsenal tells us something? Have Arsenal already made up their minds to sell Giroud this summer for a hard good currency? Knowing fully well that if they don’t cash in of his sales this summer, he could pass a good resale value in the next two seasons when he clocks the age of 32.

  10. Yes, let’s crucify Giroud.

    Why did he start to miss games at the beginning of last season?

    You think he might like a chance to start this season on the right foot? To show that he should have gotten more playing time last season?

    Nah, it is just too damn easy to say he is shit, and flush him down the toilet.


  11. I hope UNTOLD has protected its site from attacks as much as they can, as i do think they will get worse.

    Some(the good ones) blogs/channels and alternative football reporting sites will increasingly come under attack. Why?

    This is the way it happens when one opposes and betters the “oficial” providers.

    For now, they have more control and resources.

  12. The bitterness is strong in this one. And even stronger in commenters para and John L.

  13. I haven’t spoken to anyone who is jealous of Leicester City winning anything. Quite the opposite. We were all – secretly or otherwise – rooting for them to get across the line, certainly by around six games to go. What I have heard from more than one person is absolute derision about the way their players bottled last season, notwithstanding the appalling treatment of Ranieri. Their winning the title was an outstanding moment in English football but they’ve since shown themselves up to be the same classless, self-indulgent, loyalty-free rabble that infects the game from top to bottom. I see the six players they bought in to ‘improve the squad’ are now all going straight back out this summer, and Riyad Mahrez is proving quite the little Judas on his day. Mr Wenger might do well to remember the phrase ‘one swallow does not make a summer’ before spending any money on this turncoat. I was delighted for Leicester City, but lost interest the moment they sacked Ranieri. They won’t be missed in the slightest if they go down this season.

  14. @ Flares,

    A bit harsh but mostly true I feel for a really good article 🙂

    At the very least raising a few questions like this would only seem jarring to those who favour or simply accept corrupt practices as a way of life, but not even Leicester’s dodgy dealings can put me off my mood today, that Lacazette goal 😀

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