Leicester City have agreed to pay the Football League £3.1m to settle the league’s long-running claim that the club breached financial fair play rules when they made a £21m loss in their 2013-14 season. Leicester won promotion from the Championship that season after their owner, Vichai Srivaddhanaprabha, who owns Thailand’s duty-free company King Power, had invested more than £100m since his 2010 takeover, and subsequently they won their unlikely Premier League title in 2016.
The Football League’s then-new FFP rules, aimed at improving its clubs’ financial sustainability particularly in the Championship, set out sanctions including heavy fines for clubs which made losses greater than £8m in 2013-14. Leicester, spending heavily on players’ wages, made a £34m loss in 2012-13, then reduced it to £21m, partly due to receiving a large increase in income from a marketing deal signed with Trestellar Limited, a company run by the son of the former Premier League chairman Sir Dave Richards. That deal, under which Trestellar sold the sponsorship of the club’s shirt and stadium back to King Power, is understood to have been under investigation by the EFL when considering whether Leicester breached the rules.
Leicester argued they had not breached the rules, which make allowances for expenditure on youth development, a stadium and other infrastructure, and that the Trestellar deal had been concluded following “an extensive tender process” to find the best partner to market the club worldwide. The club then stated it was not only disputing any findings against its own losses, but “the legality” of the FFP rules themselves. Queens Park Rangers, who were also found to have made excessive losses, challenged the rules’ legality but an arbitration panel found for the EFL in October The EFL and Leicester announced the £3.1m settlement in identical statements, which gave little detail about the issues considered. The statements made clear that: “In reaching the settlement, the EFL acknowledges that the club did not make any deliberate attempt to infringe the rules or to deceive and that the dispute arose out of genuine differences of interpretation of the rules between the parties.”