A Financial Review of Leicester City

[ProfitsonTarget]

Good day Foxes,

I recently posted some financial information on the Foxes in this forum. I have now written an article on the financial situation of the club. I specifically focus on:

1) The impact of winning the Premier League on the club's finances.

2) How reinvesting the additional cash flows received has placed a bit of pressure on the club's recent profitability.

3) How a Champions League qualification will mean that the reinvestment made by the club in 2017/2018 will significantly pay off going forward.

I hope you enjoy, and please feel free to get in touch with any questions and comments.

Cheers and have a great day!

[wattolcfc]

All that research and you can't spell Jamie Vardy's name correctly 

[Oxfordfox83]

19 minutes ago, ProfitsonTarget said:

Good day Foxes,

I recently posted some financial information on the Foxes in this forum. I have now written an article on the financial situation of the club. I specifically focus on:

1) The impact of winning the Premier League on the club's finances.

2) How reinvesting the additional cash flows received has placed a bit of pressure on the club's recent profitability.

3) How a Champions League qualification will mean that the reinvestment made by the club in 2017/2018 will significantly pay off going forward.

I hope you enjoy, and please feel free to get in touch with any questions and comments.

Cheers and have a great day!

Thanks Grant, I enjoyed looking at the club from a purely business perspective.

 

The owners have always given a very positive impression of trying to build success on sustainable foundations (clearing our debt, buying the stadium, investing in sports science, the training ground etc.) - does that come across in your analysis compared with other PL clubs?

[North Leeds Fox]

24 minutes ago, ProfitsonTarget said:

Good day Foxes,

I recently posted some financial information on the Foxes in this forum. I have now written an article on the financial situation of the club. I specifically focus on:

1) The impact of winning the Premier League on the club's finances.

2) How reinvesting the additional cash flows received has placed a bit of pressure on the club's recent profitability.

3) How a Champions League qualification will mean that the reinvestment made by the club in 2017/2018 will significantly pay off going forward.

I hope you enjoy, and please feel free to get in touch with any questions and comments.

Cheers and have a great day!

Great article! It seems pretty crucial that we get over the line in the race for CL for our development. Obviously the current situation will affect all clubs moving forward so glad if we can get CL to have that revenue available.

 

Do you think that despite the increased revenue, it will still be prudent to sell a big player a year and try to lower the current wages to keep being sustainable going forward? 

[ProfitsonTarget]

1 hour ago, wattolcfc said:

All that research and you can't spell Jamie Vardy's name correctly 

What an awful and embarrassing mistake to have made!  thanks for letting me know though! 

[ProfitsonTarget]

1 hour ago, Oxfordfox83 said:

Thanks Grant, I enjoyed looking at the club from a purely business perspective.

 

The owners have always given a very positive impression of trying to build success on sustainable foundations (clearing our debt, buying the stadium, investing in sports science, the training ground etc.) - does that come across in your analysis compared with other PL clubs?

Thanks for your comments! The owners have certainly thus far shown some significant commitment to the club with, as you say, maintaining appropriate levels of debt and their consistent investment in the training grounds, stadium and playing squad. Compared to the other PL clubs, it would be suffice to say that the owners are certainly in the more responsible bracket, especially given their actions in relation to the financial parachutes received from Champions League football. It would have been very easy to payout those proceeds as dividends immediately after receiving them, but it seems that the ambitions of the owners match that of the fans. 

[ProfitsonTarget]

1 hour ago, North Leeds Fox said:

Great article! It seems pretty crucial that we get over the line in the race for CL for our development. Obviously the current situation will affect all clubs moving forward so glad if we can get CL to have that revenue available.

 

Do you think that despite the increased revenue, it will still be prudent to sell a big player a year and try to lower the current wages to keep being sustainable going forward? 

Thank you so much for your comments. With the position that the club is in at the moment, it would be an awful result to not qualify for the CL. I really do believe that this is a pivotal moment for the club in terms of putting itself on the stage of world football. 

 

I do think that, despite the increased revenue that should be coming through, it would be a good idea to continue to sell players but only if a solid transfer fee can be obtained as a result. It is such a difficult balance to get right between selling players for a good fee, selling players that constrain the wage bill but maintaining a cohesive squad. I believe that the current Leicester squad demonstrates an exceptionally high level of team spirit and togetherness, and it will be important to maintain that going forward. Fortunately the club obtained some decent financing from Macquarie which will ease any cash flow concerns from the constant wage bill, so I don't think selling a big player is a must at this stage, but if the right offer comes in, then it will certainly help the club maintain a sustainable financial position until they receive that Champions League payout.

[North Leeds Fox]

2 minutes ago, ProfitsonTarget said:

Thank you so much for your comments. With the position that the club is in at the moment, it would be an awful result to not qualify for the CL. I really do believe that this is a pivotal moment for the club in terms of putting itself on the stage of world football. 

 

I do think that, despite the increased revenue that should be coming through, it would be a good idea to continue to sell players but only if a solid transfer fee can be obtained as a result. It is such a difficult balance to get right between selling players for a good fee, selling players that constrain the wage bill but maintaining a cohesive squad. I believe that the current Leicester squad demonstrates an exceptionally high level of team spirit and togetherness, and it will be important to maintain that going forward. Fortunately the club obtained some decent financing from Macquarie which will ease any cash flow concerns from the constant wage bill, so I don't think selling a big player is a must at this stage, but if the right offer comes in, then it will certainly help the club maintain a sustainable financial position until they receive that Champions League payout.

Thank you for the response. Not sure the first paragraph will help my nerves when the football does resume  but really interesting to hear. 

 

That is really good to hear regarding the wages as that does seem to be a worry as it is very high as a percentage of turnover. However I presume that the champions league money would ensure us to sustain that for a season and hopefully use our participation as a driver to increase commercial revenue to lower that percentage. It would be good to keep the squad together and sell the players that are not playing but like you say, cant turn down a certain fee if it helps the squad grow like the HM money. 

[Red Squirrel]

2 hours ago, ProfitsonTarget said:

Good day Foxes,

I recently posted some financial information on the Foxes in this forum. I have now written an article on the financial situation of the club. I specifically focus on:

1) The impact of winning the Premier League on the club's finances.

2) How reinvesting the additional cash flows received has placed a bit of pressure on the club's recent profitability.

3) How a Champions League qualification will mean that the reinvestment made by the club in 2017/2018 will significantly pay off going forward.

I hope you enjoy, and please feel free to get in touch with any questions and comments.

Cheers and have a great day!

Excellent article and easy to assimilate Profitson Target - Thank you

So long as we don't do a "Devon Loch" and make it to the Champions League this year then we'll be very well placed to maintain our on-field status over the ensuing 3-5 years.

With the finances in good shape, a world class training complex as good as any and a prospective stadium expansion what a time we are living in as Leicester supporters! 

[ProfitsonTarget]

1 hour ago, North Leeds Fox said:

Thank you for the response. Not sure the first paragraph will help my nerves when the football does resume  but really interesting to hear. 

 

That is really good to hear regarding the wages as that does seem to be a worry as it is very high as a percentage of turnover. However I presume that the champions league money would ensure us to sustain that for a season and hopefully use our participation as a driver to increase commercial revenue to lower that percentage. It would be good to keep the squad together and sell the players that are not playing but like you say, cant turn down a certain fee if it helps the squad grow like the HM money. 

My pleasure! It should definitely make the resumption of the football season a bit more nervy than anticipated 

 

100%-that UCL money will really help the club in the long term and ease any cash flow concerns whilst also driving other revenue sources to ensure wages remain at a lower percentage. 

[ProfitsonTarget]

1 hour ago, Red Squirrel said:

Excellent article and easy to assimilate Profitson Target - Thank you

So long as we don't do a "Devon Loch" and make it to the Champions League this year then we'll be very well placed to maintain our on-field status over the ensuing 3-5 years.

With the finances in good shape, a world class training complex as good as any and a prospective stadium expansion what a time we are living in as Leicester supporters! 

Thank you so much for your comments.

 

Had to laugh at the Devon Loch reference! But as you say, it is a very good time to be a Leicester Supporter with all that is going on at the moment. One can only hope that the fallout from Covid-19 doesn't halt the momentum that the club has built on over the past year. 

[Lambert09]

We have no reason to question our owners whatsoever. However, of all the industries to be impacted by the pandemic, our owners business lies purely with one of the most effected industries. 

 

A concern could be that their personal finance takes such a hit that things could change. At this stage however, we have no reason to worry about them acting in anyway other than the right way. 

[ProfitsonTarget]

17 hours ago, Lambert09 said:

We have no reason to question our owners whatsoever. However, of all the industries to be impacted by the pandemic, our owners business lies purely with one of the most effected industries. 

 

A concern could be that their personal finance takes such a hit that things could change. At this stage however, we have no reason to worry about them acting in anyway other than the right way. 

I agree with you 100%. The fallout from the Covid19 pandemic is going to be extremely tough for every football club. The club's that are lower down will no doubt be the most affected. 

 

If there were any owner you could take during such a time, it would be the Leicester City owners as they seem to have acted in a way that none other benefits the club. 

[1972 Fox]

On 25/05/2020 at 13:20, ProfitsonTarget said:

Thank you so much for your comments.

 

Had to laugh at the Devon Loch reference! But as you say, it is a very good time to be a Leicester Supporter with all that is going on at the moment. One can only hope that the fallout from Covid-19 doesn't halt the momentum that the club has built on over the past year. 

Bumping this thread as I'm interested in any revisions to your previous analysis, considering that we did manage to do a 'Devon Loch' in the end. 

 

Thanks.