Leicester City: How did we get here and what does the points deduction mean for the Championship club?

Leicester spent just over £100m to sign six players during the 2021-22 and 2022-23 seasons.

It wasn’t just transfer fees that caused problems, it was salaries and contracts.

The club’s wage bill has ballooned to £206m.

“Everyone assumed they would be one of the top eight clubs,” football finance expert Kieran Maguire told BBC Sport.

“They budgeted for it effectively and didn’t take into account the potential downside.”

Maguire said Leicester had become “a bit complacent” with the contracts.

Premier League players’ contracts typically contain clauses that will reduce salary by 30% or 50% upon relegation.

It is widely reported that Leicester did not enter anything at the time.

“They’ve had one bad season and they haven’t been able to come back in terms of the relegation terms and the terms of avoiding relegation,” Maguire added.

“These contracts appear to have been awarded in a way that ignored the existential risk of downside,” he added.

Without the safety net provided by these provisions, in the 2023-24 championship season, the club was spending 116% of its income on salaries.

Maguire said the £107m wage bill was “unprecedented for a club in the second tier of football”.

Leicester may have won the Championship in 2024, but it came at a cost. Huge cost.

The wages to income for the other two promoted teams was 84% ​​for Leeds and 80% for Southampton. Maguire said the tournament average was 29%.

Wyeth said the fund felt the budgets were “incredibly risky”.

“There were not enough safeguards to think about what could go wrong,” Wyeth added.

“We were all saying, what if we get relegated?

“The fans can see them walking into it.”

After promotion in 2024, the club still had to face financial problems.

The issue has already been pointed out by a Profit and Sustainability Rule (PSR) charge brought by the Premier League in March 2024. The club successfully appealed against this on technical jurisdictional grounds.

Spending in the tournament was then an incentive to breach the PSR threshold by £20.8m, resulting in a points deduction.

But there will be no Premier League stay to ease their plight as the Foxes returned straight back to the Championship last season, finishing 13 points clear.

“They relied on player sales to get them out of a really messy situation,” Maguire said. “But if you keep selling your best players, it will catch up with you.”