A decade ago, Leicester City were the darling of English football, the ultimate underdogs who defied 5,000‑1 odds to topple the Premier League’s established elite and claim one of the most improbable title wins in history.
The Foxes captured the imagination of fans worldwide with their blend of grit, teamwork, and unheralded talent. Their success didn’t stop there. Just five years ago, Leicester lifted the FA Cup by defeating Chelsea at Wembley and reached the semi-finals of the Europa Conference League. From the outside, the club appeared to be perfectly run — a small club achieving far beyond expectations.
But a closer look reveals a different story. Even at the peak of their achievements, Leicester were only ever a bad season away from disaster. That reality is now hitting home.
Leicester have recently been sanctioned with a six-point deduction in the Championship after breaching the EFL’s Profitability and Sustainability Rules.
The deduction stems from a pattern of financial losses totaling approximately £200 million over three seasons. The Premier League had initially charged the club in May for violations covering the three-year period up to the 2023/24 campaign, and the EFL took over the case after Leicester’s relegation last season.
Under the PSR regulations, the club exceeded the permitted spending limit of £83 million over 36 months, with total overspending reaching £20.8 million between 2021 and 2024. An independent commission rejected Leicester’s argument that fines alone could suffice, emphasizing that “the appropriate sanction for such a serious breach is a sporting sanction (i.e., a deduction of points) and any lesser penalty would not adequately enforce the rules or ensure fairness for other clubs.”
While Leicester have protested the sanctions as “disproportionate” and indicated they will seek further recourse, the financial realities are hard to ignore. The Premier League had reportedly pushed for a 12-point deduction, which would have been catastrophic.
The six-point penalty is relatively lenient, yet it still leaves Leicester teetering dangerously close to the relegation zone in the Championship, currently sitting outside the bottom three only on goal difference. With the club also without a manager following Marti Cifuentes’ dismissal, the immediate future is precarious.
The origins of Leicester’s predicament lie in their approach to recruitment and wages over the past few years. When the Foxes first rose to prominence, they did so with a shoestring budget and shrewd scouting. Jamie Vardy, N’Golo Kanté, and Riyad Mahrez were discovered at modest costs and went on to achieve legendary status. Yet, once the club reached the Premier League summit, the management opted for heavy spending to upgrade the squad.
When Brendan Rodgers demanded a squad refresh in 2021, Leicester invested heavily. Patson Daka arrived from Red Bull Salzburg for £23 million, Boubakary Soumaré for £17 million, and Jannik Vestergaard for £15 million.
A year later, further additions included Wout Faes (£15 million), Harry Souttar (£15 million), and Victor Kristiansen (£17 million). Meanwhile, wage bills soared, reaching £206 million in the 2022/23 season — the seventh-highest in the Premier League.
The gamble did not pay off. Leicester were relegated, bringing their enormous wage expenditure into the Championship and creating a financial strain that the club continues to feel. Summer signings from 2022, including Faes (currently on loan at AS Monaco) and Vestergaard, remain on substantial contracts at King Power Stadium. Despite backing from the Srivaddhanaprabha family, the club is now paying the price for aggressive recruitment combined with an inflated wage structure.
The Foxes’ troubles serve as a warning to other clubs operating at the upper end of spending limits. Newcastle United and Aston Villa, for instance, have reportedly faced their own challenges with PSR compliance, while Leeds United also need to carefully manage finances to avoid similar sanctions.
For Newcastle, despite the financial firepower of PIF and substantial summer investments in players such as Nick Woltemade, Yoane Wissa, Anthony Elanga, and Jacob Ramsey, results have yet to justify the expenditure. Aston Villa, meanwhile, have seen frustrations on the pitch, with manager Unai Emery highlighting the gap between ambition and capability, even while sitting third in the Premier League.
Leicester’s journey over the past ten years — from Premier League champions to Championship struggler on the verge of relegation — is a stark reminder of how quickly fortunes can change.
Overspending, risky recruitment, and poor financial planning can undo even the most extraordinary success. Clubs looking to grow sustainably must heed Leicester’s story: the climb to the top is one thing, but staying there requires discipline, careful investment, and a long-term vision.
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