FFP, PSR, FFS: Leicester are reaping what we sowed
On Thursday, the Premier League charged Leicester with breaching profit and sustainability rules. While not unexpected, the club’s response has left us with a lot more questions than answers.
Editorial note: this post was published before the EFL announced Leicester’s transfer embargo and before the Princess of Wales announced her cancer diagnosis, which you would not expect to have any bearing on the subject whatsoever but will become relevant as you read on.
On Friday morning, I was listening to our man Iain Wright’s appearance on BBC Radio Leicester to discuss the Premier League charges which dropped yesterday evening, when one of the people on the panel questioned the league’s motives in charging us now.
I am all for rampant conspiracy theories. Whether about specific refereeing decisions, VAR, or heated balls during cup semi-final draws. But what exactly would the Premier League’s end goal be in this scenario?
Do we really think Dick Masters is orchestrating a deep-state plot to affect Kiernan Dewsbury-Hall’s mindset during the promotion run-in? Is this linked to the evil plots to get Notts Forest, Everton, and Manchester City, or are they different ones? Where does Mark Clattenberg fit into it all?
The Premier League may be systematically biased in favour of a handful of teams, but they are (probably) not using profit and sustainability charges as some kind of homing pigeon of death to take out a random assortment of middle of the road football operations.
What we believe as fans, though, is slightly beside the point. It’s far more concerning that this conspiracy theory also seems to be the official Leicester City position. The club statement in response to the Premier League charge, like its predecessor directed at the EFL a fortnight ago, was an exercise in evasion and deflection tactics.
Words and actions
The fundamental problem with Leicester’s attempts to shape this as a conspiracy, or as an unfair enforcement action against a club that has done no wrong, is that we know it isn’t true.
Our perilous financial state has been obvious for a while. We have been arguing about Financial Fair Play every transfer window for two years. There has been a laundry list of red flags to suggest things weren’t all hunky-dory behind the scenes.
Last year’s accounts reported losses in excess of £90m, we have gone running to Macquarie begging for money to ease our cash flow more times than I can count, and King Power converted nearly £200m in debt to equity last year.
After years of this kind of stuff, and hot on the heels of another transfer window where the club failed to sign anyone, you can’t pretend to the fans that everything is fine. It’s a little late to argue that all these charges are either crooked, wrong, or a misunderstanding. Not least because of the fact that both the EFL and the PL are going after us, two institutions that famously don’t agree on anything.
Yet that is apparently what Leicester are trying to do. On Thursday, the club came out in wide-eyed disbelief at the Premier League’s actions. You’re charging us? Now? With 10 games to go? On a Thursday? In March? They leaked to John Percy that they are “deeply unhappy with the timing of the statement”. Fine, but it’s not really the point.
Alongside those professions of confusion, which notably don’t dispute the underlying fact that we have broken the rules, we have thrown the kitchen sink of evasion tactics at these charges. Over the course of two official statements in three weeks, we have argued all of the following: You’re charging us at the wrong time, you’re charging us with the wrong thing, you shouldn’t be the ones charging us, we tried really hard not to break the rules, and yeah, well, the rules are wrong anyway.
Best of all, and presumably the work of a phalanx of lawyers and crisis PR consultants, we are simultaneously arguing that the EFL can’t charge us, as we were in the Premier League last season, and the Premier League can’t charge us because we’re currently in the Championship. Brilliant! Foiled again!
When you dig past the noise, though, what the club hasn’t done speaks louder than what it has said. As with the Royal Family’s desperate attempts to prove Kate Middleton hasn’t been abducted by aliens, there is a simple solution that would dispatch these issues at a stroke.
You could get a sinister AI bot to create a picture of the Princess and her family, then post a tweet, then release a grainy picture taken from the moon…or you could just, you know, produce her. Send her to the pub with Willy, problem solved. (Ed - Told you. May the force be with her.)
Likewise Leicester could have dealt with the Football League’s request for a sustainable business plan by…producing a sustainable business plan. Or the Premier League’s charge that they have failed to produce audited accounts by…producing audited accounts.
But we have not, which says everything you need to know.
Goal-setting and goal-getting
There is a section of the most recent official statement which bears quoting, because it seems to highlight the fundamental problem that runs through most decisions the club have made over the past couple of years. And with the decision to fight these charges on a bunch of technicalities rather than addressing the actual issue.
“LCFC has repeatedly demonstrated its commitment to the P&S rules through its operating model over a considerable period, achieving compliance while pursuing sporting ambitions that are entirely credible given the consistent success that the Club has achieved in that time, both domestically and in European competition.”
We have a complete inability to self-scout, or to understand the mistakes we have made. Making some mistakes is one thing, you are inevitably going to sign the wrong player or appoint the wrong manager occasionally, just like Mads Hermansen is inevitably going to Horlicks a pass straight to the striker while 40 yards outside his own goal at some stage.
What is less acceptable is failing to understand the reasons you have made them, making them repeatedly or failing to address them. Hermansen or the defenders giving the ball away occasionally is fine, because the payoff is that the playing style allows for extreme dominance or incredible goals, and on balance we are better off for that risk.
You can’t argue that you were entitled to break the rules because you tried hard and had ‘credible goals for success’. If I have credible plans to build a successful business, then rob a bank to get the money to start it, I will probably end up in the slammer, regardless of how credible my goals were. Your job is to find a way to achieve your goals within the rules.
(Plus, of course, there’s the large, herbivorous proboscidean mammal in the room: you botched it and got relegated, completely failing to meet your own goals for sporting success, and nobody was held accountable for it. But we’ve been over that.)
The second aspect is that we have ultimately fallen foul of these rules because of our own poor decisions, not because there’s anything wrong with our goals. The Leicester City model under King Power’s ownership for the last 10 years has been to create a sustainable Premier League club by consistently identifying or developing young players and selling them on.
“In the shorter term, as we look to continue to compete with more established opponents, profits from player trading and continued successful recruitment will continue to feature prominently in our strategy.”
There’s nothing wrong with that! That’s a perfectly fine policy! The issue is not that we have bad goals, but that we’ve have done a bad job of trying to meet them, and these charges are the logical end result of those failings and the risks we took along the way.
Since Covid, and since the FA Cup win in particular, we have made a series of choices which range from ‘understandable but ultimately a mistake’ to outright terrible decisions. All of this is stuff we have covered before, whether that’s choosing not to sell high-value assets in an attempt to break the top four, buying the wrong players, failing to sell unwanted players or handing out long, expensive contracts that we can’t afford.
These charges are what happens when you get those things wrong. They are not inevitable, but they are our own fault. That’s why other teams have done better than us recently without breaking the rules (yet, at least). That’s why Brighton have replaced us as the underdog darlings of the Premier League, why a bunch of teams with smaller stadiums and a lower wage bill have been able to have more success than us since the FA Cup win.
All of our blustering public pronouncements about the rules are either deliberately ignoring that, or the club simply doesn’t understand their own failings. Neither outcome reflects on them very well, because if they do understand their mistakes, then we’ve seen very little evidence that they’ve tried to fix them.
Instead, we’re trying to fight and deflect attention away from them, with a pretty dismal attempt at rallying the fans around the idea that we’re being unfairly treated.
That isn’t going to work. Because ultimately we know that we aren’t. We aren’t the first or the only club to be charged, everyone has half-expected these charges for a long time, and the lead-up to relegation destroyed any benefit of the doubt the leadership had to play with.
What we need instead is someone at the club to accept some responsibility and to rally us around a solution rather than a problem. We can’t keep hearing from the club purely through tedious account filings or official statements written by the lawyers. We need to hear from the people who got us into this mess, and we need to know what they’re going to do to get us out of it.
