When Leicester City were relegated from the Premier League just over a year ago, the impact on the club was always going to be long-lasting.
The financial issues caused by that unexpected demotion are still being felt this summer, even after their immediate return to the top flight.
Leicester’s continuing efforts to restabilise their financial position and conform to profit and sustainability rules (PSR) have presented a challenge as they attempt to build a squad capable of staving off another relegation and rebuilding a foundation in the Premier League, a task that is neither cheap nor easy.
If anyone thought the club could just pick up where it left off and continue to offer the same transfer fees and wages to prospective players, their frustrations this summer have shattered that myth.
Leicester certainly have money and there is no financial crisis. They don’t have to sell to generate funds, although they also can’t be caught carrying too many players either. It is a question of spending those funds sensibly and sustainably.
The club is still fighting a Premier League charge for a breach of profit and sustainability rules for the 2022-23 season on jurisdiction grounds. But, however that situation pans out, they are no longer in the position they have been in over the last few years when they were able to offer lucrative deals and contracts to new signings. Although the recovery has begun, the game moves on at a fast pace and Leicester are now playing catch-up again.
Initially, once the previous financial year finished on June 30, Leicester were able to complete some quick deals, sealing the permanent signing of Abdul Fatawu for £14million after his exciting season on loan in the Championship, securing free agent Bobby De Cordova-Reid to provide some experience, and adding more youth in defender Caleb Okoli (£12.5m) and midfielder Michael Golding (£5m). Another teenager, Argentinian attacking midfielder Facundo Buonanotte, has more recently joined on loan from Brighton.
Facundo Buonanotte arrived on a season-long loan from Brighton (Plumb Images/Getty Images)
However, pre-season performances have demonstrated the obvious and alarming deficiencies in new manager Steve Cooper’s squad, particularly Premier League experience and quality in attacking positions.
Cooper has repeatedly stated how this area of his squad needs to be addressed urgently, but Leicester have so far been frustrated in their efforts to provide solutions.
They have certainly been aiming high.
There have been enquiries for Reiss Nelson at Arsenal, Fabio Carvalho when he was at Liverpool and Steven Bergwijn at Ajax, but there have been no subsequent offers.
Leicester have also been actively trying to bring in experienced duo Jordan Ayew from Crystal Palace and Wilfried Zaha from Galatasaray.
The financial cost of bringing in 31-year-old Zaha and the tax implications for the Ivorian forward were he to return to the Premier League have proven problematic, and Zaha has now returned to training with his Turkish side. That move now looks dead.
The move for 32-year-old Ayew is looking more likely to progress, although again there is still work to be done to agree a deal with his club and his personal terms.
Leicester have made approaches to sign Bayer Leverkusen forward Adam Hlozek on loan with a view to buy as well as Panathinaikos striker Fotis Ioannidis, who is understood to valued at £25million. That would represent a considerable investment for Leicester even after the £30m sale of Kiernan Dewsbury-Hall to Chelsea in June, a deal that eased Leicester’s concerns over a breach of profit and sustainability rules for last season.
It would take up a significant chunk of the budget and Leicester must weigh up whether it is viable.
Leicester must weigh up whether a move for Fotis Ioannidis is viable (Milos Bicanski/Getty Images)
There is still some work to be done to finalise the Hlozek loan, which will include an obligation to make the move permanent if Leicester avoid relegation this season, but there is competition for Ioannidis, most notably from Sporting CP, who can offer Champions League football.
One of the other clubs to be linked are Southampton, who came back up with Leicester after winning the Championship play-offs. They have been productive so far in the summer window, bringing in Ben Brereton Diaz from Villarreal, Adam Lallana from Brighton, Charlie Taylor from Burnley, Nathan Wood from Swansea City, Flynn Downes from West Ham United and making the loan of defender Taylor Harwood-Bellis from Manchester City permanent, as well as other deals.
The other promoted side, Ipswich Town, are in a completely different position to Leicester. Instead of a recalibration of their structure and finances, Ipswich have been on an upward trajectory for over two years with back-to-back promotions, and they have completed six deals to date — Omari Hutchinson from Chelsea, Ben Johnson from West Ham, Jacob Greaves from Hull City, striker Liam Delap from Manchester City, Arijanet Muric from Burnley and Conor Townsend from West Bromwich Albion.
Both Southampton and Ipswich appear to have been active in a different — and more cautionary — market to Leicester so far.
Rather than competing with clubs expected to be their rivals to avoid relegation, Leicester seem to have been aiming higher, with clubs like Brentford, who completed a £27million deal to sign Carvalho — a deal Leicester wouldn’t do.
Brighton and Hove Albion are also understood to have activated the £40million release clause in Georginio Rutter’s Leeds United contract, a deal that matches Leicester’s club-record fee paid for Youri Tielemans in 2019.
They are deals that reflect the change in the Premier League pecking order. Where Leicester City would have been seen to be shopping in the next market up to those clubs previously, now Brentford and Brighton are in the stronger position — although Leicester’s fall from grace should be a cautionary tale in the risks such levels of spending carry in such an unpredictable environment as the Premier League. Budgets and expenditure correlate with finishing positions but are no cast iron guarantee, as Leicester found in 2022-23 when they had the seventh-biggest budget and finished 18th.
The reality for Leicester is they have had to regroup and reset after relegation, and build again prudently.
Ten years ago, when they returned to the top flight after a decade away, they moved quickly to sign Marc Albrighton, Matthew Upson and Ben Hamer on free transfers. Then they committed a club record fee of £8million for Brighton striker Leo Ulloa.
It wasn’t until close to the end of the window that they added Danny Simpson for £2million, Tom Lawrence for £1m and, most notably, the experience and influence of Argentina’s most decorated player at the time, Esteban Cambiasso — although arguably the most influential signing didn’t come until January with the loan of Robert Huth.
With two weeks left of the transfer window there is still time for Leicester to find some similar solutions and, while there is concern among the fanbase, and Cooper has expressed his desire — and that of his players — to have reinforcements quickly, there appears to be little panic internally at Leicester — although the clock is ticking.
The belief is this window could explode towards the end, in the final few days, as other clubs look to move players on with their own finances in mind.
Leicester hope to be in the thick of it — and they need to be.
(Top photo: Marc Atkins/The FA via Getty Images)
