The Football League is still investigating Leicester Citys 2013-14 promotion season, amid strong concerns from other clubs they may have cheated financial fair play rules
Leicester Citys dash to an unlikely Premier League title is billed as footballs most romantic story in a generation but the Football League is still investigating the clubs 2013-14 promotion season amid strong concerns from other clubs they may have cheated financial fair play rules.
The clubs owner, the billionaire Thai businessman Vichai Srivaddhanaprabha, who owns his countrys duty-free company King Power, bankrolled Leicesters rise from the Championship with more than 100m after he took over the club in 2010.
The investigation centres on a deal Leicester say they did in January 2014 with a company called Trestellar Ltd, to market the club in the UK and south-east Asia. That deal immediately produced an apparent 11m increase in Leicesters sponsorship and commercial income, reducing the clubs loss from 34m the previous year. In the clubs most recent accounts, for 2014-15, Leicester say Trestellar sold the clubs main sponsorships the name on the players shirts and the stadium to King Power, the clubs owners.
The Thai owners were already sponsoring the shirt and stadium before the Trestellar deal; in 2012-13 Leicesters sponsorship and other commercial income was 5.2m. After the Trestellar deal, with King Power still holding the same main sponsorships, the income immediately jumped to 16m.
That substantially reduced Leicesters loss, which was otherwise likely to have resulted in a large fine under the Football Leagues then new financial fair play rules by which all clubs agreed to cap losses at 8m to try to reduce excessive spending on players wages. Losses under FFP rules are not reduced by a club owner paying money to the club, or by doing so via sponsorship, if the amount paid is clearly inflated beyond market value.
Leicester still say Trestellar paid the club for the rights to market their brand, then sold the sponsorships to the owners. The resulting smaller loss 21m in 2013-14, including expenses clubs are allowed to offset meant Leicester argue they complied with FFP rules and no sanction should be applied. Some other clubs are furious, arguing they reduced spending on players to comply with the rules while Leicester overspent on players wages, achieved promotion and have since resisted any sanctions.
Leicesters 2013-14 accounts state they spent 36m on players wages, 5m more than the clubs entire income the goalkeeper Kasper Schmeichel, the captain Wes Morgan, the prolific striker Jamie Vardy and other core players were already on the payroll then although Leicester said 9.4m comprised bonuses paid on promotion. During the season, in January 2014, Leicester signed Riyad Mahrez from Le Havre for a reported 560,000, and the Algeria midfielder has since been instrumental in Leicesters promotion and remarkable Premier League turnaround.
Trestellar, the company which produced this immediate increase in sponsorship and commercial income vast for a Championship club was a newly formed company. It was set up on a Sheffield trading estate by the son and daughter of Sir Dave Richards, a former Premier League chairman. Richards had close links to Leicesters Thai owners (his Thai football contacts also include having become acquainted with the countrys ousted prime minister, Thaksin Shinawatra, who became Manchester Citys owner in 2007).
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