Leicester City on brink of financial armageddon after huge parachute payments revelation: report

While some fans booed, and others chanted “you’re not fit to wear the shirt”, there were plenty at the King Power Stadium on Tuesday standing in stunned silence.

With a 2-2 draw against Hull City, Leicester City’s relegation from the Championship to League One was confirmed.

A decade on from their miraculous Premier League title triumph, the Foxes will play in the third tier for just the second time in their history.

Leicester to miss out on parachute payment

And, given Leicester were until recently an established top-flight club, paying big wages and investing heavily in their squad, their plummet to League One could have significant financial repercussions.

According to football finance expert Kieran Maguire, Leicester cashed in their remaining Premier League parachute payments in January by borrowing from a bank against the future income.

As a result, the club will only receive £2m in cash in broadcast money next season.

Maguire added that Leicester have borrowed a net total of £85m in the last two seasons, and had a wage bill of over £100m when they won the Championship in 2023/24.

By the end of 2024/25, the club had made an accumulated loss of £375m, which led to their six-point deduction this season.

There will be huge concern around Leicester’s financial situation as they drop to League One, with plenty of big earners still on the books.

Whether the club will be able to move on the highest-paid players and adequately cut costs remains to be seen.

It is a dire situation for a club that enjoyed the best few years of their history in the last decade, reaching the Champions League quarter-finals and winning the FA Cup after that unlikely Premier League title.

Leicester will now play against Bromley, a non-league side for most of their existence, in the third tier.

The hope will be that the Foxes, as they did in 2008/09, bounce back immediately with promotion, but given their financial woes and the catastrophic performances of this season, that is certainly not a guarantee.

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