Leicester City: £30 million record losses blamed on soaring wage bill
Leicester City made a record loss of nearly £30 million during last season's failed push for promotion, it was revealed today.
The deficit was nearly double the previous record loss of £15.2 million in 2010/11.
However, the Thai owners assured fans they are as committed as ever to getting the club into the Premier League.
They blamed the huge loss on a soaring wage bill built up during Sven-Goran Eriksson's reign as manager. The £29.7 million loss – one of the biggest ever reported by a Championship club – was racked up in the year to May 31, 2012.
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It has been covered by the owners, who pumped in £36 million last season.
Their commitment to the club was also highlighted yesterday when it was announced they had bought the King Power Stadium from American pension fund manager Teachers Insurance in a £17 million deal. Chief executive Susan Whelan said: "The fans should not be concerned. This loss has been funded. The owners are committed to the club."
Salaries rocketed to £27.7 million in 2011/12 from £16.6 million the previous season.
High-wage earners, such as Matt Mills and Sol Bamba, brought in by Eriksson, have since left the club, while Jermaine Beckford is on loan to Huddersfield until the end of the season.
Eriksson was sacked by the club in October, 2011, after serving just over a year as manager. The club reported turnover increased by 23 per cent to £21.4 million in 2011/12, helped by a rise in money from sponsorship, executive suites and advertising, which climbed from £3million to £5.5 million.
Income from match tickets fell slightly, from £6.02 million to £5.87million, while cash from retailing and merchandise rose from £1.37 million to £1.45 million.
Ms Whelan said she was not yet able to give an indication of this season's financial performance.
Promotion would bring City a windfall of more than £100 million. However, the club is prepared financially for another season in the Championship, she said.
The club's debt rose from £46 million to £85.4 million, mainly as a result of the £29.7 million loss.
The remaining £9.3 million is regarded as a debt, but not a loss, because it was an investment in the club, either in transfer fees for players or in club facilities.
The club's chairman, Vichai Srivaddhanaprabha, owner of Thai duty-free business King Power Group, took over the club in 2010 after a £39 million deal with previous owner Milan Mandaric. He has given the club loans totalling £61.6 million since he took control, but hopes to eventually convert these loans into shares in an arrangement similar to what has been seen at Chelsea and Manchester City.
"My vision is for Leicester City to take its place as a highly respected and successful Premier League club," said Mr Srivaddhanaprabha.
"As a club, we should centre around the lives of the fans and the community of Leicester. We will hold the club's heritage in trust, and develop the club to ensure sustainability for future generations.
"My commitment to Leicester City has been gratifyingly reciprocated by the club's loyal fans and partners, whose support continues to be valuable in helping the club achieve its long-term objectives."
Mr Srivaddhanaprabha changed his surname from Raksriaksorn, last month after being granted a royal honour by the King of Thailand.