OPINION: How long can owners keep bankrolling Leicester City?
A Leicester City-supporting friend said he feels the revelation that the club made a record £29.7 million loss last season is "meaningless", writes Business Editor Ian Griffin.
Although I disagree with him wholeheartedly, I can kind of see where he is coming from.
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deep pockets: Leicester City owner Vichai Srivaddhanaprabha and his son Aiyawatt
As long as the Thai owners keep bankrolling the club's push for promotion to the Premier League there's no problem.
However, the question on the minds of many City fans when huge losses like this are reported is how long the owners will stand by the club.
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The question becomes even more relevant when failure to win promotion to the top flight begins to look a possibility.
Last week's news the Thai businessmen had bought the King Power Stadium from pension fund manager Teachers Insurance in a £17 million deal certainly shows their intentions. The owners say it is something they had always planned to do.
It's likely they decided to announce the deal just before the huge deficit was revealed to emphasise their commitment to the club.
It certainly helps to ease the anxiety of City fans like myself when faced with the club's latest annual accounts.
Two figures which come from those documents jump out: the £75 million the owners are now owed after they provided a number of loans. This has increased by £50 million in the past 18 months. The other big figure is the net debt of £85.4 million sitting in the accounts, an increase of £39 million from the previous season.
The situation will become a lot less of a concern, of course, if the club gain promotion to the Premier League and secure a windfall estimated to be worth up to £150 million.
Last season's huge loss, which was revealed on Saturday and is believed to be the largest ever made by a Championship club, is being blamed on a huge players' wage bill built up during Sven-Goran Eriksson's time as manager.
Some of the big wage-earners have since left the club, but it's unclear how much the losses will be reduced this season.
Yes, the owners have shown their commitment and are likely to stick around for years to come.
But surely there comes a point when they either no longer want to put any more money into the club, or are financially unable to.
Forbes magazine suggests club chairman Vichai Srivaddhanaprabha is worth about £160 million. On that measure, he's already pumped just under half of his wealth into the club.
Whether or not he and his son Aiyawatt look for investment from a third party remains to be seen. That could all depend on the club's performance during the rest of this season.
Comments
by Eastonian
Monday, April 29 2013, 9:29AM
“This is exactly why Premiership status is so important to this family. At some point in the future if promotion doesn't come about no doubt they will decide to cut their losses and go but whether that is a year or 3 years down the line only they know.
It may well be they have "deep pockets" but at the end of the day it's not a bottomless pit!!
It goes without saying the loyal supporters have always wanted to be back in the Premiership from the day we were relegated. Whether we have the manager to inspire and motivate our players is open to great debate, personally, I don't think we have.”