Finally free from the constraints of Profit and Sustainability Rules, Leicester City’s 2025-26 Championship campaign begins with a sense of financial freedom.
Relegated from the Premier League at the end of a miserable 2024-25 season, the Foxes are now aiming for an immediate bounce back to the top flight.
While the complete 2024-25 accounts are still under wraps, whispers suggest Leicester are in a significantly better financial position compared to previous Premier League years, where substantial losses led to PSR concerns.
However, this newfound financial breathing room does not mean a spending spree is incoming, especially with the threat of a potential points deduction for alleged past PSR breaches.
To understand the true picture of their summer strategy, we turn to our finance expert, Adam Williams, for his predicted financial forecast as Leicester City prepare for life back in the Championship.
Photo by DARREN STAPLES/AFP via Getty Images
Photo by DARREN STAPLES/AFP via Getty Images
Leicester City’s predicted budget for the upcoming season
In an EFL Analysis exclusive, we take a look at how PSR restraints will impact Leicester in 2025/26, as well as player sales and commercial losses, to come up with a rough budget the Foxes can use this summer.
Williams said: “2025-26 will be the first season for a while that Leicester are not under major PSR pressure. We do not have the accounts for 2024-25 yet, but we can deduce that the losses won’t be as heavy as previous seasons.
“Looking at their signings and the wage profile of players they brought in for 2024-25, they have not bet the farm on staying up necessarily.
“In 2023-24, their losses were a relatively modest £19m. If you add back PSR-exempt expenses, that probably swings to about minus £10m.
“They did make a net profit on player sales in cash terms of about £50m that season, compared to negative £36m this season, so that’s one discrepancy with trying to work out 2024-25’s figures, along with the wage bill rising after promotion. Amortisation, which is how clubs account for transfer fees paid over some time, will be somewhere around £60m.
“But I would suggest they will maybe make £175m in revenue. Because the new signings they made are amortised over five years whereas profit on the sales is booked immediately, as well as the fact that Kiernan Dewsbury-Hall was a ‘pure profit’ sale for PSR purposes, I reckon a loss of £30-40m sounds about right. Add back PSR-allowable expenditure and let us say it is £30m.”
So, what does that mean in simpler terms? Well, Leicester may need more money to come in before they spend, but that’s unlikely to come from those at the top.
Williams added: “They are at negative £40m and they will be allowed to lose up to £61m. I think player sales are inevitable and the transfer budget itself will depend on how strong they go in that department. Whatever they spend, I suspect they will have to earn first.
“I do not think the owners will want to put money in externally and it would not make business or PSR sense to do so.”
Photo by Jon Hobley | MI News/NurPhoto via Getty Images
Photo by Jon Hobley | MI News/NurPhoto via Getty Images
Leicester’s transfer business could be carried out by a new manager
Amid speculation about Leicester City’s summer spending, a significant managerial change is also on the horizon.
EFL Analysis exclusively revealed earlier this week that Russell Martin is the frontrunner to become their new manager, seemingly ending Ruud van Nistelrooy’s chances of staying put.
The 39-year-old, out of work since his Southampton departure in December, has shared his readiness to return to management.
Despite facing a potential points deduction due to alleged PSR breaches, Leicester are expected to be Championship promotion contenders. In addition, we were told last week that the Foxes shouldn’t be forced into player sales despite those past financial issues.
EFL Analysis’ Chief Football Correspondent Graeme Bailey has further revealed that Martin has agreed a deal in principle with the club. Martin’s desire for a full pre-season with his new team seems to have been accommodated by Leicester.
However, news of this potential appointment has been met with uneasiness from some Foxes supporters, who feel there are better options available.
While Van Nistelrooy’s exit awaits official confirmation, Martin’s arrival appears to be a matter of time.