Leicester City have reported a loss of £89.7m for the 2022-23 season – taking total losses for their last three Premier League campaigns to over £215m.
Top-flight rules permit clubs to lose £105m over a rolling three-year period.
It comes despite the Foxes, who were relegated at the end of last season, making a £74.8m profit in player sales.
In the accounts, the club describe relegation as a “disappointing and unanticipated decline”, having finished eighth, fifth and fifth in the Premier League in the previous three seasons.
The Championship club’s chief executive Susan Whelan said: “After a sustained period of growth and success for the club during the last decade, the 2022-23 season was a significant setback, the consequences of which will be felt for some time.
“We must now focus on rebuilding and seeking to return to and re-establishing ourselves in the Premier League.
“Having achieved finishing positions in the Premier League of fifth, fifth and eighth in the three preceding seasons, our targets and associated budgets for 2022-23 were entirely reasonable.
“However, for a club such as ours, whose sustained sporting achievements have justified the levels of investment required to compete with the most established clubs and pursue our ambition, a season of such significant under-performance on the pitch presents financial challenges, particularly from the perspective of the game’s current Profitability and Sustainability rules.”
The Foxes raised about £70m by selling French centre-back Wesley Fofana to Chelsea in August 2022 and England midfielder James Maddison completed a £40m move to Tottenham last summer.
But those figures were offset by the sacking of Brendan Rodgers and his coaching staff, including assistant manager Chris Davies, in April 2023, and a lower-than-budgeted league position.
The accounts do not mention exactly how much it cost to dismiss Rodgers, but costs of sales increased by £26m to £301.8m, which the club partly attributes to a change of manager.
Rodgers voiced his frustration at the Foxes’ inability to spend in the 2022 summer transfer window. At the start of the season he predicted Leicester would struggle and needed to target 40 points to survive – they finished 18th and were relegated with 34 points.
Turnover decreased to £177.3m – down from £214.6m the previous year – but chairman Aiyawatt Srivaddhanaprabha cleared the club’s outstanding £194m debt to parent company King Power International last February.
The Foxes owed the amount in loans to KPI, which is owned by the Srivaddhanaprabha family, but a debt-to-equity transfer was completed.
“The long-term and ongoing financial security and commitment provided by Khun Aiyawatt, the Srivaddhanaprabha family and King Power International, enables the club to rebuild with certainty and confidence,” added Whelan.
The release of Leicester’s accounts comes 12 days after they were charged by the Premier League for alleged PSR breaches and for failing to submit audited finances.
Leicester will have “add backs”, which include spending on its women’s team and the academy, which will bring their losses down in the Premier League’s calculations, while they are reporting for 13 months rather than 12.
This was a long-term club decision to bring Leicester’s accounting in line with the rest of the business.
The £215.3m loss over three years includes a £33.1m pre-tax loss from the 2020-21 season, in which they lifted the FA Cup, and the club-record loss of £92.5m a year later.
If found guilty of breaking spending rules, which allow clubs to average losses of £35m per season in the Premier League, Leicester could face a points deduction.
As the case, including any appeals, is likely to run beyond the end of this season, it means any potential sanctions will be enforced next season.
Top-flight sides Everton and Nottingham Forest have already been punished with points deductions this season for breaking rules.
Leicester are also the subject of a separate financial probe by the English Football League (EFL), who followed up the Premier League charge by imposing a registration embargo on the East Midlands club.
The Foxes reacted by starting legal proceedings against both the EFL and Premier League.
A jaw-dropping amount to lose – Analysis
Owynn Palmer-Atkin, BBC Radio Leicester
Leicester City have put the £89.7m loss down to three key issues.
First was the drop in Premier League prize money – as the club fell from eighth to 18th in the space of 12 months. That drop-off resulted in the club’s relegation from the top flight, but also a reduction of about £30-35m in prize money revenue.
Secondly, there is the lack of European football after the club failed to qualify the previous season.
And thirdly there is a clear message on the significant and “costly” price to move Brendan Rodgers and his backroom staff out of the club, exactly a year ago today.
This is a jaw-dropping amount of cash for a football club to lose. It is the result of Leicester trying to bridge the gap to the Premier League’s top six – and failing in their recruitment of personnel and performances on the pitch.
What is perhaps most significant is the amount of money clearly being spent on wages. Despite a near £75m profit in player trading, the club still finds itself the best part of £90m in the red.
Leicester have become known as a club that hands out generous contracts and looks after players and their agents.
But here we see how badly it has affected the financial state of the club – with a huge wage bill resulting in relegation, rather than pushing them on.