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Football Foxes set for financial big-time?

Leicester City have been crowned Premier League champion in a fairy tale season for the Foxes – their first ever top division title, but what will this mean financially?

In Deloitte's Football Money League 2016 Leicester made their debut in the list – at 24 of the 30 teams listed, despite flirting with relegation for most of the season. By the time the 2017 list is published in January next year they will have increased their revenue significantly and are likely to break into the top 20 at the expense of English rivals Newcastle and Everton.

Other teams looking to move up in the list are West Ham, whose move to the Olympic Stadium and qualification for the Europa League will increase their match day revenue and Liverpool who open their new main stand. However, failure to qualify for the Champions League, after defeat in Basle, will hit the Reds hard.

Leicester's revenue could increase by more than £60m – their prize money for winning the Premier League would be around £91m – an increase on the £71.6m their number 14 ranking earned them last season. Then there's the Champions League qualification, worth around £40m. All this is without the club’s share of a bumper £5.136bn television deal for 2016-2019 which is likely to be somewhere between £99m and £156m.

Match day revenue is unlikely to increase greatly in the short term as average attendances at the King Power Stadium already approach the 32,312, capacity. But the Vice Chairman has announced plans to increase beyond its existing 32,243 seats which could increase match day revenue, assuming crowds are maintained.

There is however one cloud in the sky for Leicester. Their 2013/14 accounts are being investigated by the Football League ‘amid strong concerns from other clubs they may have cheated financial fair play rules’.

One thing is certain, the increased wealth in the game's top division will also lead to increase in players' wages. HMRC has guidance for the Tax treatment of Association Footballers.

BDO's Annual Survey of Football Finance Directors, published in August, ‘provides a unique insight into the issues affecting football clubs on and off the pitch’ and reveals that 38% of finance directors would be happy to reduce ticket prices in response to the new TV deal.

Also see the new edition (June 2016) of Deloitte's Annual Review of Football Finance and Tony Evans' article in Economia in September 2014: NFL v EPL: A league of their own.

And if you'd like to know even more take a look at the Library’s help on accounting for football clubs and its business guide to the sports industry.