Leicester have posted losses of £89.7 million for the season with losses over the past two seasons combined standing at £182 million. Accounts however do not fully break down the Profitability and Sustainability add-backs such as investment into youth development, women’s football and community schemes.

City did make a £74.8 million profit on player sales, including the exits of Wesley Fofana and James Maddison to Chelsea and Tottenham respectively.

The club’s wage expenditure stood at £206 million, more than their £177 million revenue. That expenditure was the eighth highest in the Premier League last season.

READ MORE: Leicester City post £90m loss in 2022/23 accounts and make huge FFP admission

READ MORE: Leicester City financial accounts LIVE – £90m loss recorded, PSR worry, FFP admission, what it means

Describing their relegation as a “disappointing and unanticipated decline”, City said their budgeting was “based on reasonable expectations given the previous sporting performance”.

After the club announced the loss, football finance expert Kieran Maguire admitted he was ‘taken aback’ from the significant loss. “Like many people, I was taken aback,” he told the ‘When You’re Smiling’ podcast.

“I knew it wasn’t going to be a great year but the fact that the club had to extend its financial year to 13 months to squeeze in sales and reduce the losses to just £90m was indicative of what a challenge it was. We knew the revenue would be down but I was amazed that the wage bill went up so high.

“For the first time in my knowledge in the Premier League, they were paying more out in wages than was coming in through the door – in a non-Covid year. The only time that’s happened in Premier League history. A brutal set of numbers.

“What Leicester City have done is, following the success of winning the Premier League in 2016, they went through a period of spending £100m or more in recruiting talent. That stepped down in 2020/21, partially due to Covid, but the investment in new talent in 22/23 was just £53m. That’s the lowest since the first season back in the Premier League.

“It doesn’t look great. There’s a catch-up of all the spending, some of which has worked and some haven’t. The club had budgeted to finish in the top half of the Premier League and it didn’t. The money from TV was down by about £35m. The club wasn’t competing in Europe, that had an impact as well. All these individual things, collectively, led to a poor season on the pitch and financial results.”

He continued: “It’s all to do with wages. The wage bill has more than doubled from when the club won the Premier League in 2016. That’s simply not sustainable.

“Who are we benchmarking Leicester City against? They would have been perceived at the start of the 22/23 season as the ‘Waitrose’ of the Premier League with the likes of Aston Villa, Newcastle and West Ham, but their wage bill is considerably higher than those clubs.

“That’s come back to bite them in terms of struggling to get players off the payroll because nobody else is willing to match those wages or when the players have left, [they] have had to take a financial hit. If you take a look at the players who did leave, they originally cost the club £191m and the club generated £104m from those sales.

“It does show the changes were considerable. At the end of 2022, Leicester had a squad which cost more than £400m. By the end of 2023, the cost of the squad, in terms of the investment in playing talent, was down to £260m.”