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Leicester City's £194m debt written off by King Power | 'Shows commitment after criticism'

Leicester City's owners have written off £194m that they'd loaned to the football club over the last 10 years; there is now no debt to Leicester's owners; it shows King Power are in it at Leicester for the long haul, and it shows the club is, financially, in very rude health

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Sky Sports News' Rob Dorsett explains why Leicester City chairman Aiyawatt Srivaddhanaprabha has relieved the club of £194 million worth of debt to parent company King Power.

In layman's terms, Leicester's owners have written off £194m that they'd loaned to the football club, in various sized chunks, over the last 10 years, and said "we don't expect you to pay that back, LCFC".

It's a big statement of commitment from the Srivaddhanaprabha family.

Many football clubs in England have significant debt that is owed to the club owners, and that debt tends to get paid off when the club is sold on.

Here, in Leicester's case, there is now no debt to the owners.

It would be wrong to say that Leicester is now "debt free" because it does have various loans with banks elsewhere in the business, I understand.

But I have been told those debts are tiny, compared with the £194m of cash that Khun Top has now gifted the club.

Aiyawatt Srivaddhanaprabha appointed Brendan Rodgers
Image: Aiyawatt Srivaddhanaprabha with Leicester boss Brendan Rodgers

Also, because the sum has been drip-fed into the club over the past decade, for accounting purposes and under Premier League rules, I've been told it is not deemed as an outside cash injection that could be in contradiction with Financial Fair Play.

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Aiyawatt's father, Vichai, did a similar thing in 2013, before Leicester won the Premier League title in 2016, and then Khun Vichai tragically died in a helicopter crash outside the stadium two years later.

Crucially, after a difficult time where Leicester's board have faced criticism from some fans for a lack of investment in the playing squad, this is a huge show of commitment for the future.

If King Power were planning to sell the club at any point in the medium term, it would not make financial sense to do this.

Vichai Srivaddhanaprabha bankrolled Leicester's rise to Premier League champions
Image: Aiyawatt's father, VVichai Srivaddhanaprabha, tragically died in a helicopter crash outside the King Power in 2018

While fans shouldn't expect a huge splurge on new players now, the gift does help with Leicester's Financial Fair Play situation, because there are no interest payments to be paid on the debt.

It doesn't mean Brendan Rodgers suddenly has £200m to spend on players.

Leicester and King Power have always been adamant they would have a stable, well-run club. That doesn't mean a lack of ambition - they've won the Premier League and FA Cup in the last seven years.

But there are some who've questioned the Leicester model - how can a club thrive on the pitch, if it is selling the likes of Riyad Mahrez, Harry Maguire, N'golo Kante, Wesley Fofana - world-class players that Leicester have let go to bigger clubs?

Leicester's owners are pragmatic - they know they can't compete with Manchester United, Manchester City, Liverpool and Chelsea off the pitch.

Their commercial power is unparalleled in the vast majority of global club football.

Rodgers has a strong relationship with Leicester owner Aiyawatt Srivaddhanaprabha
Image: Brendan Rodgers with Leicester owner Aiyawatt Srivaddhanaprabha after the club's FA Cup triumph in 2021

But Leicester have a plan to grow the club commercially, to increase revenues as much as possible, so that more and more money can be invested in the playing squad in the future, without breaking FFP rules.

A prime example is the £100m new training ground at Seagrave, which many feel is unrivalled in the Premier League.

There are also plans for a new hotel, entertainment venue, for expanding the capacity at King Power stadium - all with the goal of increasing commercial revenue, so that Leicester might be better able to compete with the big boys in the future.

This £194m gift is a really significant indicator of that long-term plan at Leicester.

The Srivaddhanaprabha family saying, "We don't expect you to pay back this £200m loan that we've given you" is a huge show of commitment.

It shows King Power are in it at Leicester for the long haul, and it shows the club is, financially, in very rude health.

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