The story of Leicester City’s improbable rise to the top of global soccer’s wealthiest league starts with the restless ghost of an English monarch. The bones of King Richard III had been missing for centuries, only to be discovered in 2012 not far from the Foxes’ stadium.
The day the remains were properly interred at Leicester Cathedral last March, the team was in last place in the English Premier League and in danger of relegation. In its next game, the club began a stunning comeback, sparked by a late goal from by a player named, appropriately, King.
A coincidence, surely. Then again, there’s no rational explanation for the soccer team’s ascent. On what passes for a shoestring budget in England's top division, Leicester has won 25 out of its last 39 and is on pace for its first top division title and a place in the Champions League.
The success has enriched its owners -- the club is now worth an estimated eight times what Thai duty-free billionaire Vichai Srivaddhanaprabha paid for it six years ago. It has also bedeviled the big spenders that typically top the standings and challenged the long-held belief that, in the Premier League, the more you pay, the more you win.
“It is worth more than I received,” said Milan Mandaric, who sold the team to Srivaddhanaprabha in 2010 for 40 million pounds -- or about $56 million or 51 million euros at today’s exchange rates.
Mandaric, a seasoned soccer investor who flipped clubs Portsmouth and Sheffield Wednesday, said the team could be valued at 300 million pounds. That would make it one of the top 20 clubs in the world, according to Forbes. “And they deserve it,” he said.
To be fair, all Premier League teams receive a share of the league’s generous broadcast deal. By holding on to its spot in England’s top league -- which the Foxes did by winning a stunning seven of nine games at the end of last season -- Leicester continues to enjoy those spoils. After its 14th-place finish last year, the team generated 104 million pounds in revenue, including about 72 million from the league’s broadcast money, and turned a profit of 26 million, its first in almost a decade.
If the team wins the league this year, it can expect an even larger share. Last year’s winner, Chelsea, got around 99 million pounds. Official numbers won’t be available for a year, but it’s reasonable to assume that Leicester’s overall revenue will rise by 30 percent.
Next year, it’ll go up again. If the Foxes finish this year in the top four, they will play in European soccer’s elite Champions League, which will bring in at least 25 million pounds. They will also share in the Premier League’s record three-year, 8 billion pound broadcast deal, and the better they do, the more they’ll get. The league’s last-place club will get around 100 million pounds, with incremental bonuses based on the standings.
Meanwhile, Leicester’s payroll has stayed modest. The Foxes, until this year a group of journeymen and relative unknowns, earn peanuts compared to the league’s stars. Last year, Leicester paid its whole squad 57.4 million pounds, roughly one-quarter of what Chelsea paid en route to its 2015 title.
Jamie Vardy, a 29-year-old former bricklayer who has become the team’s top scorer, was purchased in 2012 for 1 million pounds. Forward Riyad Mahrez, now a contender for player of the season, was signed in January 2014 for 400,000 pounds. When the team beat well-funded Manchester City 3-1 in February, its starting lineup cost less than Man City spent on individual transfer fees for six of its starters.
Leicester’s unlikely stars are the club’s greatest assets off the field as well, and their values are rising. Vardy recently signed a three-year, 4 million pound contract extension, but on the global transfer market, Vardy or Mahrez could be sold for as much as 30 million pounds, according to U.K. newspaper reports, money that would go to Leicester’s bottom line.
This success has led to some uncomfortable questions for executives at top clubs. Manchester United, which is publicly held, has spent 250 million pounds on new players over the last two seasons with little to show for it. When the team released its latest quarterly results in February, Matthew Walker, an analyst from Nomura Holdings, wanted to know why.
“The Leicester squad has been assembled for about the cost of 22 million pounds,” Walker asked on the earnings call. “When you head into the transfer window in the summer, can you explain why … the bigger clubs can’t find relatively cheap players like Leicester?”
Even Foxes faithful might profit from the team’s unprecedented run. London-based Ladbrokes PLC gave fans 5,000-to-1 odds on Leicester to win its first ever top division title before the season started. At least one cashed in early, turning his 50-pound bet into a 72,000-pound payout earlier this month. Today, the same bookmaker has Leicester a favorite at 4-5.
"What we are witnessing, should Leicester go on to win the title, is quite possibly the most unlikely triumph in the history of team sport," Gary Lineker, a former captain of England’s national team, wrote in the Guardian earlier this month. Now a broadcaster, Lineker has said he’ll open next season in his underwear if the Foxes win the league.
Eight games remain in the season, with the team traveling to Crystal Palace on Saturday.