On May 2nd, Leicester City Football Club did the impossible. They won the much coveted and highly anticipated footballing league in the world, the English Premier League thereby achieving a sporting feat that no team has accomplished since Nottingham Forest won the league in 1978.
After almost being relegated in the 2014-2015 season, bookies placed odds of a 5000-1 chance of Leicester winning the league. In spite of securing a new manager in the form of the tinker man, Claudio Ranieri; the Thai billionaires had only one wish from the manager, to avoid relegation.
In other words, you would have been mad to put even a penny in Leicester winning the leave as no one, not even the team, would have anticipated what was to come in the months that followed.
There were higher odds on David Cameron being the next Aston Villa manager than Leicester winning the league.
Leicester’s run up to the top-4 and thereafter, at the top of the league, attracted attention from millions of sporting fans worldwide, most of who wouldn’t have even heard of Leicester. However, all said and done with Leicester lifting the crown on the May 7th, what effect is their victory likely to have on the club and the national economy?
On the club:
According to CNN, the football club alone is likely to earn well over £150 million, which includes a winning prize of £90 million coupled with broadcast and commercial bonuses and this is expected to go up to £100 million next season as defending champions, through new broadcast deals and a rise in brand value.
These estimates exclude the growth in fan base and other merchandising revenues.
To add to that feat, it is estimated that Leicester will earn £50 million next season solely from their Champions League participation and other sponsorship and commercial deals, even if they fail to go through the group stages.
In total, analysts predict the club to earn a total of £250m by the end of next season even if they fail to have as spectacular a year as this year.
On the local economy:
Leicester’s win is a win for the local businesses of Leicester.
The achievement has put the city of Leicester on the map and is likely to attract a wide array of international and national visitors, particularly through qualification in the Champions League.
It is believed that the city’s businesses could grow at twice the national average on the back of this historic win, previously recording a growth of 3% in previous years and expected to grow at 7% this year.
BBC has claimed that Leicester’s triumph in the Premier League is worth £17 million to city for every year they are in the league and the current win in the Premier League is likely to boost local revenues by £5-7 million which comes through increased hotel bookings through tourism, transportation as well revenues through food and drink. This figure however, is likely to only go north, depending on how Leicester fares in the much anticipated sporting event, the UEFA Champions League.
Do not be surprised if a few bookies go out of business. The horribly timed odds they have placed on Leicester City have come back to haunt them as the season comes to an end.
Bookmakers are likely to lose out on £25 million, with the highest pay-out going to a lucky individual worth £200,000.
Bookies all over the world placed higher odds on discovering the Loch Ness monster (500-1) or finding Elvis Presley alive (2000-1) than on Leicester City FC winning the league at (5000-1).
Bookies such as William Hill have guaranteed that no odds will be placed next year above 1000-1. Lesson learnt!
Leicester City FC’s win in the league puts a shame to the other clubs that invest millions of pounds a year to develop their squad and facilities however, with so much capital at Leicester’s disposal now, the pressure is on them to produce a similar performance next season.
However, having achieved an unprecedented win this season, Leicester’s real commercial potential will become clearer as the year progresses and the city will need to find ways to efficiently use the capital generated from winning the Premier League.