THE IMPACT OF LEICESTER CITY FOOTBALL
CLUB ON LEICESTER
August 2016
Introduction
Leicester is one of the premier locations for sports in England, with significant club representation
in premier league football, premiership rugby, cricket, and elite clubs in basketball, speedway,
netball, hockey and badminton. These activities, combined with major motor racing at
Donnington Park and Mallory Park, and horse racing at Leicester racecourse all contribute to a
thriving sports and physical activity sector in Leicestershire, which when combined with wider
outdoor pursuit and diving centres, specialist training institutes and sports-based manufacturing
generate around £285m each year (GVA). Internationally, sport and physical activity is growing
and Leicester City FC’s Premier League success is expected to make a big impact on the local
economy. The socio-economic impact of sport in the city and region, which already has one of the
highest consumer expenditure profiles on sport clothing and footwear, sport participation, and
sport gambling, is forecast to grow with the pride of local fans being high. When sporting events
create a feel good factor, as has been the case with Leicester City FC, fans spend1, and although
this may be a temporary spike with longer term growth coming from new infrastructure and new
investment interest, the impacts are significant enough to spur regeneration in the city.
This link between sporting events and economic competitiveness of an area through a
combination of one-off investments, positive place marketing, visitor appeal, and longer term
regeneration has now been widely acknowledged. As a result, there has been a favourable shift in
European and North American attitudes towards the use of sporting events and sports in general
as a tool for boosting local economies and for tackling economic decline. The 2013-14 Premier
League season alone generated £6.2bn of economic output to the UK economy, supporting
100,000 jobs2 and wider research reveals that the sector (spectator sports and sports
consumption) is expanding at around 6-7 per cent per year, making it of particular interest in the
UK and to local economies rich in sports activities.
Whilst early attempts to harness regeneration from sports, such as Sheffield’s use of the Student
World Games (Universiade) in 1991 was seen as disastrous, creating £658m of immediate debt, its
investments in sporting infrastructure for the event was notable in generating multi-million
pound returns long after the event’s lifetime3. In this sense, Sheffield has acted an important
demonstrator in the UK, which paved the way for substantial investments in Manchester
(£670m), Glasgow (£600m), and London (£701m) for the 2002 and 2014 Commonwealth Games,
and the 2012 Summer Olympics, and boosted by one-off cash injections as visitors came to,
stayed, and spent in those cities. Whilst the investment in stadia and other transport projects can
yield the same impact as other types of public investment in capital projects, visitor spend can
make-or-break an event and by extension a city, by producing waves of spending that last for
years, through a process of direct, indirect, and induced multiplier impacts.
1
Brady, C. (2015) Economic Impact of Sporting Events. Centre for Sports Business, Salford University with
Sheffield Hallam University
2 Ernst and Young (2015) The premier League Economic Impact Analysis. London
3
Davies, L. (2002/7) Sport in the City: measuring economic significance at the local level, European Sport
Management Quarterly 2(2), pp83-112
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Direct impacts refer to the direct or initial spending on an event, or the direct spend
associated with participating in it.
Indirect multiplier impacts refer to the indirect business-to-business spending that occurs
as initial spending is passed through the supply chain and firms use income to buy goods
and services from other businesses.
Induced multiplier impacts refer to the effects from increased household spending on
consumer goods and services from those employed by sporting events or projects.
Sports-based Impacts and Leicester City Football Club
The issue of whether the performance of a local sports team, as opposed to the hosting of a
major sporting event, can produce the same scale of impacts for a city as mega events is more
difficult to determine. Whilst some research has revealed that local wins especially in football can
enhance economic performance by producing abnormal patterns of investment in stock
exchanges4, the approach is far from being universally accepted, whilst case studies in North
America (e.g. the Super Bowl) are too large to act as suitable comparators.
Against this backdrop, one might usefully analyse the economic impact to Leicester and the
surrounding city-region through assessment of different levels of expenditure associated with the
football club and match fixtures:
1. Direct expenditure by the sports event organiser – in this case, the income generated to
the football club from increased television exposure through so-called ‘TV Rights’ and
through securing a place in the European UEFA Champions League.
2. Capital expenditure incurred for premier league live events as the season progressed, and
for one-off celebratory events connected to the Premier League win.
3. Ancillary expenditure by those attending live sporting fixtures, and participating in live
events.
Assessment of the impact of this expenditure is undertaken in two principal ways:
Type I Impacts refer to the direct and indirect effects of an event or specific activity. It estimates
the impact on the supply chain from direct expenditure plus the impact on the supply chain from
producers responding to an increase in demand for goods and services along the supply chain.
Type II Impacts cover the induced effects as increased local wages from an event begin to take
hold and lead to further consumption in a local economy, producing further demand along the
supply chain. Type II calculations require robust and reliable employment data, making
calculations at lower spatial levels such as Leicester difficult. To this one might dispute the implicit
4
Benkraiem, R., Louhici, W. and Marques, P. (2009) Market Reaction to Sporting Results: The case of European
listed football clubs, in Management Decision 47(1), pp100-109; Smith, B.K. and Krige, J.D. (2010) Evaluating The
Economic Impact of National Sporting Performance: Evidence from the Johannesburg Stock Exchange,
Stellenbosch University
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link between increased wages from a one-off event and changes in final consumption – in other
words, it is debateable whether local employees will change medium-term consumption
behaviour from a one-off football win. As a result, the most reliable approach for measuring the
impact of Leicester City FC on the City of Leicester is to calculate Type I impacts from identifiable
expenditure connected to match-day events and post-win celebrations and to consider the
trajectory of broader Type II impacts.
Economic Impact of the Football Win
Looking first at the economic impact from direct expenditure.
Ticket sales – an additional £224,000
Attendance at football fixtures increased to full capacity in the second half of the 2015-16 football
season, and although Leicester City FC has one of the highest stadium attendance records (at
98%) for the last five seasons, this equates to a further 6,400 ticket sales or £224,000 at 8 home
fixtures after February 2016 .
Increased Sale of Merchandise – an additional £2.710m
During 2014-15 Leicester City FC sold £2m of official merchandise through its retail arm and
secured £0.9m on match days through catering5. Operating at full capacity on match days during
the 2015-16 season brought in an additional estimated £60,000 (merchandise and catering),
whilst the increase in local fans purchasing unofficial merchandise and memorabilia from the
street and from online marketplaces, and those buying the new 2016-17 home strips with gold
embellishments from June onwards has been estimated at £2.650m. One online company alone
sold more than 5,000 unofficial Leicester flags retailing at £2.99, and whilst supporters turned up
in their thousands to the Stadium on 6th May to purchase new strips, it could be estimated that
this resulted in only 20% additional sales in official merchandise given that fans would have
purchased a new kit anyway irrespective of the club’s win (i.e. deadweight).
Hospitality Sales – an additional £22.6m
On match days, Leicester tends to witness reduced footfall in the main shopping areas of the city
centre as shoppers are displaced to nearby locations or to the football stadium. The precise
displacement of economic activity is difficult to ascertain given that the city is currently
experiencing unusually high visitor levels as a result of the 2015 re-interment of Richard III, with
knock-on effects for take-up of local hotels and restaurants. However, whilst footfall in the centre
of the city is reduced by home fixtures, it is also true that the hospitality sector along the High
Street and Lanes areas of the city, along with Narborough Road experiences very high footfall and
sales during match days estimated to be £7-8m annually over 18 home fixtures6. Above-average
footfall in the second half of the 2015-16 season as local fans looked to experience at first hand
5
Accounts of Leicester City Football Club Ltd for the year to 31 May 2015
Sport England (2015) Economic Value of Sport Local Model - calculates that annual spending by people
attending sports events in Leicestershire (i.e. on accommodation, transport, food and drink etc.) is £36m of
which approximately £17m is generated for Leicester City FC matches.
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4
the ‘buzz’ on the streets and to participate in the one-off carnival atmosphere increased sales by
as much as 300 per cent in some parts of the city centre over 5 key matches. Additional spend in
hospitality sectors in Leicester as the Club continued to lead the Premier League as it reached its
2015-16 season conclusion is estimated to be £3m (over 5 final home matches).
In terms of the 2016-17 season, it has been suggested that average football fans spend £855 per
visit when watching their team play overseas and £785 for national league matches7 (excluding
match tickets and spend in the ground) meaning that European fans visiting Leicester during the
2016-17 EUFA Champions League could bring a further £5m into the local economy through
spend on food and drink, accommodation, and local transport, whilst an increase in spectators for
spectators for Premier league fixtures could yield an additional £5.6m (based on 7,000 additional
ticket sales for visitors and average spend of £785).
Leicester City FC Commercial Income – an additional £208m (estimate)
Leicester City FC is currently positioned at 26 in Deloitte’s annual Football Money League8 and its
annual turnover (£104m in 2014-15) is joint 12th in the national league, although its increase in
turnover of £73m between 2014-15 and 2015-16 reflects an increasing commercial outlook for
the club. An estimate for commercial income for the 2015-16 season is £150m, which reflects
Leicester City FC’s income in 2014-15 (£104m) plus a further £46m for TV and football income and
sponsorship and advertising as the club remained at the top of the Premier League. The
Premiership title could be worth an additional £150m to the club in 2016-17 through Premier
League prize money, revenues from the new BskyB/BT Sports premier League TV deal, and
through higher valuation sponsorship assets. Obtaining a direct place in the UEFA Champions
League is itself worth £9m with an additional £1.5m for each group stage win (up to a maximum
of £13.5m) and further payments depending on how far the club progresses with a potential
£39m for winning the UEFA competition.
Additional income to the city and football club has been estimated at £233m (£233,534,000). This
is based on the following additional income:
 £224,000 in additional ticket sales
 £2.7m in additional merchandise
 £22.6m in hospitality
 £208m in additional income to LCFC
Applying a national Type I multiplier coefficient for the “Sports Services and Amusement and
Recreation Services” (ONS, 20109), it is estimated that LCFC’s performance during the 2015-16
season generated an additional £278m injection to the local economy and an employment effect
7
Williams, O. (2015) Economic Impact of Football, University of Derby - Data taken from Visit Britain data set
and mirrored by Mintel (2014) Consumer Spending on Attending Live Sport.
8 Deloitte (2015) Football Money League, 2016, Sports Business Group. London: Deloitte
http://www2.deloitte.com/uk/en/pages/sports-business-group/articles/deloitte-football-money-league.html
9 ONS (2010) 2014 UK Input-Output Tables for the UK. London: Office for National Statistics
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of £408m. In thinking about the induced impact of the direct additional expenditure in Leicester, a
Type II coefficient has been applied for “Arts-based Activities and Events” in the East Midlands
drawing on earlier work by CEBR (2010) to provide an estimate of likely economic impact.
Table 1 - Summary of Economic Impact from LCFC
Impact Type
Type I Analysis
Sector coefficient for Sports
Amusement and Recreation
(ONS, 2010)
Type II Analysis
Sector Coefficient for the
East Midlands (CEBR,
201510)
Expenditure
£233,534,000
Output
X 1.749
=£408,450,966
Employment
X 1.749
= £408,450,966
GVA
X 2.190
= £515,819,460
£233,534,000
X 1.97
= £460,061,980
X 2.10
= £857,747,029
X 1.88
= £439,043,920
Based on these figures a conservative estimate of the economic impact of Leicester City FC’s
Premier league win 2015-16 for the City of Leicester and surrounding area would be £500m,
rising to a possible £850m as the induced impacts of the initial expenditure are fully felt
through the local economy (as initial additional expenditure filters through local supply chains).
Impact of the Victory Parade and Events
Thinking about the impact of the celebratory events in the City.
Transport – additional £39,802
It has been estimated that as many as 240,000 people attended the city-wide victory parade and
celebration event on 16th May, with car parks, bus and train transit routes operating at full
capacity. Arriva buses report that almost 40,000 people made use of their £1 victory ticket on the
evening of 16th May, injecting an immediate £39,802 into the local economy.
Sales – £6,355,000
Assuming a modest estimate of £10 spent per person attending the LCFC Victory Parade, one
might estimate that the Parade injected an immediate £2.4m into the local economy. Sale of
Kasabian tickets at King Power Stadium produced an additional £3.93m, local companies House
Parti and Paper Tiger sold more than a thousand inflatable ‘fox’ and ‘silver cup’ balloons to
decorate shops and businesses, and paper fox hats and balloons were sold in their thousands at
the 70,000 crowd at Victoria Park itself, all of which injected a further £25,000 into the local
economy.
10
CEBR (2015) Contribution of the Arts and Culture Industry to the National Economy. Reports for Arts Council
England. Centre for Economic and Business Research
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Hospitality - £2m
A number of hospitality businesses based in the City Centre have reported retail sales spikes in
excess of 300% during victory celebrations during May 2016, with many food and drinks outlets
simply running out of products to sell customers. Whilst it is difficult to gain a precise picture
given the variation in different sectors a 300% increase in business turnover along the High Street
and Narborough Road areas of the city would inject a further £2m into the local economy.
Applying a Type I Analysis Coefficient for the Sports Amusement and Recreation sector (ONS,
2010), it can be argued that £8.4m (£8,394,802) of sales during the victory celebrations injected
£15-18m into the local economy. When induced impacts through local wages are taken into
consideration as part of a Type II analysis, it is reasonable to assume that the final wage-related
growth in the economy just from the victory celebrations alone will be in the order of £16m.
Table 2 - Summary of Economic Impact from Victory Parade and Celebrations
Impact Type
Type I Analysis
Sector coefficient for
Sports Amusement and
Recreation (ONS, 2010)
Type II Analysis
Sector Coefficient for the
East Midlands (CEBR, 2015)
Celebration
Sales
£8,394, 802
Output
Employment
GVA
£14,934,352
(1.779)
£14,682,508
(1.749)
£18,384,616
(2.190)
£8,394,802
£16,537,760
(1.97)
£17,629,084
(2.10)
£15,782,227
(1.88)
Legacy Impact for the City
In terms of a lasting legacy for the city, the lasting support and pride in LCFC is still visible in the
city 3 months after their surprise premiership win.
Local Pride and Consumer Confidence – There is considerable support for the football team in the
city centre and along main transit routes. Shops along the High Street, by the Clock Tower, in the
High Cross Centre, and the lanes leading into St Martins Square have celebratory banners, flags,
and promotional material displayed proudly in shop windows and office entrances. The Cank
Street Gallery for example boasts paintings of Jamie Vardy, the LCFC striker and local/social media
celebrity (#Jamievardyhasaparty).
Whilst consumer confidence in the UK has risen faster than the global average in recent years
(Nielson’s 2016 Global Consumer Confidence Tracker11), the uncertainty and economic volatility
associated with the June EU Referendum has seen consumer confidence lagging nationally
throughout the summer and boosted only recently as a result of the Wimbledon and Summer
Olympics wins. Given that media attention, morale, pride, and loyalty from sporting wins, and
11
Nielson (2016) Global Consumer Confidence Tracker http://www.nielsen.com/consumerconfidence
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consumerism are irrevocably linked, it is a reasonable supposition that consumer optimism in
Leicester will remain high throughout 2016, even as this begins to lag in other cities.
Name recognition – overseas awareness in the city, which is materialising into increased enquiries
and web searches for the city: Leicester City Council report increased inward investment inquiries
from businesses; De Montfort University report a 60% upswing in international student
applications in 2016; and social media interest in Leicester have surged since the LCFC win. There
were more than 10 million tweets about Leicester using the #LCFC and #havingaparty hashtags,
5.8 million facebook followers of LCFC, and 127 million google searches for Leicester in 2016,
twice as many for other regional cities in the UK. All of which helps in developing brand
recognition (recognising a logo, hashtag, name, tag line, or campaign), which ultimately translates
into marketability, competitiveness and market position, and by extension income generation, fan
loyality, and visitor appeal.
Future LCFC Performance - LCFC’s 2015-16 performance seems likely to spur current plans to
expand the King Power Stadium to 50,000 seat occupancy, representing a 53% increase in income
generating capacity. For the current time, season ticket holders have been flocking to King Power
Stadium to renew their seats after season tickets for new applicants sold out in less than 3 days.
At the same time, there has been a spike in sales of Gold rather than Bronze and Silver Fox
Membership packages for the 2016-17 season, an indication that pride and loyalty remain high in
the club as it enters the new football season. Further afield, there are signs of interest in LCFC for
away fans and European clubs, who will have the opportunity to visit the city, some for the first
time, during future Premier League and European Championship matches. For the City itself the
prospect of drawing in away fans is highly lucrative, with every £1 spent on food, drink, transport,
and hotels generating a further £1.19 for local businesses and with visitors spending on average
£795-855 per visit (depending on whether they are UK or European visitors). With as many as
3,000 visiting supporters likely to converge on the city for every home fixture during 2016-17, the
prospect of 60,000-100,000 visitors to Leicester throughout 2016-17 will fuel optimism in the
hospitality sector.
Conclusion
The precise impact of Leicester City FC’s Premier League win will not be known for some time. The
impact of the Club’s win in terms of additional commercial income will not be known until the end
of the 2016-17 season, when sponsorship and TV deals come to an end, and final merchandise
sales are counted. The full impact of football visitors and spectator expenditure in Leicester’s
hospitality sectors will also be unknown for some time, and the true extent of knock-on effects
through supply chains will also take years to be fully worked through. Similarly, the medium and
longer-term effects of place marketing on e.g. investment in the city will take time to materialise.
Although it is known that the Club’s win has coincided with a spike in business interest in the city,
it is not possible to attribute this to Leicester City FC, as opposed to wider regeneration efforts of
the city.
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for the With that in mind, what is presented here are estimates on the likely impact of Leicester
City FC’s premier league win, which have been calculated from sports expenditure in the city, club
income details, and from what is known from the celebratory events in May 2016. Using
expenditure estimates in conjunction with national multiplier coefficients from the Office of
National Statistics plus suitable regional coefficients, we have attempted to calculate best
estimates of GVA impact avoiding wherever possible obvious double-counting and deadweight
effects. It has not been possible at this stage, to calculate net effect – the impact less costs and
displacement of economic activity. One might expect a reasonable level of leakage out of regional
supply chains but would expect a higher level of leakages from club income, with increased
revenue being recycled through higher wage bills, new purchases, marketing etc. which it is
reasonable to assume might leak out of the city.
Whilst the estimates contained in this report suggest an overall economic effect of between
£515m and £866m for the City, depending on whether induced impacts from supply chains are
taken into consideration, this is intended to be a basis for further discussion rather than a final
impact assessment.
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