Leicester City operated under a transfer embargo last summer, a restriction that shaped their squad rebuild under new manager Russell Martin. The embargo was imposed due to the EFL's Squad Cost Management Protocol regulations, preventing the club from spending until they moved players out.
An independent Club Financial Review Panel ruled that future Premier League distributions could not be used to increase Leicester's spending capacity under the SCMP. This forced a summer of significant player turnover, with 34 players departing and 16 arriving. The club's financial submission to the EFL for the 2024/25 season was based on a budget that assumed a 15th place finish in the Premier League, a projection that proved inaccurate following their relegation.
Departures cleared the way
The embargo was only lifted after key exits freed up the necessary financial space. Academy graduate Jeremy Monga's move to Manchester City on July 11 was key. Five days later, Leicester were able to register new signings Conor Chaplin and Alex McCarthy. The club was also required to sell other players, including first team regulars, to create further room within the SCMP calculations before they could complete additional business.
Manager Russell Martin acknowledged the constraints.
A delayed rebuild
Many of Martin's signings arrived late in the window, with four of the starting XI from a recent midweek fixture having joined on deadline day. In total, 66 per cent of the players in the squad signed after the season had already begun. Targets like Chaplin, McCarthy and Wes Burns were prepared to wait to join the project, but the club missed out on other players unwilling to delay their moves. The embargo meant Leicester could not formally commit to signings until outgoing deals were secured, putting them at a disadvantage in negotiations.
The EFL has discretion over whether to make such embargoes public, and this one was not formally announced at the time. Its impact is now being felt on the pitch, with Leicester sitting 10th in the League One standings after 10 games, having taken 15 points from a possible 30.
Their recent form shows a team still finding its feet, with three wins and two losses from the last five matches. They travel to face 13th-placed Luton on Friday, looking to build on back-to-back victories over Doncaster and Bromley. The summer's financial restrictions have directly shaped the squad Martin is now working with as he aims to climb the table. The club remains confident that its long term financial plan is sustainable and compliant with EFL regulations.
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