Ruud van Nistelrooy ‘trigger clause’ and £47.5m ‘near miss’ scenario mooted after Leicester City sacking
Ruud van Nistelrooy finally left Leicester City by mutual consent on Friday, and EFL Analysis finance expert Adam Williams has shed some light on why the decision took so long.
Van Nistelrooy leaving Leicester City by mutual consent felt like a long time coming. The 48-year-old was placed on the chopping block at the King Power Stadium long before the Foxes were relegated from the Premier League.
But as City had breached PSR for the 2023/24 season, it was reported that Leicester couldn’t afford to sack Van Nistelrooy.
More recently, there were suggestions that Leicester were waiting until the end of the financial year (June 30) to finally relieve him of his duties.
However, after dismissing him three days before, a possible explanation behind that decision has now been shared.
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Why Leicester City may have sacked Ruud van Nistelrooy earlier than planned
Journalist Henry Winter slammed Leicester City for how long it took for them to sack Van Nistelrooy, suggesting the club owed the fans an explanation.
Fortunately, thanks to insight from our Chief Finance expert, Adam Williams, the Foxes could have placed a ‘trigger clause’ into the Dutchman’s contract that allowed them to kick the compensation package into the ‘next financial year’.
“The timing is unusual, I would suggest,” Williams told EFL Analysis. “On a human level, it’s really poor that they have left Van Nistelrooy in limbo like this. I’m sure he will have been aware that the decision was coming, but to have to wait so long for official confirmation and now the barrage of phone calls he’ll be getting isn’t good form from Leicester.
“Looking at it in more clinical terms, on the surface level it seems like it would have made more PSR sense to wait until after 30 June when their accounting year rolls over. The consensus is that they are pretty close to the limit, so holding off until the new Profit and Sustainability Rules assessment begins on 1 June would appear to have been the logical decision.
“But they’ve chosen not to go down that route, so my thinking is that there might be a trigger clause in his deal that allows Leicester to kick the compensation package into the next financial year after a certain date. Either that or some other contractual situation that reduced his package.”
Williams also speculates that another possibility could have aided their decision to pull the trigger earlier than planned, as terminating a deal close to the deadline would have been classed as a ‘near miss’ for PSR purposes, something Nottingham Forest used to their advantage previously.
“The other possibility – and I’m speculating here – is that Leicester’s decision to terminate the deal so close to the deadline could be classified as a “near miss” for PSR purposes,” he adds.
“We saw this in Forest’s argument in their PSR case when they said that the £47.5m deal to sell Brenan Johnson was completed shortly after the PSR deadline so it should count as a mitigating factor. If it comes to it, perhaps that could be something Leicester use in their favour – but then again, that wouldn’t explain why they wouldn’t just wait another few days until the new PSR window. And I’m not sure if the near-miss mitigation works in reverse.”
How issues with King Power may have impacted Van Nistelrooy decision
EFL Analysis reported that Leicester City owners King Power are struggling due to the decline of the tourist market in Thailand, as the Foxes are supported by the company, which could impact the club moving forward.
Williams adds that perhaps the club couldn’t make up their minds over whether to stick with the former Manchester United striker, or even the wider implications involving King Power could have played their part.
“Either that or they genuinely hadn’t made their minds up and PSR isn’t as much as an immediate concern as we think it is,” he said.
“If that’s the case, the explanation of the timing might be as simple as this is when they made the decision, maybe because of the complications with King Power’s wider business empire. Either way, it looks pretty bleak – it’s really poor planning.”
Danny Rohl is now one of the leading contenders to replace Van Nistelrooy, as a telling summer awaits at the King Power Stadium.
