Leksand Granted Elite License Despite Financial Hurdles
Leksand granted elite license despite financial difficulties, maintaining equity slightly above new requirements.
Key Points
- • Leksand secured an elite license with 8% equity, above the 5% requirement.
- • The equity requirement was reduced from 10% to 5% recently.
- • Leksand's financial scrutiny includes fund transfers between its entities.
- • Two clubs were relegated for failing to meet financial requirements.
Leksand, a club in Swedish ice hockey, has successfully secured its elite license, overcoming financial challenges that have raised eyebrows among observers. According to Magnus Karlström, the chairman of the licensing committee, Leksand has met the necessary criteria by maintaining an equity level of roughly 8%, just above the lowered requirement of 5%. This change in equity requirements from 10% to 5% occurred over the past fall and winter, enabling Leksand to qualify despite its precarious financial position.
The licensing regulations mandate clubs to demonstrate at least 5% equity of their total revenues and to avoid insolvency. Leksand has faced intensive scrutiny regarding its finances, particularly due to criticisms about transferring funds between its various entities, which include a real estate company, as a route to meet the criteria. Karlström defended this practice, asserting that such transfers do not adversely affect the financial outlook at the group level since they ultimately balance each other out.
Despite obtaining the license, Leksand's future remains uncertain. Karlström remarked, "They will have it tough for a number of years," indicating the significant economic challenges that lie ahead. In a broader context of financial oversight in Swedish ice hockey, two clubs, Alvesta and KB65, were recently relegated from Hockeyettan for failing to meet capital requirements, underscoring the rigorous standards imposed by the licensing authority.