How Leeds United's financial picture looks as major player sale deadline looms and new £83m figure revealed — YEP 25/6/24
By Joe Donnohue
Leeds United's 2023/24 accounting period ends on June 30
with the club yet to sell a first-team player for big money as was suggested
would need to be the case if the club were not promoted.
Leeds' failure to return to the Premier League via the
Championship play-offs last season led to suggestions the club would be forced
into a sale in order to abide by Profitability and Sustainability (P&S)
regulations - or at the very least, improve the club's financial picture.
With less than seven days remaining until the 2024/25 season
officially begins, on balance sheets that is, Leeds are yet to sell one of
their high-value players.
While the club have agreed a deal to send Jack Harrison back
to Goodison Park on a season-long loan and are on the verge of recouping an
undisclosed fee, believed to be in the region of £5 million, for Marc Roca, a
much-feared post-play-off fire-sale has not materialised.
Leeds' 2022/23 season accounts reflected a £33.7 million
pre-tax loss as the team fell out of the Premier League, down from £36.7
million the year before, totalling £70.4 million. The three-year accounting
period beginning July 1, 2021 and running until June 30, 2024 will permit Leeds
to make a loss of £83 million over those three seasons, which leaves room for a
£12.6 million loss in the unreleased 2023/24 accounts.
This is because clubs in the Premier League are permitted to
make losses of up to £105 million over a three-year period, which works out at
a rate of £35 million per year. However, if one of those three seasons is spent
in the Championship, such as Leeds' 2023/24 campaign, the annual loss threshold
falls to £13 million for that season, resulting in the £83 million figure
listed above.
Going from a £33.7 million annual loss to £12.6 million
within the space of a year, whilst no longer in receipt of Premier League
broadcast revenue and centralised payments, may strike fear into supporters,
but the sales of Luis Sinisterra and Tyler Adams - each transfer in the region
of £20 million - will be reflected in the club's 2023/24 accounts.
Additionally, upon relegation from the top flight, mandatory
wage reduction clauses kicked in, which saw players' salaries fall by a
reported 40-60 per cent in some cases, significantly reducing the club's
overall wage bill.
Included in Leeds' 2022/23 accounts was close to £10 million
worth of pay-offs to former managers, coaches and staff no longer employed by
the club. During the 2023/24 Championship campaign, no such exits were made,
thus saving the club a hefty chunk of change.
Factor in Red Bull's recent investment and front-of-shirt
sponsorship agreement, the latter of which could be reported in 2023/24 the
accounting period given the timing of the announcement, and Leeds are most
likely abiding by P&S regulations. Chairman Paraag Marathe has already
stated this summer he hopes the club are skirting close to the line every
season in order to be as competitive as possible.
Granted, a major player sale before June 30 would greatly
aid the club from a financial reporting standpoint but the manner in which
Leeds have conducted their business so far this summer suggests they are on
sound enough footing for the time being.