How Leeds United can still avoid fine and points deduction in Archie Gray transfer saga despite missing deadline — YEP 1/7/24
By Joe Donnohue
Leeds United's attempts to comply with Profitability and
Sustainability rules (PSR) has seen the club try to offload academy prospect
Archie Gray for upwards of £35 million.
Brentford and Tottenham Hotspur have both been in talks with
Leeds and the player over the weekend with the latter moving into pole position
on Sunday after a £40 million approach from the Bees was rejected by Leeds due
to disagreements over the transfer payment structure.
Despite a distinct lack of transfer activity throughout June
and suggestions the club were not in a financial position which would
necessitate a major player sale before the end of the month, Leeds' hand
appeared forced by PSR compliance over the weekend as news broke of Gray's
imminent exit.
While a deal is yet to be struck, negotiations continue and
it is still expected that the England youth international will leave Elland
Road this summer.
Leeds' willingness to sell has been motivated by their need
to conform to PSR, which permits clubs to make losses up to a certain amount
over a three-year accounting period. Premier League clubs spending all three
seasons of said period in the top flight are allocated a loss-making threshold
of £105 million. Leeds' threshold, between July 2021 and June 2024, is
understood to be in the region of £83 million as the 2023/24 season was spent
in the Championship.
A sale of up to £40 million for an academy-produced player,
for whom sales represent 'pure profit' in a book-keeping sense, greatly
improves Leeds' financial outlook and should in theory mean the club comply
with PSR, therefore avoiding the type of sanctions Everton and Nottingham
Forest were hit with last season for breaching financial regulations.
June 30 was dubbed a 'mini deadline day' with clubs such as
Newcastle United forced to complete big business before the midnight accounting
deadline, at which time balance sheets for 2023/24 needed to be submitted. The
Magpies sold Yankuba Minteh to Brighton and Hove Albion for £33 million and
academy product Elliot Anderson for a similar figure to Nottingham Forest in
order to close a financial hole estimated at a reported £50 million.
Leeds' deficit is estimated to be somewhat less, but it
appears the only way of closing the gap at such short notice would be to make a
sale.
Given the June 30 deadline has passed and Gray remains a
Leeds player at the time of writing, supporters have been left wondering
whether the club will be hit with sanctions if their accounts do not reflect
PSR compliance.
However, due to June 30 falling on a Sunday which is not an
official working day, clubs can provide paperwork to show the EFL and Premier
League intent to conduct business over the weekend, which would permit Leeds to
report Gray's sale in 2023/24's accounting period, provided a deal is concluded
promptly.
In the same way a deal sheet on transfer deadline day allows
clubs to conclude business beyond the deadline, there is an understanding that
such negotiations can be complex, drawn-out processes, therefore as long as
intent to complete a transfer has been demonstrated to the relevant
authorities, Leeds can still avoid sporting and financial penalties.
There is, of course, a scenario where talks with Tottenham
break down in a similar manner to discussions that took place with Brentford
over the weekend, but given Leeds' apparent need to raise funds, the club are
expected to be reluctant to leave the negotiating table at such a late stage.
That said, the two London clubs are not the only sides casting admiring glances
towards the youngster.
