Football finance expert reveals Leeds United PSR position after £61m loss in latest accounts — YEP 2/4/25
By Joe Donnohue
Leeds United journalist
Football finance expert Kieran Maguire has explained why
Leeds United's £131.2 million loss over the past three seasons should not see
the club commit a Profitability and Sustainability (PSR) breach.
Leeds United's 2023/24 financial accounts became publicly
available this week, revealing a £60.8 million loss for the accounting period
ending June 30, 2024.
It was forecasted that 2023/24 would be a difficult year for
Leeds, financially, after dropping into the Championship 12 months prior,
however, the scale of United's loss was unknown until the accounts were
published.
Leeds' operating loss was significant due to the reduction
in broadcast revenue caused by relegation from the Premier League, although
this was offset to some extent by £69 million worth of player sales and a
player trading profit of £30.9 million.
In terms of avoiding potential sanctions, PSR allows Premier
League clubs to lose a maximum of £105 million over three consecutive
accounting periods. Leeds' situation for the period July 2021 through to June
2024 is somewhat different due to the club spending the 2023/24 campaign in the
Championship, where PSR loss limits are lower.
"Because Leeds have had one season in the Championship,
the allowable PSR loss is only £83 million," Maguire explained to the YEP.
Leeds' loss over the past three years exceeds this £83m
figure, after reporting losses of £36.7m and £33.7m in 2021/22 and 2022/23,
respectively. But, Maguire still does not envisage Leeds contravening PSR.
"At the same time, they should be fine, if you add back
the allowables: infrastructure costs, academy costs - Leeds have a Category One
academy - Women's team, community schemes, then those benefits kick in and I
don't see a problem.
"All of the clubs had to submit their accounts to the
EFL, I think by the 1st of March, so if there were any issues in terms of PSR,
we'd have heard about them by now," Maguire added.
'Allowable expenses' are used to describe costs incurred in
the running of a business which are tax-deductible.
Leeds' pre-tax loss of £60.8m for 2023/24 is tough to
swallow from an accounting perspective, however, last season was always
expected to be a tricky year for the aforementioned reasons, linked to
relegation from the top flight.
The club's revenue for 2023/24 stands at £127.6 million
which is a healthy figure for a Championship side, aided by parachute payments
- although these will fall by a further 10 per cent in 2024/25 - and commercial
deals such as the agreement with minority shareholder Red Bull.
Upon taking charge in September 2023, United's majority
owner 49ers Enterprises vowed to run the club ambitiously by going as close to
the PSR loss limit whilst staying the right side of the line. This was the case
for 2023/24 as the YEP understand Leeds, as per their intention, came close to
the threshold in their bid to secure promotion.