Leeds United to discover summer transfer spending allowance as club sent £13m PSR accounts warning — YEP 1/4/25

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By Joe Donnohue

The imminent release of Leeds United's 2023/24 financial accounts will broadly reveal the club's level of potential spending in this summer transfer window.

Leeds' transfer expenditure this summer will hinge heavily upon which division the club find themselves in for 2025/26, however, the most important factor could yet be the financial headroom United have after the release of their 2023/24 accounts.

Clubs in England's top two divisions are bound by Profitability and Sustainability Regulations (PSR), meaning teams are only allowed to report losses up to a certain figure over a three-year accounting period.

In the Premier League, clubs are restricted to a maximum loss threshold of £105 million over three seasons, although, due to Leeds' situation, dropping into the Championship for 2023/24, their threshold is lowered.

The loss limit for Championship clubs over a three-year period has recently been increased from £39 million to £41.5 million, meaning for Leeds, the maximum amount they are allowed to have lost between July 1, 2021 and June 30, 2024 is £83.83 million.

This is because per season spent in the top flight, clubs are allowed a £35m loss each year, reduced to £13.83m per season in the second tier. Two years in the Premier League, followed by one in the Championship therefore brings Leeds' loss limit for the financial year ending June 30, 2024, to the above £83m figure.

In terms of Leeds' financial results from 2021/22 and 2022/23, the club made pre-tax losses worth £36.7m and £33.7m, respectively. This amounts to just over £70m, meaning Leeds cannot report a loss greater than approximately £13m in their 2023/24 accounts, although that is not expected to be the case due to significant player sales during the relevant accounting period, such as the likes of Tyler Adams, Luis Sinisterra and Archie Gray all leaving the club for fees in excess of £20 million.

Next season, regardless of which division Leeds compete in, United's loss limit will be just over £62 million for the three-year accounting period between July 1, 2022 and June 30, 2025. Considering £33.7m - equating to roughly 54 per cent - is already eaten up by Leeds' results for 2022/23, the club can ill afford to make a combined loss in excess of £30 million for financial years 2023/24 and 2024/25.

For that reason, spending this summer is almost certain to take place after the accounting deadline of June 30.

Should Leeds report a post-tax profit for 2023/24, as fellow relegated side Southampton did, this will give the club more room to manoeuvre when it comes to expenditure on player registrations and wages this summer.

A loss, even after significant sales, may necessitate more belt tightening, though. This will almost certainly be the case if Leeds fail to secure promotion this season.

Football finance expert Kieran Maguire does not envisage Leeds' 2023/24 financial results to cause any problems for the club from a PSR perspective, indicating any loss will be beneath the allowed £13 million figure, or perhaps even a post-tax profit for 2023/24 is on the horizon.

"I suspect 23/24 will have been a tough year for Leeds financially," Maguire told the YEP. "The step-down in terms of broadcast revenues, despite parachute payments, is going to hit the club in the region of £60-65 million. There'll be reductions in terms of commercial income, but it'll still be far higher than anybody else in the Championship and higher than a good proportion of the Premier League as well, such is the value of the Leeds brand.

"A few player sales will have absorbed a lot of the operational losses, there's no indication of any PSR breaches and certainly Leeds had to sell before they could reinvest over the course of the summer and we saw that in relation to Archie Gray.

"I think the operational losses will be substantial but the player sale profits will have offset that to a large extent," Maguire added.

Leeds' 2023/24 financial results will not reflect the sales of Crysencio Summerville, Georginio Rutter, Glen Kamara or Charlie Cresswell, all of whom left Leeds after June 30, 2024, the accounting period deadline.

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