Leeds growing under new ownership but profits turned into loss

4 April 2019

Leeds
Photo: Getty Images Leeds fans celebrate against Milwall. The clubs annual accounts showed significant growth in revenue- but expences went up as well.

Leeds managed to grow their business in many areas – but also made huge investments in squad.

Wage bill grew by 51,2 per cent in one year. Another loss seems on its way.

Richard Jolly contact@offthepitch.com

Leeds United’s first financial year under Andrea Radrizzani’s ownership brought rises across the balance sheet.

The club’s turnover rose 19.3 percent to £40.7 million.  Gate receipts went up £1.1 million and merchandising revenues a further £0.9 million. Catering revenues were 33 percent higher, at £5.2 million. Non-football revenues were 14 times higher, at £1.4 million, after Elland Road staged the IBF welterweight title fight between Josh Warrington and Lee Selby.

However, Leeds’ administrative expenses, at £53 million, also reached new levels. A profit of almost £1 million in 2016-17 became a loss of £4.3 million in 2017-18. Their wage bill leapt from £20.7 million to £31.3 million, or 77 percent of turnover.

Notably, the number of full-time playing staff jumped from 42 to 58 and the number of employees in “team management” went up from 14 to 21. Leeds attributed the financial loss to “investment in both player registrations and salaries and scouting expenses”.

Turnover grew by £10 million in two years

They cited in their accounts that several players recruited in 2017-18 – including Ezgjan Alioski, Samu Saiz, Tyler Roberts, Adam Forshaw and Mateusz Klich (Pontus Jansson, another regular, was bought in the same period but went unmentioned) – have featured prominently this season, though Saiz left in the January transfer window.

Leeds currently occupy the second automatic promotion place in the Championship and managing director Angus Kinnear stated in the club’s financial report that “2017-18 had gone a long way to building foundations for a successful season.”

However, if Leeds go up, they are almost certain to make a second successive loss. Players and staff will be entitled to £18 million in promotion bonuses, while other clubs will be owed around £7 million in sell-on clauses.

However, Leeds also invested in a host of other players, many of them young, most of whom have been loaned out this year as manager Marcelo Bielsa has trimmed the squad.

Last year’s spending, and expansion in the size of the squad and backroom team, was funded in part by the sale of Chris Wood to Burnley for £15 million. Charlie Taylor also signed for Burnley, with the proceeds appearing in the 2017-18 accounts.

Radrizzani gave Leeds a £14.5 million cash injection during the 2016-17 financial year after he took a 50 percent stake in the club in January 2017 – he bought the other 50 percent from Massimo Cellino four months later – and their turnover, which was £30 million in 2015-16, has gone up by £10 million in two years.

Only Villa had higher attendance

Leeds’ turnover should again be among the highest – excluding parachute payments – in the Football League again. In 2017-18, their gate receipts rose from £10.185 million to £11.261 million as they boasted the second highest average attendance in the Football League, behind only Aston Villa.

Their average attendance last season was 31,521, which has gone up to 33,738 this year, second only again to Villa.

However, if Leeds go up, they are almost certain to make a second successive loss. Players and staff will be entitled to £18 million in promotion bonuses, while other clubs will be owed around £7 million in sell-on clauses.

Owner Radrizzani, through one of his other companies, Greenfield, bought back Elland Road last summer. Leeds are now leasing it, rent free, where they were paying £1.7 million per year in rent to play there.