Leeds rack up £62 million loss on way to Championship title
04 Apr 2021 05:55 pm, by YorkshireSquare
Accounts for the period 1st July 2019 to 31st July 2020, covering the whole Championship winning season, show Leeds losing a staggering £62 million despite recording record revenues. Operating costs topped a whopping £108 million with wages standing at £78 million plus £20 million in promotion bonuses. This gave an average weekly wage of £33,500 with standing at 145% of income. The accounts also include a £7 million rebate paid to Premier League broadcasters to refund subscribers for the loss of broadcast games during the 2019-2020 season though they did have £31 million in the coffers during July 2020 as the first Premier League TV payment was made.
The accounts also include player registrations of £46 million, which may surprise Leeds fans due to the lack of significant permanent signings during the summer of 2019. These figures will however include the £15 million deal to make Helder Costa’s move permanent and the £5 singing of Illan Meslier last summer due to the extended season and accounting period. Leeds United were owed £5 million in transfer fee instalments from other clubs and owed £48 million themselves.
Whilst matchday revenues were hit by Covid, Leeds brought in record revenues for a non-parachute payments club. The £54 million Leeds generated in 2019-2020 was on a par with Aston Villa’s revenues for the 2018-2019 season when they received £15 million in solidarity payments. Leeds received a £2.5 million payment from an insurance claim relating to loss of profits due to Covid. The clubs biggest single source of revenue was merchandise sales of over £15 million. Gate receipts were £11.4 million with catering revenues at £4 million.
Whilst the numbers are scary, they are fairly normal for Championship clubs striving for promotion to the Premier League, Villa racked up £84 million losses during the 2018-2019 season. Covid costs and promotion bonuses do not contribute towards Financial Fair Play Calculations and Leeds would have avoided any penalties had they stayed in the Championship. There would however have had to be some significant financial restructuring had promotion not been achieved including key player sales. Andrea Radrizzani’s gamble has paid off though! Leeds managing director Angus Kinnear said;
Despite the unprecedented operational and financial challenges posed by the Covid-19 pandemic, the group won the EFL Championship by 10 points whilst successfully maintaining the group's financial integrity with record commercial growth. The primary risk facing the group remains the divisional status of the club’s first team due to the impact on key revenue streams, however we remain confident we have built a commercial model to fund a technical set-up which can ensure Premier League retention.
Leeds will owe players bonuses of £35 million and trigger potential transfer addons of £18 million by achieving Premier League survival this season but will earn an extra £20-30 million in prize money by finishing so far up the table. This could give Leeds a share of the Premier League broadcast and commercial revenues in the region of £120 million. A significant increase on the £9 million in broadcast revenues and central distributions from the last Championship season. The accounts also confirm the £23 million investment from 49ers Enterprises, the investment arm of the San Francisco 49ers.