2023/24 was the first season at Leeds under the ownership of 49ers Enterprises, who assumed full control of the club at the end of the 2022/23 campaign after adding the 56% held by Andrea Radrizzani’s Aser Ventures to their existing 44% minority stake, with Paraag Marathe becoming chairman.
Leeds United’s pre-tax loss significantly widened from £34m
to £61m, as revenue dropped £62m (33%) from £190m to £128m following
relegation, exacerbated by profit from player sales more than halving from £73m
to £34m. This was partly offset by the
club cutting expenses by £92m (31%) from £296m to £204m, though net interest
payable significantly increased from £1m to £18m.
The main driver of Leeds’ £62m revenue decrease was
broadcasting, which basically halved in the Championship, falling by £58m from
£112m to £54m as “a direct result of relegation from the Premier League”.
Commercial income was also down, but only fell £5m (10%) from £48m to £43m. In contrast, gate receipts actually slightly
increased, rising £0.7m (2%) from £29.9m to £30.6m, which was an impressive
feat after relegation.
Despite the steep reduction following relegation, Leeds’
£128m revenue was the highest in the Championship by some distance, ahead of
the two clubs that went down at the same time, Leicester City £105m and
Southampton £85m. In fact, Leeds’
revenue last season is also the highest ever in the Championship, again ahead
of Leicester. These are the only two clubs that have ever generated more than
£100m in England’s second tier, far above Newcastle United’s £86m in 2016/17.
The vast majority of clubs in the Championship lose a lot of
money, but Leeds’ £61m was the worst in the league last season, a lot more than
Ipswich Town £39m, WBA £34m and Stoke City £26m. In fact, Leeds’ £61m pre-tax loss is the
fourth highest ever recorded in the Championship, only “beaten” by Stoke City
£88m (2019/20), Aston Villa £69m (2018/19) and Leeds themselves with £62m in
2019/20.
Leeds have only once been profitable in the last decade –
and that was just £1m back in 2016/17. Since then, they have posted losses
seven years in a row, amounting to £231m. This period included the club’s
largest ever loss of £62m in 2019/20, when they invested big sums to help
secure promotion. However, they also
contrived to lose money in all three of their seasons in the Premier League,
adding up to £82m, so promotion to the top flight is not always as beneficial
as people might expect. In fairness,
Leeds were adversely impacted by COVID during this period with the club
advising that this caused a loss of £43m, split between £9m in 2019/20 and £34m
in 2020/21.
Player sales and loans
Leeds have traditionally not done very well with player
trading, making only £76m in the 13 seasons up to 2021/22, but there has been a
dramatic change since then with £107m profit in the last two years. The club record £73m in 2022/23 was due to a
couple of big money deals, as England international Kalvin Phillips went to
Manchester City, while Brazilian winger Raphinha moved to Barcelona.
This should be blown out of the water in 2024/25, as the
club has sold a lot of talent, including Georginio Rutter to Brighton,
Crysencio Summerville to West Ham, Glen Kamara to Rennes and Marc Roca to Real
Betis. Most painfully, they also sold
local lad Archie Gray to Tottenham for a reported £40m, though this represented
pure profit, as he was an Academy product. Marathe admitted, “There are certain
trade-offs we have to make.”
Leeds have also moved out quite a few players on loan, which
had the benefit of lowering the wage bill, while also reducing their value in
the books, thus making it more likely to realise a profit on future sales.
Leeds’ average attendance slightly slipped from 36,566 to
35,989, but this still represented an excellent performance in the lower
division, which the club attributed to its “unwavering support”. Crowds have
shot up 60% since 22,448 in 2015/16.
The club recently announced a ticket price increase for the
2025/26 campaign, including a chunky 14% for the cheapest adult tickets. This
was only the third increase in 12 years, but prices have gone up a lot in
recent times. There was no general rise
last season, but the club began a process of gradually equalising pricing over
the course of several seasons, which saw some fans facing an increase of up to
12%.
Elland Road has a relatively small capacity of just under
38,000, while the club has over 25,000 people on its season ticket waiting
list, so it is not surprising that they have plans to expand the stadium to
53,000, especially given that 49ers Enterprises have experience in stadium
development. This could ultimately
increase capacity to 60,000, which would enable them to compete with the
moneyed elite, especially if they focus on corporate seats, hospitality and a
multi-use stadium.
Leeds’ commercial revenue last season set a new all-time
record for the Championship, overtaking their own £34m in 2019/20. The
Yorkshire club fills four of the top six places in this ranking. Chief executive Angus Kinnear said, “The
strong commercial performance continues to illustrate the potential of Leeds
United being the only club in the United Kingdom’s third biggest metropolitan
area. This should prove a structural competitive advantage that can be
leveraged to secure Premier League status over the long term.” He is right to emphasise the status of the
city as a vibrant regional capital.
Wage bill
Leeds’ wage bill was cut by £62m (42%) from £146m to £84m,
as the club rebalanced in the Championship, thanks to relegation clauses and
the departure of some high earners. The
reduction was also due to a steep decrease in management pay-offs from £9.5m
(Jesse Marsch and Javi Gracia) to just £161k. If these exceptional items are
excluded, wages were down £52m (38%) from £136m to £84m. Despite the fall, Leeds’ £84m wage bill was
still the second highest in the Championship, only below Leicester City’s
£107m, but just ahead of Southampton £81m, then a big gap to Norwich City £52m.
Unlike costs associated with the squad, Leeds’ other
expenses increased following relegation, rising by £4m (10%) from £44m to £48m,
a new high for the club. Fans don’t
often pay much attention to this cost category, but it has more than doubled in
the last five years, due to higher inflation, especially for services and
utilities. Leeds had the highest other
expenses in the Championship.
The narrative at Leeds for quite some time is that they have
relied on financing to pay their way: £281m from the owners (£191m share
capital and £90m loans) plus another £32m from the banks. This has mainly been
spent on purchasing players £180m (net), covering operating losses £89m,
investing in infrastructure £33m and paying £17m interest. In
the last four years, i.e. since their promotion to the Premier League in
2019/20, Leeds’ owners have put in £221m of funding, including £158m last
season alone. This featured £170m of share capital from 49ers Enterprises
As well as becoming the club’s shirt sponsor, in May 2024
Red Bull bought a minority stake (reportedly 10%) in Leeds United. This move has caused some concern among the
fans, given Red Bull’s usual approach is to go for a full “rebrand” of a club,
e.g. RB Leipzig, Red Bulls Salzburg and New York Red Bulls.
There have also been reports recently that 49ers Enterprises
are interested in acquiring Scottish club Rangers, though the Scottish Football
Association is yet to sign off on any deal.
If a takeover were to be completed, this would raise all sorts of
questions about how the multi-club ownership structure would operate. Given
that Rangers have a greater chance of qualifying for the Champions League (in
what is effectively a 2-club league), might Leeds even become a feeder club to
the Scottish giants?
Leeds’ American owners have attempted to put supporters’
minds at rest, stating that any addition to its portfolio would only help to
bring brands together and apply best practices, so there should be no overlap.
The biggest one club
city in the UK
Leeds stand a good chance of securing promotion, either
automatically or via the play-offs, as they are currently in third place, only
two points behind the leaders, Burnley. However,
if they do miss out, then their challenge would become more difficult, as their
parachute payments would further reduce next season.
The good news is that 49ers Enterprises have demonstrated
their commitment by funding the hefty loss and the investment in the squad with
a sizeable capital injection, but the worry is that they might get bored with
the project if Leeds don’t get back to the Premier League any time soon.
Leeds is the biggest one club city in the UK with an
incredible fan base that provides strong support, both from the stands and from
a financial perspective, so it probably “deserves” to be in the top flight. However, notwithstanding those advantages,
it’s incredibly difficult to get out of the Championship, so few Leeds’ fan
will be counting their chickens at this stage.
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