Leeds United are the only club in the United Kingdom’s third biggest and arguably most vibrant metropolitan area, enjoying a strong fan base, so it should be in the top flight. I hope they stay up.
Below is a summary of the salient points from the Swiss
Ramble’s analysis of their latest accounts.
Much more depth and analysis can be found on his Substack page (free
trial often available).
Despite the success on the pitch, Leeds United still posted
a large loss of £49m in 2024/25, though this was an improvement on the previous
season’s £61m deficit. Revenue rose £9m (7%) from £128m to £137m, while
operating expenses were only up £1m from £204m to £205m and net interest
payable dropped by two-thirds from £18m to £6m. However, profit on player sales
was £9m lower, falling from £34m to £25m.
Revenue growth
The main driver of the revenue growth was commercial, which
shot up £15m (34%) from £43m to £58m, an incredible figure for the
Championship, while gate receipts were slightly higher, up £1m from £31m to
£32m. This was more than enough to
offset the £7m (12%) reduction in broadcasting income, due to a smaller
parachute payment in the second season after relegation from the Premier
League.
Leeds’ £137m revenue was the highest in the Championship by
a country mile, around 70% more than Sheffield United £79m and Luton Town £67m
(with Burnley, another club relegated from the Premier League the previous
season, still to come).
Of course, Leeds’ revenue will be significantly higher this
season, due to the far more lucrative TV deal in the Premier League. If they
can maintain their current 15th place, they can look forward to receiving
around £130m.
Indeed, in an investors’ presentation issued to potential
investors by 49ers Enterprises, Leeds’ revenue was projected to grow to £262m
this season, which would place them in the top 20 globally, based on the latest
edition of the Deloitte Money League.
Leeds’ £49m loss in the Championship was comfortably the
worst last season, ahead of Cardiff City £35.1m, Coventry City £21.6m and
Norwich City £20.7m.
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
eight years in a row, amounting to £280m. Of course, it is not unusual for
clubs to invest big sums to help secure promotion, so the three largest losses
came in the Championship, but they also lost 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.
Stadium
Elland Road has a relatively small capacity of just under
38,000, while there are over 26,000 people on the waiting list for season
tickets, so it is not surprising that the club has announced plans to expand
the stadium to 53,000, especially given that 49er Enterprises have significant
experience in stadium development.
A couple of months ago, planning permission was granted for
the expansion of the West and North Stands, plus targeted alterations to the
South Stand.
This project should enable Leeds to better compete with the
moneyed elite, especially as there will be a focus on corporate seats,
hospitality and making the stadium multi-use, which could generate an
additional £30m revenue per annum.
In addition, the club has acquired options on several plots
of land close to the stadium, which would give further opportunities to develop
the type of “sports city” so beloved on the continent and indeed America.
Wages
Leeds’ wage bill increased by £19m (22%) from £84m to £103m,
almost entirely due to a promotion bonus. If that payment was in line with the
previous season’s contingent liabilities of £19m, that means that the
underlying wages were basically unchanged.
Leeds’ £103m wage bill was by far the highest in the
Championship, around twice as much as Sunderland’s £54m, which also included a
hefty promotion bonus, followed by Norwich City £48m and Sheffield United £46m. For
some more perspective, Leeds’ £103m wage bill last season was the second
highest ever in the Championship, only behind Leicester City’s £107m from their
promotion-winning campaign in 2023/24.
Funding and multi-club ownership
It is clear that 49ers Enterprises have been prepared to
their hands in their pockets, providing £450m since their arrival at Leeds
united, largely in the form of £398m of share capital.
That included £108m last season plus another £120m since
these accounts, which will be used “to fund business operations, carry out the
stadium expansion project and enable the club to bring in £300m worth of
players over the next three years”.
A consortium including 49ers Enterprises acquired a 51%
stake in Rangers last year, raising all sorts of questions about how the
multi-club ownership structure would operate, especially given the issues faced
by some clubs that have qualified for UEFA competitions.
As Leeds have reached the FA Cup semi-finals, this could be
relevant, looking at FA Cup winners Crystal Palace’s demotion from the Europa
League to the Conference League, due to issues with John Textor owning sizeable
stakes in both Olympique Lyonnais and Palace.
Leeds United chairman Paraag Marathe had also taken on the
role of vice-chairman at Rangers, but he resigned from that position a couple
of months ago, reportedly “to solidify the club’s position under UEFA rules
regarding individuals who have an influence in more than one club”.
There is no doubt that Leeds United are a big club, so their
rightful home does feel like it should be the Premier League, though every club
still has to do the business on the pitch.
The Swiss Ramble concludes: ‘at some stage, it feels
somewhat inevitable that 49ers Enterprises will look to make an exit, when they
will hope to realise a decent return on their investment, as they look to build
a club worth £1 bln by 2030.’ If this
does happen, there should be plenty of quality interest.
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