If you ever wondered why so many Championship clubs have nearly gone to the wall in the pursuit of the Premier League, you need only take a look at Leeds United’s latest accounts to understand. Second-tier triers have thrown every available, and sometimes unavailable, financial resource at promotion in an effort to reach the promised land because of the transformative wealth which awaits.
The Whites have quickly discovered, even in a Covid-hit first season back across 2020/21, just what the Premier League does for a football club. In short, the club is in the best financial health it has been in for as long as anyone can remember.
Assuming they can retain that top-flight status through this May and next, history suggests United will have the financial stability and security to establish themselves at the top table for many more years ahead. In 2020, Angus Kinnear and Andrea Radrizzani spoke about how the odds drastically lengthened on relegation for newly-promoted clubs once they went beyond a third consecutive year in the Premier League. That second year looks just about there, but re-evaluate that on Saturday night.
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The accounts illustrate the ins and outs for 11 months up to June 30, 2021, because 13 months had been documented in the accounts up to July 31, 2020. So when you look across the figures, bear that slight skew in mind.
The leap from an operating loss of £64m at the point of promotion from the Championship to an operating profit of £5m, up to £26m with waived loan interest, is the bottom line that sums up the picture neatly for everyone. There was £23m raised from shares, presumably via 49ers Enterprises, a rise in income from £54m to £171m powered by the broadcast revenue, though that overall figure would have been even higher if the turnstiles had been clicking.
All this money flowing into Elland Road commands one thing for supporters: a competitive and entertaining football team. A ninth-placed finish provided that in what the figures now underline, Covid-closed stadiums aside, was a perfect campaign in virtually every way for Leeds.
Of course, outgoings skyrocketed in line with the demand for better players, but the profit margin shows Radrizzani, Kinnear et al were getting their sums right across that first season back. Wages rose to £108m across 11 months in contrast to the £78m which was spent across the 13 months prior to that.
The 20/21 numbers amount to an average wage of £55,000 per week according to Kieran Maguire, an academic specialising in football accounts. That wage bill, when extrapolated to a 12-month period for comparison with their Premier League rivals, put Leeds in the bottom six budgets and yet they finished in the top half. Marcelo Bielsa’s side vastly outperformed their pay scale.
Another major success story on a league-wide scale, calculated by Maguire, is delivered by the profit comparison. Of the 16 clubs who have filed their accounts for that period, Leeds and Sheffield United were the only two to make a profit. Again, the Whites finished in the top half.
Two findings which throw the story forward for Leeds focus on player sales and commercial income. Anyone following the transfer market can do the basic maths on the back of an envelope to show how much has been spent on players and how little has been brought in from sales.
These accounts put purchases, some in instalments, at £99m with sales of less than £2m. The Raphinha and Kalvin Phillips headlines of late have thrived on that narrative and while star exits can be unpleasant, you sense the club will be aware of that hole in their recent revenue streams.
Commercial income underlines the potential of the club and perhaps why the likes of 49ers Enterprises have shown such interest in Leeds. Maguire has helpfully drawn up a chart which again shows Leeds are already halfway up the entire division’s table for commercial income, even with just one Covid-hit season behind them.
More seasons in the top flight, more eyes on them and there is evidence of the potential for Leeds to become a real power outside the traditional top six in the very short-term future on a commercial basis.
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