Leeds United could have a significant financial advantage over Leicester City in the Championship next season. Both Leeds and Leicester saw their Premier League relegations confirmed on Sunday, but they came in very different circumstances.
United were pumped 4-1 by Tottenham Hotspur to ensure they went down with a whimper. Leicester, on the other hand, beat West Ham United on the final day, only to be pipped to safety by Everton, who saw off Bournemouth at Goodison Park to end the Foxes’ nine-season stay in the top flight.
Both clubs will now be counting the financial repercussions of relegation and for Leeds it seems they could be set to miss out on around £100m in revenue. The Whites will be buoyed by parachute payments, though, which will soften the blow of arriving back into the Championship, but they may still be forced to sell players in order to cover certain costs and satisfy creditors.
Read more: Leeds United set for nine-figure revenue blow as true cost of Premier League relegation revealed
Leicester, though, won’t have the benefit of having parachute payments to fall back on, having taken out a loan from a bank, Macquarie, against Premier League payments until the beginning of the 2025-26 season. That means the money they will receive from the Premier League will go directly to Macquarie to pay off their debts.
Football finance expert Kieran Maguire sees challenges for both clubs in their battle to climb out of the Championship at the first time of asking, but he has pointed to the added complications at Leicester.
“I think it will be intriguing,” Maguire told Leeds Live when asked about Leeds’ financial situation as they head down to the second tier and the expectation of player sales. “The thing that does concern me looking at the accounts is the figure for transfer creditors, which is over £100m. That’s an overhang so I would expect that there would have to be some sales on the back of that.
“That’s additional costs and we don’t know how long that will take. The borrowings aren’t too bad at less than £50m but it’s the sums owing to other clubs which is the bigger issue.
“Leeds are in a strong position from an FFP point of view. They made a profit in 2021 despite Covid and fans not being able to attend Elland Road.
“You’ve got the [Kalvin] Phillips sale coming into the accounts this year. They have no FFP constraints as far as I can see. I think Leicester are in a more complicated situation because they’ve actually sold their TV rights to a bank, so even though they get parachute payments they go straight out the door.
On Leeds’ situation he added: “It’s never what you’re looking for but they won’t have to have a fire sale as we’ve seen with other clubs. If Everton would have gone down it would have been panic positions, Leeds are not in that position.”
READ NEXT
- Leeds United supporters fume as relegation to Championship confirmed 'without a whimper'
Leeds United board talks expected as Sam Allardyce pinpoints first major decision to make
The 11 damaging moments that led to Leeds United's Premier League relegation
Leeds United release defiant club statement as Premier League relegation confirmed at Elland Road
