Football finance expert Kieran Maguire has explained why Leeds United's lost £37million despite posting their highest ever financial turnover. The Whites posted a record turnover for their 2021-22 campaign, with £189million during their second season back in the Premier League.
That’s a rise of £18m from the previous year, with growths in merchandise sales, commercial revenue streams and ticket sales being credited, but the increase in wages, parting company with Marcelo Bielsa, fall in tv revenue the ongoing Jean-Kevin Augustin case meant the Whites ended the calendar year in a deficit.
Speaking on The Price of Football podcast, Maguire said: "Leeds have fantastic revenues and again, it's indicative of the potential of the club. Especially if Elland Road is expanded in due course.
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"Whilst they've got record revenues of £189million, they've also got what I'd refer to as 'second season blues' and this has happened at both of our clubs. If we take a look at when Palace and Brighton were promoted, both clubs made a profit in that season and then for the next few seasons they were losing money.
"The reason for this, I was talking to the board of a Premier League club last week and they said 'when you get promoted you get players who have been on Championship contracts, yes, they get a payrise, but - I use this in inverted commas - we can probably get away with paying them £30,000 a week. If we survive in the Premier League, the next season the players' reps have been in during the summer and said okay my client is currently on a Championship contract enhanced for being in the Premier League, he's now proven himself to be a Premier League player, I think we need to have a chat.'
"That £30,000 becomes £50,000 or £60,000 a week. That's what we've seen as far as Leeds are concerned.
"Although in the first season under Bielsa they finished ninth, they were playing some pretty exciting football and it was just a tragedy I think for their fanbase that it was taking place behind closed doors. They finished in the top-half of the table and therefor would have got bonuses on the back of that.
"What we've seen is the wage bill has gone up. I'd estimate the wage bill has gone up on average £7,000 per week, so they ended up losing £37million in 21-22. This is for a club who intuitively is one of the middle classes of the Premier League.
"I know people will say they spent a few years out, but we both grew up with Leeds United as a big, big club. These figures, to lose £37million in the Premier League is a lot of money, what I would say is they've subsequently the sales of [Kalvin] Phillips and Raphinha, so I'd expect the results to be far better in 22-23.
"For those Leeds fans who are panicking a bit, they're not having the best of seasons, panic not. It should be better next year as far as the numbers are concerned."
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