Leeds United lost control as scary seven-figure weekly losses revealed – Kieran Maguire
Kieran Maguire has admitted he was left “scratching his head” to discover that Leeds United were stacking up weekly losses of as much as £2million per week according to their latest accounts.
The University of Liverpool football finance expert told Orta Know Better on 12 April that despite record revenue the documents for the 2022/23 financial period revealed the club had “lost control of the costs” and were losing money on a “scary” level last season.
He highlighted his belief that the issues with the recent finances at Elland Road were a concern on a cashflow basis rather than in terms of risking profit and sustainability sanctions, where the club insist they are compliant, but couldn’t believe that the Whites were already losing £20 for everyone £100 they made, even before any spending outside player costs were factored in.
Maguire said (2m 50s): “Let’s start with the good news. It was the most revenue that Leeds United Football Club has ever generated in a year, so that’s the good bit.
“But then we move onto this thing of profit, and in terms of the day-to-day running of the club it was losing £1.5million to £2million a week, which is a little bit scary.
“And the reason for that, to a certain extent, is the club lost control of the costs. The major costs as far as the club were concerned are player costs, so you’ve got wages. I estimate they were paying, and this was in a relegation season so there won’t have been bonuses for avoiding that, on average over £70,000 a week in wages. Then the other big cost is transfer fees, and it was costing £1.5m a week in amortisation.
“You put the two player costs together and for every £100 that Leeds United generated during 2022/23, remember they were a Premier League club, they’d got really good gate receipts, of the ‘other 14 clubs’ they’re right at the very top in terms of commercial appeal, they were still paying £120 on player costs.
“That’s before you put the flood lights on, before transport to away matches, before you put petrol in the mower for the groundsman, they’re already losing money, and that had me scratching my head.”
Leeds United throwing money down the drain in relegation season
Record revenue isn’t much good if it is being more than counter-balanced by such heavy costs, and considering how poor Leeds United were last term it is obvious they didn’t get value for money.
That they were paying so much in wages after the sale of their two biggest stars in Raphinha and Kalvin Phillips the previous summer is all the more glaring, and shines a harsh light on the final months of Victor Orta’s time at the club.
While it was a miserable experience for Whites supporters, and Daniel Farke, following relegation the numbers also show why the club saw so many players out of the door and mostly for no transfer fee.
The relegation release clauses were said to be a trade-off for the the huge wage cuts that were written into the players contracts [Square Ball, 7 September], and it is clear how much of a risk there would have been without them.
As it was plenty of players couldn’t wait to get out of Elland Road following the drop but there have been examples of players, such as Jack Rodwell at Sunderland [Sky Sports], who have remained at a club on hefty contracts in the lower leagues rather than move on.
It is a positive that the accounts aren’t predicted to land the club in a PSR mess like Leicester City are currently facing, but is another measure of the chaotic nature of Leeds United by the end of the Andrea Radrizzani reign.
Assuming Daniel Farke can finish the job and get the club promoted back to the top flight there shouldn’t be a major problem going forward, but there remains significant holdover from the previous era, which the 49ers themselves can’t fully abdicate responsibility for, that could again become worrying if faced with another campaign in the second tier.
In other Leeds United news, a major mooted transfer will “100%” be a story this summer admits Phil Hay.
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