Leeds United projected to be over Premier League squad cost limit after spending rules change
Leeds United are predicted to be on the wrong side of the new squad cost spending limit if promoted next season, according to an estimate from Kieran Maguire.
The football finance expert from the University of Liverpool posted figures on Twitter (11 April) projecting how clubs would fare under new spending rules set to come in for the Premier League from this summer.
The current profit and sustainability regulations, which have seen the likes of Everton and Nottingham Forest deducted points, are set to be replaced by a system similar to that employed by UEFA, with an expectation that 70% of a club’s revenue can now be spent on the squad.
Maguire wrote: “Let’s not pretend we care about the new Premier League spending rules, what is important is HOW MUCH CAN WE SPEND or do we need to save?
“Based on assumptions of Player wages = 80% of total & player profits = best of last 1,2 or 3 this is the estimate.
“What does it means in plain English? Five of the SuperLeague Six can spend a lot more money, along with Financial Teacher’s Pet Brighton.
“Aspirational/ambitious clubs such as [Aston] Villa, [Nottingham] Forest and Newcastle who want to spend more money will not be able to do so & instead need to cut.”
Based on his calculations using available accounts, which in the Whites’ case relates to their final top flight season before relegation, Leeds could be around £2.2million over the squad cost cap and unable to spend big as things stand.
Tight Leeds United financial projection for possible promotion
The situation at Elland Road has clearly changed a great deal since the period covered by the accounts, with the increasingly-chaotic final throws of the Andrea Radrizzani era having given way to the comparatively serene 49ers ownership.
But there will no doubt still be some holdover effects and the huge amount in transfer fees still owed moving forward factors in, not least since there is next to nothing due to come the other way [Kieran Maguire, 10 April].
The significant drop in revenue for a season out of the top flight, even allowing for parachute payments won’t have helped either, while Leeds United can’t even fall back on the proceeds of a lucrative fire sale following the drop since nearly everyone who left last summer did so for very little or on loan.
Deals for Tyler Adams and Luis Sinisterra to go to Bournemouth are something, and further sales before 30 June could boost the picture greatly in order to tip the Whites onto the right side of the line.
But there doesn’t look to be a huge goldmine of potential sales to be made when most of the first-team players who made loan moves haven’t exactly set the world on fire this term.
Given the nature of how club’s finances become public months in arrears Maguire’s figures aren’t exact, and the club insist they are PSR-compliant in both of the top two tiers, but when a promotion usually requires investment in the squad it is looking tight, although in light of the wobble in form the first priority is for Daniel Farke to ensure the club even gets out of the Championship.
In other Leeds United news, Phil Hay says the Whites are “going to see a lot” of another academy star “like Archie Gray”.
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