Leeds 2018: Heartland

In the failing failing failing, Heartland make the places mine


Standing on the brink of promotion to the Premier League, playing exciting football and with a cult hero as a manager, Leeds United are cool to like again.

The club’s recently published accounts show that this success hasn’t come free but by the standards of the Championship Leeds have been a model of restraint compared to other owners who have gambled with the existence of their clubs.

Elland Road regulars have plenty of experience of improper owners and at present they seem to be operating with a competitive budget without going overboard.

Very few clubs get promoted making a profit and whilst Leeds are unlikely to do so themselves at least the level of losses incurred will be modest compared to other clubs who have gone up recently.


EFL rules encourage clubs to split their revenue into at least three categories, matchday, broadcast and commercial.

Every club is trying to maximise all revenue sources at present due to rapidly rising wages, but Leeds were one of the very few who have been in the Championship for a few years to increase all type.

Various other revenue streams are also shown by some clubs (Leeds separate out catering and merchandise for example) but for the purposes of consistency they are all added to the ‘commercial’ heading.

Average attendances at Elland Road were 31,521 in 2017/18, up nearly 4,000 from the previous season, which contributed to a 10.6% increase in matchday income.

Nearly all the additional matchday income came from higher attendances as average revenue per fan has been broadly static for the last five seasons, with 2012/13 being higher partly due to good cup runs that season.

Sunderland, Sheffield Wednesday and Bolton haven’t published their results for 2017/18 yet (all three have reasons to hide the numbers) but for a team that finished 13th in the Championship last to have the second highest matchday income in the division is a sign of the club’s potential.

Income from broadcasting is a thorny subject for Leeds fans as whilst they are regularly chosen for live matches on TV this causes maximum disruption for fans planning their weekends and minimal extra income for the club.

Sky pay £100,000-£140,000 for home Championship matches (and £10,000 for away matches) but compared to parachute payments for those clubs relegated from the Premier League this is miniscule.

Non-parachute payment receiving clubs such as Leeds start each season in the Championship at a huge disadvantage, with research showing that those clubs recently relegated have a seven-point head start due to their extra PL funding.

On the other hand, some sides recently such as Sunderland and Wolves have dropped straight out of the Championship into League One despite receiving parachute payments, mainly due to having disaffected players on huge contracts refusing to move on due to the money they are earning.

The revenue generated from commercial deals and sponsors is where Leeds had the most impressive growth in 2017/18, with an increase of 33% compared to the previous season.

First in the commercial income table by a street is an impressive performance by Leeds as the club leveraged on the goodwill towards the new owner and made the most of being a big single club city.

Income from commercial sources in the Championship included catering (up by £1 million) merchandising (up £1 million) and general sponsorship (up £3 million) but overall Leeds success here helped give additional funds to be reinvested into the playing squad.

The fact that Leeds had more commercial income than half the clubs in the Premier League shows that the potential here is significant if the club is promoted.

Total income over £40 million is very impressive for a club not in receipt of parachute payments and should ensure Leeds are competitive at the top of the division regardless of whether they go up.


Overall costs for Leeds increased significantly in 2018 and it will come as no surprise to fans that this was driven mainly by a rise in player costs.

Staff costs rose by over £10 million in 2017/18 although this would include redundancy payoffs for Thomas Christiansen and Paul Heckingbottom (along with their coaching staff).

Nevertheless, despite this increase Leeds were only about mid-table in the Championship wage table last season, as the clubs with parachute payments were able to afford higher sums to players and management.

In terms of wage control Leeds, despite the increase in costs, only paid out £77 in wages for every £100 of revenue, compared to a Championship average of £108.

For any club in the Championship it is a constant battle between gambling on player investment to increase the chances of promotion which if unsuccessful could put the whole future of the club in the balance.

Financial Fair Play (FFP) in theory was introduced to try to prevent this but doesn’t seem to have worked in the Championship to date, with last minute rescues of the likes of Villa and Bolton being the only reason these clubs haven’t gone into administration or worse.

Birmingham being fined 9 points is hardly surprising given that the club spent more than twice their revenue on wages, what is surprising is that other clubs have not been subject to a similar fate.

In terms of transfer fees, these are spread over the life of the contracts signed by players in what are referred to as amortisation costs.

Ezgjan Alioski was signed by Leeds for £2.2m from Lugano in August 2017 on a four-year deal, so that would normally work out at £550,000 (£2.2/4) a year in amortisation costs.

Leeds total amortisation cost, which is the figure that represents all transfers, increased by 50% in 2017/18 as the club invested in Forshaw, Jansson, Saiz, Roberts, Alioski and others for million pound plus transfer fees.

Spreading transfer fees via amortisation reduces the volatility of the cost of transfer fees in a single season and reflects a club’s long-term spending on players.

Amortisation and wages together as a proportion of revenue was 97%, which meant that Leeds had little left to pay for the other day to day running costs of the club, such as rent (£2.2 million) depreciation (£1.6 million) and so on, with ‘other costs’ in total coming to over £17 million.

Profits and losses

Subtracting costs from revenue gives a profit or loss figure for the year and Leeds had an operating loss from day to day transactions of just under £20 million for 2017/18.

Big losses are incurred in the Championship by nearly every club as owners commit to pay the wages and transfer fees on signings that they hope will result in promotion.

In the Championship losses were £505 million last season (and that is without Sunderland, Sheffield United and Bolton) which shows the extreme pressures of trying to compete in the division.

Championship clubs all made operating losses last season and the only way for these to be financed is via player sales or owners investing money via loans or shares.

Yearly profits from player sales have been beneficial for Leeds recently, and Liam Bridcutt’s and Chris Woods’ departures, along with some sell on clauses on previous disposals, were the main drivers of the £18 million profit on player sales last season that absorbed most of the operating losses.

Championship clubs managed to recoup over £210 million of the losses via player sale profits but this still leaves a big gap to be plugged by owners.

Letting players go does generate cash but also has a detrimental impact on the quality of the remaining squad but is a financial necessity at times, fortunately for Leeds good cheap recruitment and an impressive academy scheme have improved the quality of football this season.

Excluding costs such as amortisation and depreciation (depreciation is the same as amortisation except this is how a club expenses other long-term asset such as office equipment and properties over time) then another profit figure called EBITDA (Earnings Before Income Tax, Depreciation and Amortisation) is created. This is liked by professional analysts as it is the nearest thing to a cash profit figure.

Struggling to generate cash from operations is common in the Championship but is does mean that clubs must increasingly hope that owners will make up the deficit.

EFL rules allow clubs to lose for FFP purposes (officially called Profitability and Sustainability in the Championship) £39 million over three seasons, but some costs (infrastructure, academy, women’s football and community schemes) are excluded from the calculations.

An estimated P&S profit of £1.6 million over the last three seasons suggest Leeds, even if they are not successful this season, are well within the limits and would not need a fire sale of players during the summer of 2019.

The actual details of P&S calculations for EFL Championship clubs are unknown, prompting much speculation and anger amongst fans who are unsure whether or not their club is subject to ‘soft’ sanctions, which are not publicised, but Leeds are almost certainly not being punished for these given the relatively prudent way the club is run.

Player Trading

Leeds spent £28 million on new signings in 2017/18 on many signings as the two new managers tried to mould squads. The sale of Chris Wood offset a large proportion of these player purchases.

The large spend on players is why the amortisation charge in the profit and loss account is so high. Fans often point out that clubs also sell players and that net spend is a better measure of a club’s investment in talent but again Leeds here have been relatively modest by the standards of the division.

Leeds have been building up the squad in recent seasons, which had a total cost of £37 million at then end of 2017/18. The appointment of Bielsa as coach in the summer of 2018 resulted in a further estimated net spend, mainly on Patrick Bamford, of about £4 million.


Clubs can obtain funding in three ways, bank lending, owner loans (which may be interest free) or issuing shares to investors. The tie up with SF49’ers brought in share investment of £11 million and there was net borrowing of about £2.5 million in 2017/18.


Leeds had a hit and miss season in 2017/18 on the field, but the club’s strong revenue growth meant that it was in a strong position from an FFP perspective at the start of the current campaign.

It’s on a knife edge at present whether the club will go up automatically, but a playoff position is guaranteed. Promotion to the Premier League would see revenues rise by at least £100 million and the club is in a strong position given the size of the city and its history to sign some lucrative deals.

Leeds are certainly one of the best three teams in the division this season, but their biggest problem might arise is if they have a chance and fail to make automatic promotion on the last day of the season if the playoff positions are already finalised, as their potential opponents could rest the squad for the final fixture.

Promotion this season will be great for fans, but even if they fail to do so the club is in a strong position financially both in the short and medium term from the figures it has published.

Date Summary

Leeds United 2017: Cardboard box? You were lucky…

It may seem an unusual thing to say, but we feel a bit sorry for many Leeds fans. They’ve been shafted more times than Linda Lovelace in Deep Throat and were once so desperate for an owner they even cheered when Ken Bates took over the club.

2016/17 proved to Massimo Cellino’s reign of jaw dropping entertainment at Elland Road, as the colourful (crooked) Italian sold initially 50%, then the whole of the club to fellow Italian Andrea Radrizziani.

Fans were initially excited about the change of control, as Cellino had been tight with the cash (something that most Yorkshire folk would usually approve of) during his time at the club.

Summary of key figures

Income £34.1 million (up 13%)

Broadcasting income £7.6 million (up 45%)

Wages £20.7 million (up 14%)

Loss before player sales £8.8 million (up 26%)

Player purchases £6.8 million

Player sales £9.0 million

Borrowings £25.1 million


In the Championship the amount of total income is effectively split between those clubs that do and do not receive parachute payments.

Leeds generated the highest earnings of the non-parachute payment receiving clubs, but this was not enough to get the club into a playoff position, although Brighton and Huddersfield, both of whom were not in receipt of parachute payments, were promoted, and Sheffield Wednesday made the playoffs.

Only Newcastle (surely Mike Ashley has nothing to hide?) and recently sold Barnsley have yet to announce their results for 2016/17. Most clubs are showing higher income than in the previous season. The average income of the 22 clubs that have reported to date is £28.6 million. This compares to an average of £22.9 million the previous season.

The main reason for the increase in overall income is due to a combination of higher parachute payments, a new TV deal in the Premier League, which drips down to the Championship in what are called ‘Solidarity Payments. Championship clubs earn about £4.3 million a year from solidarity payments, plus their earnings from the Football League TV deal which are worth a minimum of a further £2 million. Championship clubs also pick up £100,000 for each home game broadcast on Sky, and £10,000 for each away game.

The English Football League (EFL) negotiated a flat percentage of all future TV deals with the Premier League (PL) a couple of years ago. This at the time seemed to be a great deal, but subsequently the PL sold its domestic rights for 10% less in 2019-22 than the current three-year arrangement generates.

Like all clubs Leeds earn their income from three sources, matchday, broadcasting and commercial/sponsorship.

Leeds have shown growth in the all three income areas, but to give some context, their income of £34.1 million is still nearly £8 million less than their final season in the Premier League in 2003/4, when income was £41.9 million.

Matchday income in 2016/17 was up 24%, as the average attendance increased by 6,000 to 27,698 as the club just failed to reach the Championship playoffs. Cellino’s promise of a 25% reduction in season ticket prices for the following season if the club failed to reach the playoffs also contributed to this increase. This could have a knock-on effect on matchday income for 2017/18.

The club have kept prices relatively static for a few years and generated £367 per fan from matchday sales.

Leeds therefore had the third largest matchday income total in the division, although we anticipate this falling to fourth when Newcashley United finally publish their results.

Broadcast income was up 45% to £7.6 million. The baseline figure for clubs in the Championship is about £6.3 million, plus an additional £100,000 for every home, and £10,000 for every away game that is broadcast live on Sky. Leeds are always popular with Sky as they generate decent viewing figures.

The impact of parachute payments for the top six clubs in the chart is very evident. Recently relegated Norwich earned £7.50 from broadcasting for every £1 earned by non-parachute payment clubs.

Leeds commercial income fell slightly but is still an impressive £16.4 million. This figure is distorted to a degree since 2015, when Massimo Cellino threw one of his hissy fits and took the catering income in house (it had previously been outsourced), which was responsible for nearly all of the increase from 2015 to 2016 in this area.


The main costs at a football club are player related, wages and transfer fee amortisation.

Leeds wages increased by 14% in 2016/17, as new contracts for existing players plus some fresh signings increased the costs.

Leeds wage bill places it in the bottom third of clubs in the Championship in 2016/17. Whilst it won’t surprise fans that clubs in receipt of parachute payments are paying out big money still in player wages, we suspect a few Yorkshire eyebrows will be raised when they see their club behind the likes of Sheffield Wednesday, Bristol City and Birmingham (although with ‘Triffic’ Harry Redknapp in charge of the latter for a while in 2016/17, perhaps not so surprised by that club paying out more money to players).

For a club in the Championship to be paying wages that are effectively the same as five seasons previously is unusual. Most clubs get sucked into the vortex of trying to attract new players with more money and this becomes self-perpetuating.

Leeds paid out £61 in wages for every £100 in income. This was the second lowest ratio in the Championship, and Reading’s would have been far higher had they not been in receipt of parachute payments. This figure has fallen significantly under Cellino, partly due to the increase in catering income figure but also because he was clearly keen on keeping costs as low as possible with a view to selling the club to a new owner.

Over half the clubs in the Championship pay out more money in wages than they generate in income. This is under the auspices of Financial Fair Play (FFP). It is scary to think what would happen if FFP didn’t exist.

Amortisation is how clubs deal with transfer fees in the profit and loss account. When a player signs for a club the transfer fee is spread over the life of the contract. Therefore, when Leeds signed Kemar Roofe from Oxford United for £3 million on a four year contract the amortisation charge was £750,000 a year for four years (£3m/4). The amortisation fee in the profit and loss account therefore includes all players who have been signed for a fee (assuming they are still in their initial contract).

Leeds’s total amortisation charge has risen steadily in recent years, reflecting the brakes slowly being removed from the transfer budget. They are in the top half of the division in relation to this cost, but some way behind clubs with parachute payments.

If the amortisation costs are added to wages, then total player costs for Leeds in 2016/17 were £76 for every £100 of income. This again suggests the club is relatively tight (no doubt Leeds fans will say ‘careful’ rather than ‘tight’ in terms of spending whatever it takes in terms of player investment to get back into the Premier League. There are many clubs who are spending £140 plus on this area.

One cost that Leeds have which is not common to all clubs is rent. The club paid £2.1 million in rent during 2016/17 for Elland Road and other facilities. The club did say that they had repurchased Elland Road on 28 June 2017, but there is no sign of this in the accounts or the strategic review of the year which was signed off by Radrizzani on 2nd March 2018.


A screenshot of a cell phone Description generated with very high confidence

A further look at the club website reveals that Greenfield Investment Pte Ltd, also owned by Radrizzani, and based in Hong Kong (we think) , are the actual owners of Elland Road, so it’s not quite as transparent as it initially seems. Greenfield are themselves owned by Aser Group pte Ltd in Singapore.

How much rent is being charged by this company to Leeds United Football Club Limited has not been revealed, however a note to the account suggests that rent will fall from over £2.1 million a year to about £760,000, which could mean extra money for the manager to spend on players and wages.

Leeds sources suggest that the rent is for Thorpe Arch rather than Elland Road itself.

Profits and losses

Profits (or more commonly for non-Premier League football clubs losses) are income less costs. The bad news for Leeds is that the club lost a lot of money last season from day to day trading.

The good news is that they managed to sell Lewis Cook to Bournemouth, which brought in a profit of nearly £9 million, which offset the operating losses.

Operating losses are income less the running costs of the club (wages, maintenance, insurance, amortisation etc. and they are before deducting interest costs and player sale profits. In 2016/17 this worked out as £8.8 million, or £169,000 a week. This is slightly higher than the previous season, but still a lot of money to find on a regular basis. These losses are before taking into consideration the one-off cost player write down of £332,000, for someone who was signed for a fee but subsequently turned out to be a bit shite Christian Benteke. We don’t know enough about Leeds to know who the player(s) might be, but Leeds fans will no doubt have a few suggestions.

The previous season Leeds had one-off costs of nearly £4 million in legal and other fees as Cellino fell out with kit suppliers Kappa, previous employees, Sky TV, the Football League and anyone else who didn’t share the enlightened views of the Italian tax evader.

Being in the Championship is tough financially, and this is reflected in Leeds losses over the past few years.

Their total losses for the last five seasons are nearly £56 million, and this excludes one off costs of £6.4 million during that period too.

Fortunately for Leeds the club have managed to sell players on a regular basis at a profit of £25 million during this period, but it still leaves a substantial loss.

Under FFP rules, Championship clubs can make a maximum FFP loss of £39 million over three years in the Championship. Leeds have a pre-tax loss of just £10.2 million over the three-year period, helped by profits on player sales of £21.5 million over that period.

Additionally, some costs, such as infrastructure, academy and community schemes, are excluded from the FFP calculations. Leeds have a category two academy, which costs about £1.5 million a year to run according to our sources, so this, combined with other allowable costs, means that Leeds easily are within the FFP limit for the three years ending June 2017.

Assuming that Leeds have not gone crazy in terms of higher wage deals in 2017/18, they should be in a much stronger position than most clubs in the division in the forthcoming transfer windows.

This is because many clubs have spent big and gambled on promotion this season (2017/18) and will have to scale back investment in the next few windows to ensure FFP compliance. There is a caveat here, this will all depend on the extent to which the owner is willing to back the Leeds manager in the transfer market during the next couple of windows.

Player trading

The accountants treat player trading in a weird way in the financials. We’ve already shown that when a player is signed, his transfer fee is spread over the life of the contract. When the player is sold, the profit is shown immediately, and it based on the player’s accounting value, not the original transfer fee.

This creates erratic and volatile figures in the profit and loss account.

If we instead focus on the actual purchase and sales, the following arises

Over the last five years Leeds have bought players for £26.3 million and generated sales of £27.1 million. This is before the sale of Chris Wood to Burnley in summer 2017.

If Leeds are promoted to the Premier League there are additional transfer fees of £6.3 million payable, as well as player bonuses of over £16 million.

Debts to and from the club

Trying to make out the extent of Leeds debts is tricky. The easy bit is player transfers, where the club is owed £7.8 million (likely to be Bournemouth for Cook) and owe other clubs about £3.9 million.

The club is owed a mysterious £2.3 million in the form of ‘other debtors’ that the club is pursuing through the courts. Who this party is we don’t know, although Leeds fans will no doubt be able to point the finger at the party involved, and that finger is mainly being pointed at former owners GFH, who apparently have some contested debts. Whilst the outcome of the dispute is uncertain, one this is guaranteed, the lawyers will make plenty of brass from the dispute.

The club borrowed £16.5 million in the year, mainly from the owner, although £5 million of this was converted into shares. Total borrowings look to be about £25 million of which £14.5 million is to the owner.


The Cellino regime of chaos ending was a positive for Leeds in 2016/17. New owner Andrea Radrizzani had a huge amount of initial goodwill which has evaporated to a degree as the club has dropped from top of the table to nowhere in the past few months. This, coupled with the new club crest which turned the club into a laughing stock has meant that the upcoming summer is an opportunity to rebuild bridges with the fan base.

The good news is that the club is in an excellent position to invest heavily in the player market due to being significantly under the FFP loss limit. The big question is whether the owner will be prepared to dig deep and spend to bring in the calibre of player required for Leeds to be promotion contenders in 2018/19.

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