Back-in-the-big-time Leeds ran up £60m+ loss in promotion season

Leeds United

By David Owen

April 5 – The high cost of escaping the second-tier Championship for the Premier League’s promised land has been highlighted once again, with Leeds United posting a pre-tax loss of a stunning £62.4 million for its promotion season.

The one-time giants of the English game ran up payroll costs of £78.3 million for the 13 months to end July in successfully putting an end to their top-flight absence after an eternity of 16 years. This eye-popping wage bill amounted to almost 145% of 2019-20 turnover of £54.2 million. It was also marginally higher than staff costs paid over the same period by the club which finished ninth in the Premier League – Yorkshire rivals Sheffield United.

The consolidated statement of financial position indicated that, while year-end cash jumped from nearly nothing to £31.7 million, short-term creditors almost tripled to £158.5 million.

A breakdown showed that £17.3 million, up from £7.8 million a year earlier, was owed to “group undertakings” – Leeds is controlled by Andrea Radrizzani, with Singapore-registered Aser Group Holding the ultimate parent company. A further £29.9 million, up from £7.7 million, was attributed to “transfer fee creditors”, who also accounted for £18.8 million of the club’s £38.6 million of long-term creditors. A further £41.5 million of short-term creditors was simply labelled “other creditors”.

Much has changed in the eight months since the year-end.

NFL team San Francisco 49ers, who had initially taken a 10% stake in 2018, were reported in January to have bumped up their stake to 37%. A note in the new accounts states that “on 24 December 2020 an investment agreement was signed with 49ers Enterprises Leeds II SPV LP for the subscription of £23 million new shares subject to the satisfaction of the conditions within the agreement”.

Aser loans of respectively £3 million and $5 million, plus accrued interest, are said to have been converted into share capital last November.

The first team has also established itself as an exciting, high-octane Premier League outfit marshalled by the revered Argentinian coach Marcelo Bielsa. Entering the final stages of the season, a strong mid-table finish is all but guaranteed.

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