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Leeds United: Whites reveal financial results
Leeds United have announced an operating loss of £1.6m for the last financial year, with player sales allowing the club to post a slim overall profit of £15,000.
United's accounts for the 12 months to June 30, 2009 reveal a huge drop in overall profit from the 4.5m made by the League One side in the previous financial year.
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Leeds' results for the 14 months prior to July 2008 suggested their finances were in rude health after their exit from administration in the summer of 2007, but the latest set of accounts from Elland Road – published by Companies House yesterday – make for more worrying reading.
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The club's operating loss of 1.6m compares with an operating profit of 902,000 in the 14 months prior to July 2008, and their overall profit has also fallen dramatically.
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Player trading generating income of more than 1.6m wiped out the operating loss and ensured the club recorded a minimal bottom-line gain.
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But the results raise the concern that Leeds' future profitability will depend on player sales unless the club can secure a return to the Championship and increase their cash-flow.
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The figures for the 2008-09 financial year do not include the sale of midfielder Fabian Delph to Aston Villa in August, the earnings from this season's Carling Cup tie against Liverpool or revenue generated by Leeds' FA Cup clashes with Manchester United and Tottenham Hotspur.
United's turnover for the 2008-09 financial year stood at 23.5m, a slight increase on the previous 14 months.
Merchandising income grew by 43 percent to 4.9million but commercial revenue and broadcast earnings showed marginal falls.
Gate receipts at Elland Road dropped by over 1million during a campaign in which Leeds lost to Millwall in the League One play-off semi-finals. Their receipts for the previous term, however, were strengthened significantly by an appearance in the 2008 play-off final at Wembley.
The board at Leeds have consistently budgeted for home crowds of 22,000 in League One, a figure which they estimated would allow United to break even.
The average attendance at Elland Road during the 2008-09 term exceeded that target by falling narrowly short of 24,000.
Director and chief executive Shaun Harvey said greater investment in the playing squad at Elland Road ahead of the 2008-09 term was partially responsible for the fall in profit.
Harvey said: "The accounts may not reveal the same financial success of the previous 14 months but they are still positive in so much as the profits shown.
"The club's decision to invest more heavily in the playing squad was down to us utilising some of the profits from the previous year. Unfortunately, we fell just short by losing to Millwall in the play-offs.
"The board of directors remain committed to achieving success on the field and achieving the growth off the field required to support that success.
"Accounts are only ever a snapshot of a financial position at any one time."
Leeds' current accounts reveal a total wage bill for playing, management and administrative staff of just under 12.3million.
Harvey received a salary of 150,000 while almost 130,000 was paid in legal fees to a company controlled by fellow director Mark Taylor. Chairman Ken Bates did not receive any wages or benefits.
United's accounts value their playing squad at 8,760,000, while the buy-back option held by the club on Elland Road stood at 14.138m on June 30, 2009.
The stadium itself is valued at 49million.
Leeds pay around 2million a year to rent the stadium and their training ground at Thorp Arch near Wetherby, a huge financial burden for a club in League One.
Among United's other liabilities is a possible future payment of 5million to creditors owed money as a result of the club's insolvency, due in the event that Leeds win promotion to the Premier League before the 2017-18 campaign.
United could also pay up to 2million in seasons to come depending on player appearances and success on the pitch.
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