Football finance expert predicts 'tough year' with 'substantial' Leeds United loss as new accounts set for release

Leeds' 2023/24 accounts are expected to be released to the public at some point over the next few weeks and will paint a picture of the club's financial health after dropping out of the top flight.

United are expected to report a 'substantial' operating loss according to Maguire, but he believes profits from player sales will offset those losses to an extent.

Fortunately, there are not expected to be any Profitability and Sustainability [PSR] breaches, which means Leeds are not subject to sporting or financial sanctions such as points deductions, transfer embargoes or fines.

Due to the volume of the Premier League's annual central distribution payments paid to each club in the English top flight, which tend to be around £95 million per season, Leeds' relegation saw broadcast revenues fall significantly.

Parachute payments for newly-relegated clubs soften the blow somewhat, however, in the first year outside the Premier League they are only 55 per cent of what a club would ordinarily have received, had they avoided relegation. These parachute payments fall to 40 per cent in the second year outside the top flight, followed by a final 20 per cent allowance in year three.

"I suspect 23/24 will have been a tough year for Leeds financially," Maguire told the YEP. "The step-down in terms of broadcast revenues, despite parachute payments, is going to hit the club in the region of £60-65 million. There'll be reductions in terms of commercial income, but it'll still be far higher than anybody else in the Championship and higher than a good proportion of the Premier League as well, such is the value of the Leeds brand.

"The wages will be the key driving factor in terms of costs. We don't know the extent to which there will have been relegation clauses embedded in player contracts. A few player sales will have absorbed a lot of the operational losses, there's no indication of any PSR [Profitability and Sustainability Rules] breaches and certainly Leeds had to sell before they could reinvest over the course of the summer and we saw that in relation to Archie Gray, Georginio [Rutter] and others."

Leeds inserted wage reduction clauses into players' contracts in the event of relegation which should see the club's wage bill drop from £145 million, as was reported in the 2022/23 set of accounts. A conservative estimate would see Leeds' wage bill fall by approximately 40 per cent to around £90 million in 2023/24.

"I think the operational losses will be substantial but the player sale profits will have offset that to a large extent," Maguire added.

Leeds will most likely post a loss for 2023/24 but this latest set of accounts will not reflect the sales of Crysencio Summerville and Georginio Rutter, among others. This means they will be a reflection of the club's financial health at the end of the 2023/24 accounting period, which fell on 30 June last year, as opposed to the date upon which they are released.

Subscribe to Inside Elland Road, with Graham Smyth for unique, behind-the-scenes Leeds United coverage, expert analysis and exclusive interviews