'Huge economic benefits': Sport finance expert analyses Leeds United's international transfer window

Leeds United's summer spending in the international transfer window ended on Monday night.
Leeds United's first team summer international signings.Leeds United's first team summer international signings.
Leeds United's first team summer international signings.

Leeds United’s summer transfer window spending could help propel the football club to new financial heights over the coming years, according to a sports finance expert.

The Whites earned promotion to the Premier League in July and with it entered the riches of the top flight for the first time in 16 seasons.

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The financial reward of being amongst England’s elite is hefty due to the TV money involved - both from the UK and overseas market - compared to that of the English Football League (EFL).

Whites chief executive Angus Kinnear detailed in August just how much the club had been missing out in monetary terms in recent years, revealing the club will earn 50 times more by being in the top flight this season.

“We go from the £2m we receive in the Championship to over £100m,” he said.

“That’s the big one. On top of that you have the performance-related payments [per position], which are roughly £2m a place.”

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Clubs in the EFL also receive around £100,000 per appearance, compared to £1m per game in the Premier League.

The Elland Road club has invested heavily in this summer’s transfer window, following the arrivals of Robin Koch (£13m), Diego Llorente (£20m) and club record signing Rodrigo (£27m).

United also added winger Raphinha (£17m) on deadline day and have invested heavily in their development squad as they opted for quality over quantity, taking their spending to around the £90m mark.

Eyebrows have been raised over the amount of money spent in LS11 but the strategy has been backed by Dr Alexander Bond, sports finance expert at Leeds Beckett University.

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“There are absolutely huge economic benefits for the club and the city,” he told the YEP.

“As a club they have basically bought £90m worth of assets. We often sometimes forget that football players aren’t necessarily employees, because fundamentally they’re assets like any other organisation. They still have a resale value. Economically the club has kind of set themselves up to leverage that.

“It’s a bit like how Nike would invest in a new machine that turns out more trainers or whatever it might be. It’s a short-term investment for the long-term reward.

“It is that principle that it looks like and it is probably a wise strategy. That’s a very simplistic example and, in football, money doesn’t always equate success.

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“There are clubs who have been promoted and haven’t necessarily managed to make it and that’s often because they’ve made the wrong investments.

“But spending £90m is probably good in a sense that they can set themselves up to try and stay in the league - it now depends on whether it turns out to be the investment that was needed and whether they perform on the pitch.

“Even if you finish last you’re guaranteed to get around £90m just in central funds. In a weird way £90m hasn’t really over-stretched the club for that reason.”

Premier League teams surpassed the one billion mark this summer in transfer fees paid out despite concern over how the coronavirus pandemic may impact the sport.

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“I think what is more surprising is that Leeds’ buying behaviour is a bit different from a lot of the other big clubs,” Bond said of United’s transfer activity.

“I think Leeds in terms of transactions and number of signings are one of the central clubs in this year’s transfer market.

“One of the things we do is network the window and when we’ve done that Leeds are obviously one of the biggest players in that.

“They might not have spent the same as some of the big, big clubs but they’ve been very active. I think that it should hopefully set them up for success.

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“If that £90m on players helps them remain in the Premier League for five years, you’re looking at nearly half a billion even if you finish 17th in each of those seasons.

“Obviously they’d reinvest at various stages so it’s not just a flat fee, but it puts them in a place where they could consistently compete.”