Leeds United make loss of nearly £9m – but turnover increases

Elland Road Stadium
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Leeds United made a loss of almost £9m in the last financial year, the club announced today.

Figures released from Elland Road showed the deficit in United’s accounts rose by over £6m in 2015-16, despite marked rises in turnover and commercial revenue.

Massimo Cellino, Ben Mansford and Andrea Radrizzani

Massimo Cellino, Ben Mansford and Andrea Radrizzani

United’s overall loss of £8.9m in the 12 months to June 30, 2016 jumped from £2m in 2014-15 but remained significantly lower than the £23m figure posted at the end of Gulf Finance House’s reign as owner in 2014.

The increased loss in 2015-16 was partly down to a fall in money earned through player sales.

United made a £9.8m profit on transfers in 2014-15 - much of that money brought in through the sale of striker Ross McCormack to Fulham - but gained only £2.8m in 2015-16.

The club also lost £3.5m through what it called “exceptional costs of commercial disputes” and “exceptional stock writedown”.

The latest accounts, meanwhile, reveal the immediate costs that United will incur if Garry Monk’s side succeed in climbing out of the Championship in May. A sum of £4.75m will be paid to the creditors who lost money during Leeds’ insolvency in 2007 should the club be promoted back to the Premier League before next season.

Phil Hay

Among those disputes was the severance of a contract with former kit manufacturer Macron who Leeds replaced with Kappa on a five-year deal in the summer of 2015.

United said they were confident that similar exceptional costs would “not be repeated in future seasons.”

Despite the £8.9m loss, Leeds were compliant with Football League’s Financial Fair Play (FFP) rules and have avoided a transfer embargo since the January window in 2015.

Their total turnover in 2015-16 climbed by £6m to £30.1m, helped by catering income of £4.8m.

Leeds and co-owner Massimo Cellino moved in July 2015 to buy back Elland Road catering rights from private firm Compass, ending a deal struck while Ken Bates was chairman of United in 2012.

Administration expenses of £32.4m led to an operating loss of £7.1m, a decrease from £12.6m in 2014-15.

Gate receipts were marginally down at £8.1m while merchandise income climbed to £5.1m and other commercial revenue increased slightly. United’s total wage bill fell from £19.8m to £18.1m.

Leeds, who are in contention for promotion to the Premier League after 13 years outside the top flight, expect to make significant commercial progress in the 2016-17 financial year, helped by increased crowds at Elland Road this season and an average attendance of over 27,000.

The latest accounts, meanwhile, reveal the immediate costs that United will incur if Garry Monk’s side succeed in climbing out of the Championship in May.

A sum of £4.75m will be paid to the creditors who lost money during Leeds’ insolvency in 2007 should the club be promoted back to the Premier League before next season.

That 10-year clause was negotiated at the time of Leeds’ administration but will expire if Leeds remain in the Championship for another 12 months.

United, however, no longer face an immediate one-off payment of £13.5m to GFH in the event of promotion from the second tier.

Leeds, who owe GFH a total of £17m in loans left behind when the Bahraini bank sold a majority share in the club to Cellino in 2014, were due to pay £13.5m on the back of a return to the Premier League before 2019. The club have been servicing the remaining £3.5m in annual installments.

Today’s accounts show that the club have renegotiated their agreement with GFH since the end of the 2015-16 financial year, meaning the full amount of £17m will be paid back in annual fees between August 2017 and August 2029 and will not be affected by promotion.

The accounts also state that £5m owed to Eleonora Sport Ltd - the UK firm used by Cellino to buy Leeds three years ago - was converted into shares in the club last September.

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