Leeds United’s pursuit of Premier League leads to £62m loss
Leeds United reported a pre tax loss of £62.4m for the period 1 July 2019- 31 July 2020.
The club which updated its accounting period earlier this year and ended the 19/20 season by securing its place in the Premier League after a 16-year absence saw losses almost treble from £21.3m in 2019.
The club reported however that its turnover rose by c.£5m, to £54.2m, a growth that was largely driven an increase in both merchandising income (64%) and other commercial revenue (21%). However it had projected a £56m turnover prior to the pandemic.
Angus Kinnear, chief executive of Leeds United said: “Despite the unprecedented operational and financial challenges posed by the Covid-19 pandemic the group won the EFL Championship by ten points whilst successfully maintaining the group’s financial integrity with record commercial growth.”
The club currently lies 11th in the Premier League, 16 points clear of relegation but Kinnear warned that “the divisional status of the Club’s first team” remains the primary risk facing the business.
He added however that the board are “confident” in the commercial model that’s been built to fund a “technical set-up which can ensure Premier League retention.”
The chief executive also emphasised the ongoing risk to revenue presented by Covid-19 but added that the improvements in the “macro-health environment point to a return of crowds in the near future” which would see all revenue streams restored, with the loss of gate receipts as a result of Covid being in the region of £1.1m.
In its prusuit of a return to the top tier of English football, the club saw its staff costs increase to £78.3m for the year (£46,2m in 2019) with staffing numbers increasing by 21 despite the number of full time players reducing.
Since the end of the reporting period Leeds United has continued to secure commercial revenues, signing a two year agreement with the Chinese consumer technology brand Hisense that is headquartered in Leeds and also seeing 49ers Enterprises – the body behind NFL franchise the San Francisco 49ers – more than double its stake in the club.
The financial impact of returning to the Premier League will be visible in next years results but could according to Deloitte’s Sport Business Group provide at least £160m over the next three seasons. However, this financial boost could be in excess of £300m if the club can stay up beyond the 20/21.,
