Leeds losses reach record levels
Leeds United Football Club has announced record pre tax losses of £49.5million, a record for an English football club.
The massive losses come on top of the £77million long term debts that led to a fire sale of Leeds stars over the last two summers.
Financial worries continue to mount with news that revenue slumped by a fifth to £64million. This has been largely attributed to a fall in television revenue and merchandise sales.
However, while the last year appears to have seen financial problems grow, there are also signs that the new executives at Leeds are turning the club’s financial problems around.
Professor John McKenzie didn’t take over the running of the club until late in the reported year, and since then he claims to have reduced costs by £20million.
One of his cost cutting measures is a package of redundancies worth around five million pounds. This added one off costs to the books but will save the club money in the future. Likewise one off costs involved in the removal of Terry Venables as manager are believed to have run into millions.
The new board have reported that they are also looking beyond cost cutting, announcing that there is no longer a need to sell off the best of the playing staff. They expect a cash injection of nearly five million pounds to come from two sources this year, and are continuing to negotiate a deal with their two main creditors.
Alarmingly, the future of the club may no longer rest in the hands of the board as greater woes could be in store next year if Leeds fail to stave off relegation.
The side are presently second from bottom with only two wins all season. Although the board has indicated that no more players need to be sold, it seems unlikely that they can find the cash to bring in new stars.
The cost of relegation for a club is estimated at £20million, and might be enough to see creditors lose faith and close in on the club. Indeed some fans appear to believe it is only the name of the business that has prevented this already.
John Boocock the Leeds United Supporters’ Trust spokesman commented: ‘We have this unserviceable, unmanageable debt and if we were making nuts and bolts the receivers would have been in called in by now.’
