THE immediate future of Leeds United is uncertain, largely because we don’t yet know if, and when, the 2019-20 football season will be played to conclusion. When the world stopped turning, Leeds were seven points clear of third-placed Fulham in the Championship, and quite naturally, their fans are now hoping the campaign is completed so their club can reclaim a place in the top flight.
It’s not just the current season that is in question, however. Leeds could be taken over by Qatar Sports Investments (QSI), a move that will undoubtedly propel the club to a new level. Nothing will take place until QSI know what’s really happening to Leeds, whether they will return to the Premier League or if highly-rated coach Marcelo Bielsa will stay at Elland Road.
Leeds recently announced their financials for 2018-19 and they revealed a club going through an ambitious period but one that probably cannot sustain its current expenditure. The Championship, as we all know, is a division that spends too much of what it earns and most clubs have aspirations to join the big league. Consequently, many are prepared to flirt with damnation to get there. Leeds, big club they may be, spent 94% of revenues on their players in 2018-19, not the worst wage-to-income ratio in the division, but a perilously high level of risk.
Most aspects of Leeds’ finances are on an upward trajectory. Passion for the club has been rekindled since the arrival of Bielsa, attendances climbing by 8% in 2018-19 to the highest average (34,033) since 2004. Bielsa doesn’t come cheap, but he’s a manager whose cult-like reputation is greater than his achievements. He’s also permanently packing his bags and heading off somewhere else for a new challenge. Bilbao (2 years), Marseille (1 year), Lazio (2 days), Lille (6 months) and now Leeds (18 months). He’s on the brink of genuine success at Leeds should he decide to stay at the club, but his track record suggests he won’t be around for a third season. At 64, his options are surely drying-up and if he was to leave, it would be very much a case of unfinished business in Yorkshire.
Leeds’ wage bill has increased by around 50% since Bielsa arrived at the club. In 2016-17, the wage-to-income ratio was 60%, with revenues totalling £ 34 million. In 2018-19 revenues climbed from £ 41 million to £ 49 million (+20%), but wages soared by 47% to £ 46 million, in other words, expenses are currently outstripping income growth. Promotion would solve some of these problems quite easily – as the club’s owner said, going up to the Premier would be worth around £ 200 million to Leeds United.
Leeds’ revenue growth demonstrates, back in the Premier, they will have the potential to be one of the country’s top clubs – especially if that additional investment pours in. Commercial income, for example, was up by 24% in 2018-19 to £21 million, the highest in the Championship.
Overall, the club lost £ 21.4 million in 2018-19, a 500% increase on 2017-18 and their worst result since 2014 when they lost £ 23 million. Furthermore, Leeds’ cash reserves fell to just half a million while debt rose by 75% to £ 36 million, £25.6 million of which came from chairman Andrea Radrizzan.
There’s little doubt that Leeds have the ability and possible resources to become a Premier League club, but their current model cannot be maintained unless they secure promotion. The Coronavirus has exposed the fragility of football finance. With the game suspended and clubs feeling the economic strain, nobody can predict the state of play when normal service is restored – if indeed, it is resumed. One can only assume that Leeds, like many of their peers, have also come under pressure given Bielsa and his players took a pay cut to help other staff at Elland Road.
A club of Leeds’ size has a legitimate claim to a Premier League berth, but as often happened in the past, events appear to have conspired against them. It may be their fate in 2020 will not be decided on the pitch, but in an oak-panelled committee room or via a conference call over the internet.