Leeds pay price for missing Champions League
Leeds United PLC today unveiled pre-tax losses of nearly £34m (€54m) in results described by chairman Peter Ridsdale as “very disappointing” - although the figures do not include the summer sales of Rio Ferdinand and Irish international Robbie Keane.
The Elland Road club’s failure to qualify for the Champions League for the second year running, plus their disappointing second half to the 2001-02 season, has cost them dear.
Television income fell by 7%, turnover tumbled by nearly £5m (€8m) to £81.5m (€130m), and overall gate receipts, a result of less successful cup campaigns, fell by 18%.
This was partly offset by record revenues in season ticket sales, merchandising, sponsorship and executive hospitality.
Players’ wages rose from 50% of turnover in 2001 to 66% for the last financial year, a ratio the club admitted was “too high” and needed to be reduced to a “more manageable level”.
The club’s annual pre-tax loss has grown to £33.9m (€54m) from £7.6m (€12.1m), while the pre-tax loss before interest was £28.2m (€45m), up from a loss of £4m (€6.38m).
The club claimed that last year’s high-profile court case and a spate of injuries meant they had to buy in players to cover for Jonathan Woodgate, Lee Bowyer, Lucas Radebe and Michael Bridges rather than use home-grown talent.
The results do not include the £37m (€59m) generated by the sale of Ferdinand to Manchester United and Keane to Tottenham Hotspur, or the £2.75m (€4.4m) spent to secure Nick Barmby from Liverpool, as those deals occurred after June.
Closing net debt as at June 30 was £77.9m (€124.1m) versus £39.4m (€63m) in 2001, but chairman Ridsdale was keen to place the results in a long-term context.
He said: “Despite the financial impact of failing to qualify for the Champions League and the levels of both amortisation and interest giving a very disappointing result for the year ended June 2002, we remain convinced that our long-term strategy is not only right but is the only sustainable strategy to deliver long-term shareholder value.
“Furthermore, the combination of the actions taken since the year end and ongoing actions surrounding the playing squad will help to ensure that we deliver against this strategy.”
