Leeds United lost almost £10m in the 2012-13 financial year, the club’s accounts revealed today.
United posted an overall loss of £9.5m during a 12-month period which exposes the severity of the financial situation at Elland Road.
That bottom-line figure - recorded midway through Gulf Finance House’s first year as owner of Leeds and six months after the sale of the club by ex-chairman Ken Bates - was a huge fall from a profit of £317,000 in 2011-12.
Turnover at Leeds dropped from £31.8m to £28.5m, with gate receipts down by £2m and attendances reduced by almost eight per cent.
The club’s operating loss ran to a total of £11.6m but incoming transfer fees of £2m helped to ease the overall figure. United’s operating loss in 2011-12 was £3.3m.
More significantly, Leeds built up huge debts during the period between July 1, 2012 and June 30, 2013.
Close to £11.3m was loaned to the club by Brendale Holdings Limited, a Dubai-based company which is controlled by GFH.
The total amount owed to creditors at the end of June 2013 stands at more than £22m, underlining the situation Massimo Cellino stands to inherit at Elland Road.
The Italian is set to complete his 75 per cent buy-out of GFH this week and his deal with the Bahraini bank - agreed in January of this year - committed him to servicing around £24m of debt.
United’s position has weakened further since the middle of 2013, however, and Cellino faces a pressing fight to bring finances at Elland Road under control and ensure that United abide by the Football League’s Financial Fair Play (FFP) regulations.
FFP rules allow a maximum loss of £8m for the current season and failure to comply with that limit could lead to a transfer embargo next January.
United’s accounts also contain other intriguing points. Money paid to club directors in 2012-13 totalled around £750,000, an increase from £312,000 the previous year. The accounts state that Bates did not take any fee but the highest-paid director received a salary of £265,449 and a bonus for the year of a staggering £440,000.
The accounts also confirm that between March 2013 and the end of the 2012-13 financial year, Leeds effectively had no majority shareholder.
They note that “Gulf Finance House sold more than 50% of their interest to various parties and so at the balance sheet date there was no controlling party.”
GFH subsequently bought back equity in December 2013, taking its stake to 85 per cent ahead of the sale of Leeds to Cellino.
The Football League is not thought to have been notified of those transactions at the time, and the apparent sale of shares in Leeds was raised by the governing body during Cellino’s protracted battle to buy the club from GFH.
Meanwhile, in November 2013, Sport Capital - the consortium who attempted to buy United from GFH before Christmas - made loans of £950,000 and £825,000 in the space of seven days, increasing the club’s liabilities further.