Sales help Leeds make profit

INCOME from player sales helped Leeds United turn an operating loss of £1.6m into a profit of £15,000 in the last financial year, newly-released figures have revealed.

The League One club's accounts for the year to June 30, 2009, contrast sharply with those from the previous 14 months when a profit of 4.5m was posted.

In the period covered by the new balance sheet, United reached the play-off semi-finals only to be knocked out by Millwall.

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The figures, released yesterday by Companies House, do not include this season's lucrative FA Cup and Carling Cup runs, the 6m sale of Fabian Delph to Aston Villa or the sale of promising youngsters George Swan, Louis Hutton and Luke Garbutt.

Turnover for the financial period covering the 2008-09 season rose slightly to 23.535m despite gate receipts falling by more than 1m to 8.96m – a dip largely caused by the previous campaign culminating in an appearance at Wembley in the play-off final.

Income from merchandising – up by a little under 1.5m to 4.918m – helped to offset the loss of money through the turnstiles, while both commercial revenue (9.482m) and broadcasting revenue (169,000) were marginally down.

The wage bill for the 189 employees at Elland Road and Thorp Arch fell slightly to 12.281m. However, with the 2007-08 figures covering a

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14-month period as opposed to 12, United's spending on wages last year effectively rose by a little under 2m.

It is the operating loss of 1.6m, however, that will most alarm supporters – especially as in the previous 14 months the club made, before player trading was taken into account, a profit of 902,000 on a similar turnover.

Chief executive Shaun Harvey told the Yorkshire Post: "The accounts for the 12-month period to June 30, 2009, may not reveal the same financial success of the previous 14 months.

"But they are still positive in so much as the profits shown. The club's decision to invest more heavily in the playing squad was down to us utilising some of the profits from the previous year.

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"Unfortunately, we fell just short by losing to Millwall in the play-offs.

"The board of directors remain committed to achieving success on the field and achieving the growth off the field required to support that success.

"Accounts are only ever a snapshot of a financial position at any one time."

The United board have consistently budgeted for home crowds of 22,000, a figure which it was claimed would ensure the club broke even.

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Yesterday's accounts – covering a season where the average crowd was 23,812 – suggest otherwise, however, to underline the need for Leeds to escape the third tier as soon as possible or face having to sell more players.

Large overheads such as the near 2m rent payable per annum on Thorp Arch and Elland Road remain a huge millstone round United's neck that it seems only promotion to the Championship – and a subsequent increase in gate receipts, prize money and broadcasting revenue – could hope to ease.

The latest financial figures show the freehold to Elland Road can be bought back for a little over 14m from landlords, Teak Commercial Limited, and that an independent assessment has valued the land at 49m.

The accounts for the year to June 2009 also revealed that FSF Limited, the company that brought United out of administration in 2007 and who own the holding company that runs the club, is now based in the Caribbean island of Nevis and not the Cayman Islands as was previously the case.

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The accounts also reveal the current playing squad at Elland Road is valued at 8.76m, an assessment that was made on September 2 last year by seven members of the senior football management team. Delph's transfer value is not included as the midfielder had already joined Aston Villa.

This compares with the net book value – basically, the value on the balance sheet that depreciates across the duration of a player's contract – of 1.765m as at June 30, 2009.

The notes accompanying United's latest figures reveal a sum of 2m may be payable in the future on a combination of player appearances and/or the club's success on the pitch – up from 450,000 in 2008.

It was also confirmed chairman Ken Bates did not receive any wages or benefits from United during the 12 months in question, while directors' pay – presumably that of chief executive Harvey – was listed as 150,000. A company controlled by Mark Taylor, a director of the football club, received 129,571.

QUICK LOOK AT LEEDS ACCOUNTS

2008-09 2007-08

To: 30/6/2009 30/9/2008*

Profit/loss

+15,000 +4.553m

Profit/loss without player trading

-1.601m +902,000

Turnover

23.535m 23.249m

Gate receipts

8.966m 10.013m

TV/broadcasting income

169,000 173,000

Merchandising income

4.918m 3.425m

Other commercial revenue

9.482m 9.638m

Wages and salaries

12.281m 12.746m

(*2007-08 accounts cover a 14-month period)