Football finance expert Kieran Maguire has offered his thoughts on Leeds United’s financial situation ahead of the transfer window.
The Whites face a potentially uncertain summer ahead due to their failure to win promotion back to the Premier League, after a 1-0 defeat to Southampton in the play-off final on Sunday.
It is now expected that some of Leeds’ key players, including Crysencio Summerville, will move on, something which owners 49ers Enterprises have already acknowledged needs to happen.
Reports emerged even before the play-off final that Leeds would have to raise £100 million in sales if promotion wasn’t achieved, and those may have to go through before June 30.
June 30 is the date that effectively brings an end to the financial year in football, and so any sales after that would not actually be shown on the accounts until 2026.
Kieran Maguire shares what Leeds can expect from transfer window
As shown from Leeds’ latest accounts, it is already clear the club owe an astonishing £190 million in unpaid transfer instalments.
Speaking when they were released a couple of months ago, Maguire criticised former owner Andrea Radrizzani for effectively using the ‘Leeds United credit card’ in order to sign players.
Leeds are now certainly feeling the effects of that strategy, though only £73 million of that £190 million figure is owed this summer, which should ease any potential concerns fans may have.
When analysing Leeds’ financial position on talkSPORT earlier today, Maguire does not believe the club will have any issues complying with the EFL’s PSR rules, despite the drop in parachute payments.
Maguire also claimed Leeds shouldn’t have much of an issue in paying off those instalments due to the backing of the 49ers, as well as the saleable assets in the squad. However, don’t expect the club to go too crazy in the transfer market.
He said: “Their allowable losses as far as FFP is concerned will drop, it will drop to £61million over three years. I think Leeds are actually in a reasonably good position in regards to that, they have sold players in the past 12 to 24 months.
“There is a slightly more concerning issue, which again I don’t think is a crisis but it is far from perfect. When Leeds were in the Premier League they spent £355million over three seasons and a lot of those deals were on credit.
“That’s perfectly normal, but if you get relegated you’ve not got the cash that is coming in from the Premier League to the same extent. At the end of last summer, they owed £190million in outstanding transfer fees, which will have to be settled over 2024 and 2025 and possibly some over 2026 as well so that is more of a cash management issue.
“That then comes down to the owners. There’s not a crisis because they do have San Francisco 49ers behind them and they do have sellable assets. Leeds will still be the biggest fish in the Championship next season.
“If Leeds fans thought we can go heavy in the summer transfer market, that enthusiasm might be tempered because they’ve got outstanding football debts to pay and then they’ll have to work out their wage budget over the course of next season.”
How much more money do Leeds need to raise before June 30?
Leeds are actually over halfway to raising the required £73 million to pay off the instalments due to player sales that have already taken place in this financial year.
Tyler Adams was sold to Bournemouth for around £23 million + add-ons towards the latter stages of last summer, while Luis Sinisterra then followed him permanently to the Cherries in March.
Sinisterra actually went for less than the originally agreed option-to-buy between Leeds and Bournemouth, but a new figure was agreed that saw them pay more up front.
At the very least, that means Leeds are at least £40 million of the way there to raising the necessary funds needed.
As mentioned, Summerville is the most likely of the current squad to be sold this summer and Leeds are reportedly set to command in excess of £30 million for the Championship POTS.
Though it will be gutting to see him go, if Leeds can find a club to pay the asking price, then that should reach the all important figure of £73 million.
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