A new set of financial rules could hand Leeds United what would be comfortably the biggest budget in the Football League if Red Bull and 49ers Enterprises are willing bankroll it.
By net worth, Leeds have comfortably the richest owners in the Championship in Red Bull and the investment arm of the NFL franchise San Francisco 49ers.
With an enterprise value of around £5bn, 49ers Enterprises are one of the most valuable sports teams in the world.
Red Bull, the energy-drink-turned-marketing company, record annual revenue of around £9bn meanwhile and the sports arm of their operation alone is an industry in and of itself.
Significantly, the Austrian company are aggressively expanding within football at present.
They have struck a flurry of new commercial deals with Premier League clubs, putting them in the unusual position of potentially financing direct rivals of Leeds next season.
They have also made a number of additions to their portfolio, including Japanese outfit Omiya Ardija, while they are working on a £75m takeover of Ligue 2 side Paris FC.
Most notably of all, they have controversially appointed Liverpool legend and former staunch critic multi-club model Jurgen Klopp as their new global head of football.
The scale of Red Bull and 49ers’ empires show that their ambitions are very much in the top flight.
But this week brought a major update from EFL HQ, with a key change that could affect Leeds’ budget for as long as they stay in the Championship.
Big PSR change in the pipeline
Currently, the EFL’s spending rules limit clubs to maximum financial losses of £41.5m over a rolling three-year period.
The cap was £39m, but the EFL have given clubs an extra £1.5m margin for error due to rising costs in the wider economic environment.
For Leeds, the calculation is slightly different as they have spent one of the last three seasons in the Premier League, but the principles remain the same.
However, FootBiz are now reporting that the EFL are set to accelerate plans to introduce a new UEFA-style system, just as the Premier League are expected to do from next season.
UEFA are phasing in a system that will eventually limit clubs to spending 70 per cent of revenue on wages, transfers and agents’ fees.
According to FootBiz, the EFL’s cap will likely be set at around 70 per cent.
This pivot from a profit or loss-based system to a revenue-based model could give clubs like Leeds, who are the biggest revenue generators in the division, a significant advantage.
For context, Leeds’ revenue for the last season they spent in the Championship (excluding 2023-24, for which data has not yet been made available) was £54.2m.
Like most Championship clubs, their wage bill alone exceeded their revenue that term, while their amortisation (which is how clubs account for transfers over a set period) added another £10m to the bill.
That would see them exceed the cap by quite a margin, but the reality is that the EFL will likely take a staggered approach to introducing the new system.
When it is fully phased in, Leeds’ high turnover relative to their peers in the Championship will give them far more room to manoeuvre than some clubs who rely far more on owner handouts as opposed to independently high commercial, matchday and media revenue.
Leeds’ revenue for 2024-25
Leeds have among the best merchandise sales figures in Europe, as detailed in a recent UEFA report.
They are also set to be the most televised EFL team in 2024-25, which will generate additional revenue through facility fees through the new £935M EFL TV deal.
Their Championship-record front-of-shirt deal with Red Bull, as well as gate receipts in the region of £20m, will see revenue climb to around £60m for the season – and perhaps more.
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