Someone on Twitter sent me an article published publicly by Alex Stevens that demonstrates how Leeds United’s financial figures have been taken by some fans as “stunning” and tell the tale that big spending is to come. He qualifies these fans by quoting the most stunned as
@LeedsFanz – a Leeds fan
@Chris78901 & @mac123_m – both Nottingham Forest fans
@waynemaw – who actually questions the accounts rather than thinking them stunning
@Holdo1 – who is impressed despite not being a Leeds fan
@AshFinney1 – a Sheffield Wednesday supporter
So Alex has found one Leeds fan to support his article. I’m a Leeds fan and I think I can give the club better credit.
Critique
I think Alex has done an injustice to both fans and Cellino in his article by trying to make a “silk purse” out of a pig’s ear through not understanding just what the charts mean. Here I try to rectify what Alex missed and give true credit to the club for what has been a great turnaround. New readers may have missed my earlier article regarding the turnaround which can be found here Leeds United’s Turnaround.
Alex correctly says that Leeds has the lowest wages to turnover ratio in the Championship and he says fans are hailing this low investment in the team, as the one Leeds fan he mentions indeed is. He does the club a disservice though by failing to mention that these wages include extra staff employed to provide matchday catering and the real wages are well over £1m lower: come on Alex lets ensure the club gets full credit – real player wages to turnover are 50% not the inflated 59% that @SwissRamble has mentioned. If we’re going to give credit for under-investment in the team last season that finished a lowly 13th place in the table let’s give full credit to the cost cutting please!
Alex is clear when he says @SwissRamble’s charts confirm @KieranMaguire’s conclusion that LUFC had little cash (it having drained away from over £11m for the previous two seasons to just £2m): this of course means Leeds United are self-sufficient with no new money being invested by Cellino and are in far better health than other clubs because, as we all know, a successful company makes its cash work for it rather than languishing in a bank account without an attached rate of return. The club is to be congratulated for making such good use of all spare cash and Alex could have made more of this.
Alex shows how well Leeds United did with revenue and correctly states that the club earned £7m more commercial revenue than any other club and £5m total more than any other rival: such a shame that he failed to applaud the club for getting to within 10% of the turnover that Ken Bates previously achieved and he should really have made more of this great increase: an extra £5m increase in revenue, added to player sales of almost £3m, will surely reduce the previous £12m operating loss to less than the FFP target of £5m – Alex doesn’t make enough of this fantastic increase in revenue that brings the club well inside FFP targets for the first time since Ken Bates sold us.
Neither does Alex mention that the loss was increased above this apparent £4m, nor explain why it was so much higher. I know a lot of work was performed by the club to get the loss to be what it was and to not give due credit for the achievements is an error, I feel.
Alex correctly states that the 2016 accounts show why ESL sold 50% of the club to Radrizzani in late December: the key indicators are, as he has shown, revenues have increased towards a breakeven point and the playing squad no longer needs much of the turnover to achieve 13th place, so the club is an attractive asset for any businessman; ESL’s accounts show that their money available to fund the club has run out and now is the perfect time for them to cash in by selling half of this self-sustaining club that only needs around £10m new cash injected every year.
As Alex points out, these accounts demonstrate that having little cash in the bank left the club well placed to invest in the squad for this season and the club immediately followed this up by recalling Lewis Cook from pre-season training in Ireland to sell him. Alex does the club a disservice in failing to mention that ridding the club of Lewis’s wages is the reason they were well placed to invest in the playing squad during the summer. I think he could have made more of this.
Alex then talks about Cellino’s reputation and I feel he missed a trick in ensuring Bell and Mansford were written out of any praise for running the club that has come from some other quarters. Similarly, I feel he missed a chance to praise him for not sacking Monk early in the season – this was surely a masterstroke by Cellino and Alex should have made much, much more of it and doled out the praise.
Alex then goes on to discuss this season and how Leeds’s chiefs are bullishly optimistic of turning a profit after ESL sold 50% to Radrizzani. Maybe Radrizzani will achieve this but I think Alex shouldn’t credit Radrizzani yet for something we don’t know about and stick to Cellino’s era.
Ommissions
I’m surprised also that Alex failed to credit the club, as I have done on many occasions over the last year, with the reduction in debt: I said many, many months ago that Leeds’s debt position meant it was better placed than any other Championship club to survive in the Premier League: I think Alex should have joined me in this praise.
I’m surprised that Alex didn’t mention how Leeds has spent large sums maintaining Elland Road and how that has impacted on the figures: without such spends the club could have declared better profits but chose to look to the future and invest in repairs. This is something I feel is significant and well worth mentioning, I wish he had joined me in doing so.
Why didn’t Alex say we were 9th in the table of player amortisation? These stats are for the 2015/16 season when we were still almost mortally wounded from GFH and is surely something to shout about: I am proud to be associated with a club that managed that, shame Alex doesn’t feel the same.
Why didn’t Alex explain or justify the administration expenses? They form the backbone of the operating costs of the club and are, in my opinion, entirely reasonable and the club can be proud of them: Alex doesn’t mention them at all. I’ve argued many times the expenses are transparent and equitable, giving my reasons, but Alex feels it better not to mention them at all.
Swiss Ramble says his charts show that highest wages growth was at clubs chasing promotion: why was there no credit given by Alex to Leeds United for not chasing promotion and reducing wages instead? Surely credit should be given to the club for sacrificing promotion and reducing wages instead – they achieved both targets admirably?
I can understand why the attendance figures were not mentioned: having dropped to fifth in the table and being below the Wendies is nothing to be proud of. Even our matchday income was 20% less than the Wendies.
Why wasn’t the club singled out for praise for being fifth in the EBITDA table? That is a major achievement and something that all fans should be proud of: this one metric above all others shows the strength and improvement of Leeds United’s financial position yet it was completely ignored by Alex.
There’s lots of good news in the latest Leeds United’s accounts – we, as fans, deserve articles that correctly state the position from a factual base.