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Has Cellino put Leeds on a sound financial footing?
Thursday, 25th Feb 2016 18:24 by Tim Whelan

Yesterday Leeds United put out a statement ahead of the full release of the annual accounts, claiming a big drop in the losses made in 2014-15, compared to the previous year.

The statement covers the 12 months to June 30th 2015, and Cellino said on the official website “The club is now on a stable financial footing for the first time in many years. We are confident that we can continue to make further improvements in the years ahead. We hope that we can now finally begin to focus and invest the club’s income, generated through our supporters and sponsors, into improving the quality of the playing squad and performances on the pitch.”

The headline figure is that losses during the year were a mere £2m, compared to the £23m that went down the pan in the financial year 2013-14. I’ve seen quite a few fans misunderstanding this and saying on social media that the club’s total debt is now down to £2m, but that is not the case. The figure is the amount lost during the 12 months covered by the accounts, not the debt at the end of that year.

On the face of it, it’s an impressive achievement to reduce the losses by so much, although as Cellino’s performance in 2014/5 is being compared to the chaotic GFH era, he didn’t have much to beat. And the net result was helped considerably by “an improvement in player trading”, in other words the £11m we got from Fulham for Ross McCormack right at the start of the year in question.

Otherwise there was a slight fall in revenue (excluding sales of players) but there were also big cuts to cash claimed by GFH through “invoices”, and to the wage bill, as we managed to offload some of the highest earning players. Total payments to staff amounted to £17.4m, more than 71 per cent of turnover, though the YEP are reporting the current wage has now come down to around £13m.

The result would have been even better if the club hadn’t had to pay out legal fees due to the various court cases Cellino has dragged us into, and if we didn’t have to pay compensation to so many former head coaches. We’re still paying a salary to Darko Milanič, and we’re already onto our third head coach since he left!

The statement said that Eleonora Sport Ltd had injected a total of £42.96m, but this figure includes his initial purchase of 75% of the shares from GFH, when he overpaid after failing to do any proper due diligence into the state that the Bahrain bank had left the club in. Eleonora converted £6.5m of their loans into shares during the 2014-15, which increased his ownership of the club while reducing the amount reported as debt.

The statement didn’t say how much was still owed to GFH, but did re-iterate that Cellino will not be buying Elland Road until he has managed to secure 100% ownership of the club. Meanwhile the current owners of the stadium will continue to increase the rent year on year, under the terms agreed when it was sold by the Krasner consortium in 2004, at a time when the purchaser had them over a barrel with cash urgently needed to save the club.

So can Cellino deliver on his promise to continue to improve the club’s financial situation? Much will depend on what we can achieve on the pitch, but the attendance of only 17,103 on Tuesday night shows that many Leeds fans have become disheartened by our current league position and awful performances at home. But at least his ridiculous category A prices will ensure that those fans who do turn up are still making a financial contribution.

Reducing the cost base is admirable, but if Il Presidente is going to continue to sell our best players without re-investing the proceeds in the squad then it’s difficult to see how the club can begin to move forward.

Photo: Action Images



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