The Leeds United Supporters Trust have released an article on their site, in which Rob Wilson, referred to as a “football finance expert” by the BBC, and interviewed by the YEP in March when the last set of Leeds’ accounts was made available, comments on various aspects of Leeds United’s finances.
The accounts that Wilson commented on in March have since had to be re-submitted by the club after L.U.S.T.’s financial experts found several errors. Wilson told the L.U.S.T:
I found your findings concerning. Your claims expose some, to be frank, poor attention to detail on behalf of the auditors and do not fill me with confidence in the firm.
Nevertheless, Wilson believes that the accounts covering the 2010-11 season (our first season back in the Championship) are good from a business point of view. However, Wilson also commented that the club could be more ambitious in playing-side investment:
There is a degree of balance that is needed and while it is good that the financial position is good I do believe that there is flexibility now to be more aggressive in the transfer market.
I would expect the breakdown of expenditure to be more heavily focused on the football and first team squad side of the business as opposed to other things,
He also judged that a wage-turnover ratio of around 51% is not something to be disagreed with, and is “enviable”. Wilson agreed with the L.U.S.T. when they asked if a 60% wage-turnover ratio was sustainable.
The Supporters Trust, meanwhile, comment:
Both Rob and ourselves feel that the concentration should be on football as our main business activity, the core of the club.
Unfortunately this great financial achievement [the 51% ratio] meant that we only finished 14th last season, so it is unlikely that Reading and Southampton, while only managing to attain ratios of 90% & 100%, looked down on us from their promotion spots with much envy; nor would Norwich the season before with an 80% ratio. We do not advocate spending beyond our means to achieve the goal of promotion like these clubs have done; we are not in the fortunate position of having owners such as they do that have kept them afloat with cash injections.
The L.U.S.T. also offer an estimate of the cost of dropping attendances and match-day spending, which they put (based on member feedback) to uncertainty that the income will be invested in the team. The L.U.S.T. put this figure at £2.5m, while an increase of wage-turnover ratio to 60% would cost only £1.5m.
Some other interesting figures to come from that article include Leeds’ spending on developments since exiting administration in 2007 until June 2011, £16.1m, Leeds’ income from player sales in the same period, £13m, and Leeds’ spending on players in the same period, only £7m.
Rob Wilson also commented on L.U.S.T.’s cash analysis, concluding:
The club needs to sell more tickets and attract better sponsorship. To do this you need some more team investment and, in my opinion, a better more associated relationship with the fans.
The article also covers issues to do with the Takeover, Due Diligence, and covers the topics summarised here in more depth. View the full article here.