Leeds United’s accounts have never provided much joy to long-suffering fans, but the most recent are the worst the club has published in some time.

Submitted at the beginning of this month and available online today, Leeds United’s latest accounts show the financial state of the club from July 2012 to the end of June 2013, a period which covers the takeover of GFH Capital from Ken Bates.

The headlines include;

  • £9,949,000 total losses
  • Turnover down to £29.322m, a drop of £3.775m
  • Loans of more than £11m from GFH-owned company, Brendale Holdings Ltd.
  • Gate receipts down by more than 14%, from £11.368m to £9.721m
  • Merchandise sales down almost 13%, from £6.747m to £5.873m
  • “Other” commercial revenues down by more than 8%, from £9.665m to £8.884m
  • Rent for Elland Road and Thorp Arch cost £1.839m
  • Total debts believed to now stand at over £30m

The document makes for grim reading, highlighting the poor financial health and substantial losses which forced Ken Bates to find a buyer. It also shows the poor job GFH Capital have done in getting the situation under control and why they too, have been desperately scrambling for the exit.

It’s no secret the club continues to lose money at an alarming rate with the shortfall now believed to stand at £1m per month. This money has to come from somewhere or the club ceases to be, so while you can’t really criticise GFH for pumping the money in (by way of ongoing loans), their failure to get things under control has left behind substantial debts Massimo Cellino will now have to deal with – the big question is, how much interest is being charged on these loans and what are the terms of repayment?

Like most football clubs, the majority of our turnover (around 66%) goes on wages. An unnamed director (believed to be Shaun Harvey) did pretty well for himself, netting a bonus of £440,000 on top of his already substantial £265,449 salary. Still, it’s less than the club pay a lot of our players and Shaun Harvey did work his socks off (allegedly).

There’s a rather bizarre payment of £100,000 to El Hadji-Diouf’s charity within these accounts too. It seems pretty odd for a club to be making charitable donations while haemorrhaging money at an alarming rate, but this might just be an unusual clause in his contract?

Things can only get better?

If there’s a silver-lining to all this, it’s that our situation improves somewhat at the end of the current season. Ken Bates took out a sizeable loan against future season ticket sales to cream clad the East Stand which has now come to an end, so every penny generated from season ticket sales will go straight into the club next season (instead of whatever was left over after repaying loans like this season) – this alone puts us a couple of million pounds ahead of these accounts.

Alongside that, the contracts of several senior players (including Michael Brown and Danny Pugh) come to an end this season. Since wages continue to be our biggest expense, a reduction here is the best way to get us back on level-terms.

Also worth noting is Massimo Cellino’s plans to repurchase Elland Road and Thorp Arch. The club paid £1.839m in rent to the year ending 2013, and while it’ll cost Cellino an eight-figure sum to repurchase them, doing so adds a lot more to value of Leeds United Football Club than he’ll pay. It also reduces the clubs outgoings, which is vitally important with Financial Fair Play rules now kicking in (something Cellino will be well-versed in already since they’re a UEFA rule and Cagliari have to comply too).

The long and short of it is, Massimo Cellino has his work cut-out for him. His takeover of the club has already cost him significant sums of cash and it’s going to cost him a lot more before he can sit back and enjoy the ride. The best way to improve Leeds United’s situation is promotion, but he has to be wary of FFP rules in the meantime and try to get this club back on an even keel. Not an easy task.