Leeds United were today hit by the not-in-the-least-bit-surprising news that the club are to be punished for failing to comply with Financial Fair Play rules last season and will be subject to a transfer embargo in January 2015.

In a statement published earlier today, The Football League confirmed Leeds United along with Nottingham Forest and Blackburn Rovers failed to operate within the £8m loss allowance during 2013/14, outlining the restrictions that would now be in place for them until at least the end of this season, at which point the League will review the clubs books again to see if the financial situation has improved.

The conditions under which the transfer ban will be enforced make for interesting reading as they offer some hope of new arrivals at Elland Road, albeit on a free transfer basis and with a fairly restrictive wage cap in place.

Clubs will be prohibited from registering any new professional players (permanent contract or loan) unless they have:

•    24 or fewer established players (players aged 21 or over that have made at least 5 starting appearances for the club).

Based on the appearance stats over on WAFLL, Leeds appear to meet this condition.

Despite having a fairly large squad, Leeds have started just 20 players more than 5 times this season and a couple of those are below 21. If this condition includes previous seasons – which it may well do as the wording is unclear – we’d be a bit closer to the limit, but still have room to operate as far as I can tell.

January being a difficult enough time to sign players without these conditions in place, the real sticking point could be the ban on transfer fees and restriction on wages outlined below.

Where clubs have fewer than 24 established players, they will only be permitted to sign players in the following circumstances (with the player in question being added to the club’s list of established players regardless of his age or previous playing experience):

•    Where the employee costs of a player being signed are less than £600,000 per annum (or pro-rata if signed on a shorter contract).

Where clubs have 24 established players, they will be permitted to trade on a ‘one out, one in’ basis but only if the employee costs of the player coming in to the club are no more than whichever is the lower amount of:

•    75% of the equivalent costs of the player going out.
•    Or a maximum of £600,000 per annum (or pro-rata if signed on shorter contract)

£600,000 is a reasonable enough salary at Championship level and Cellino seems quite fond of loaning players with a view to buying them later so transfer fees are easily circumvented, the trouble is that such deals generally seem to involve a loan fee that the club would presumably be unable to pay, but this is something that can be worked around in negotiations I’m sure.

To sum up, the embargo will make things more difficult but in no way prevents us from adding new players to the squad making the embargo more of a hindrance than a blockade.

19 Responses

  1. henrymouni

    When Massimo took charge we were losing £1m per month.
    He got his big sword out and I got the impression he removed this loss.
    He also sold Ross for a lot of money, and yet we seem to still be in trouble.
    It is hard, without the facts, to know what is really going on.

    • Tyler75

      The losses relate to before Ross was sold and he started making major cuts and before the debt ‘re-negotiation ‘with GFH – completely different picture now.

      • henrymouni

        Ah! Thank you Tyler!
        Does not seem very fair then!
        Twas ever thus.

      • markman

        I think it is fair if everyone is treated the same
        how would QPR be treated if they were still in the championship
        at one point they had a wage bill of just under £200,00 per week
        for their goalkeepers.

      • henrymouni

        Bolton wanders debt in June 2013 was £163.8 Million and rising.They lost £50.7m during that year alone!!
        These figures are from Bolton themselves published in December 2013.
        What is going on?????

      • Tyler75

        Very good point – they must have some very creative accountants

      • NottsWhite

        There must be more than 3 clubs in this division who are living beyond their means ? Bolton, Bournemouth and Birmingham spring to mind, although I accept that Birmingham have reduced costs in the past couple of seasons

    • TSS

      This is last season so mostly GFH. Ross’ sale wasn’t within the accounting period so that’ll benefit us next time and presumably help lift embargo come summer 2015. As someone said above, this wasn’t unexpected – Cellino knew it was inevitable in the summer and bought a few more than originally planned to ensure we had the numbers.

      Just a shame we have massive concentrations of players in the same positions or this’d all be entirely trivial, but we need to be able to change the shape of the team at times and just don’t have the players to do so.

    • Scarlett Gray

      In the accounting figures for the year under review Leeds went from just over £2m net debt to £21.5m net debt (i.e. debts minus bank balance, pretty much). I don’t know exactly what debts still remain, but I am fairly certain the proposed £20m investment Massimo Cellino (and loosely speaking GFH-C) is proposing is intended to balance the books so that the football club can trade in the Summer.

  2. PAUL W

    Due to being out of the Premiership for over 10 years, Leeds are ailing football club in a no-win financial situation and Cellino is throwing his money into a bottomless pit of constant nightmares.
    The January transfer windows have been extremely uneventful for Leeds over the past 5 or 6 years, so what difference will the transfer embargo make at Leeds?

  3. markman

    Mc saw this embargo coming some time ago and we have the numbers
    what the club desperately needs is financial stability.
    to me those that talk of possible play off positions are being slightly deluded.
    mid table security this season would do.

    The club was losing £1 million a month,no club can sustain that
    The end of this season brings to an end several high cost non performing players contracts
    the Mcormack money is presumably still available and no doubt the extra finance of around
    £25 million that was being talked about before the disqualification of MC until mid march,that
    together with MC’s own money,leads me to believe that come next seasons kick off
    we will be in a far better financial position.

    A bigger potential worry is the further additional charges of dishonesty against MC that have
    yet to get to court in Italy

  4. Chareose

    If the embargo continues into the summer as is now possible then I don’t see the loan to buy option working ????

    • TSS

      We’re gonna lose money again for sure but we’d still have a £6m loss to play with in summer and Ross McCormack sale is factored into that accounting period so I think we’ll be OK.

  5. NottsWhite

    Doesn’t the decision by the FL to place Leeds on an embargo for the accounting period whilst GFH were in charge make a mockery of their decision to consider GFH as a fit and proper owner ?

    • TSS

      I’m sure they’d argue that an embargo doesn’t make an owner unfit, it simply deters owners from overspending and aims to level the playing field. I doubt anyone in Manchester is arguing Man City’s owners are unfit despite them failing to meet the requirements.

      But yeah, it is a bit of a joke.

  6. spellz

    As it is constantly hard to point out any positive with us atm, I will state one, at least our players will have time to play together long enough to ensure they gel a bit better…….that is it I guess.


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