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Record losses for English Premier League club by Leeds United
Leeds, Oct 29: Leeds United unveiled record losses for an English Premier League club on Tuesday (October 28) at just under 50 million pounds ($84.67 million), but chairman John McKenzie is confident he can turn the club`s fortunes around.
Leeds, Oct 29: Leeds United unveiled record losses for an English Premier League club on Tuesday (October 28) at just under 50 million pounds ($84.67 million), but chairman John McKenzie is confident he can turn the club's fortunes around.
McKenzie said he had taken steps to restructure the finances at the Elland Road club which, under the leadership of former chairman Peter Ridsdale, whom he replaced in March, had invested heavily in a failed bid for European glory.
But McKenzie warned that any potential turnaround in the health of Leeds depended "not only on a prudent, effective business operation, but also upon our football team performing satisfactorily within the Premier League."
Currently second from bottom in the English top flight, the club that three years ago reached the semi-finals of the lucrative Champions League announced pre-tax losses of 49.5 million pounds in the year to June 30, from 33.8 million the previous year. With turnover down by a fifth to 64 million pounds, player wages accounted for 88 percent of that. McKenzie said he had cut costs by 20 million pounds after a number of highly paid senior managers were made redundant, the size of the staff was reduced and the club offloaded several key players.
The moves appeared to instill confidence in investors as the shares, worth only 3.5p each, rose by 24 percent in morning trade. The market value of the entire club is worth less than 10 million pounds.
Leeds' debt remained largely unchanged at 78 million pounds, from 77.9 million previously. McKenzie said the club was in discussions with creditors over restructuring its debt but there remained uncertainty about the outcome of negotiations.
McKenzie appointed Trevor Birch, replaced at Chelsea this year following Roman Abramovich's takeover, as chief executive to oversee the day-to-day running of the business, enabling McKenzie to concentrate on long-term strategic development and the restructuring and refinancing of the business..
A poor performance on the pitch last season -- the club only just avoided relegation -- led to reduced media income. With a poor start to the current season the outlook appears bleak unless the club avoids relegation again.
Television and broadcast revenues fell by more than a third as income decreases according to a club's position in the league. Also the club's poor performances meant fewer live games were broadcast.
Merchandising income also fell and an excess of unsold shirts had to be disposed of through large discounts, cutting margins dramatically. The club has also had to pay 5.7 million pounds compensation to its former managers David O'Leary and Terry Venables.
Bureau Report
McKenzie said he had taken steps to restructure the finances at the Elland Road club which, under the leadership of former chairman Peter Ridsdale, whom he replaced in March, had invested heavily in a failed bid for European glory.
But McKenzie warned that any potential turnaround in the health of Leeds depended "not only on a prudent, effective business operation, but also upon our football team performing satisfactorily within the Premier League."
Currently second from bottom in the English top flight, the club that three years ago reached the semi-finals of the lucrative Champions League announced pre-tax losses of 49.5 million pounds in the year to June 30, from 33.8 million the previous year. With turnover down by a fifth to 64 million pounds, player wages accounted for 88 percent of that. McKenzie said he had cut costs by 20 million pounds after a number of highly paid senior managers were made redundant, the size of the staff was reduced and the club offloaded several key players.
The moves appeared to instill confidence in investors as the shares, worth only 3.5p each, rose by 24 percent in morning trade. The market value of the entire club is worth less than 10 million pounds.
Leeds' debt remained largely unchanged at 78 million pounds, from 77.9 million previously. McKenzie said the club was in discussions with creditors over restructuring its debt but there remained uncertainty about the outcome of negotiations.
McKenzie appointed Trevor Birch, replaced at Chelsea this year following Roman Abramovich's takeover, as chief executive to oversee the day-to-day running of the business, enabling McKenzie to concentrate on long-term strategic development and the restructuring and refinancing of the business..
A poor performance on the pitch last season -- the club only just avoided relegation -- led to reduced media income. With a poor start to the current season the outlook appears bleak unless the club avoids relegation again.
Television and broadcast revenues fell by more than a third as income decreases according to a club's position in the league. Also the club's poor performances meant fewer live games were broadcast.
Merchandising income also fell and an excess of unsold shirts had to be disposed of through large discounts, cutting margins dramatically. The club has also had to pay 5.7 million pounds compensation to its former managers David O'Leary and Terry Venables.
Bureau Report