Leeds United set to trigger unprecedented £1bn reveal as official paperwork filed

Leeds have successfully scaled the cliff face between the Championship and top flight. Significantly, if Daniel Farke’s side had failed to go up this term, 2025-26 would have been their final year of parachute payments, which are drastically reduced in the third season following relegation in any case.

The 49ers were aware of the risks inherent to investing in English football when they first bought into the club back in 2018, gradually increasing their stake before seizing full control almost two years ago.

It’s a very, very different business project to their interests in the NFL, where profits are guaranteed and the closed-shop franchise system is set up with owners – not sporting merit or fans – in mind.

Leeds haven’t posted a single year of profit since 2017. Even then, the surplus was less than £1m.

Since 2004, when the club generated what was essentially an artificial £70m profit as £96m worth of loans were written off, Leeds have posted cumulative losses of £286m.

The new American owners are clearly banking on something structural changing within football, as well as enhanced revenues at an expanded Elland Road, to deliver a return on their investment.

Otherwise, the numbers simply don’t add up, especially as extra revenue in the Premier League is instantly swallowed up by the huge investment in the transfer market needed to be competitive on the pitch.

Even then, Leeds face an obstacle in the Premier League’s restrictive Profit and Sustainability Rules (PSR).

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Can Leeds spend big this summer?

Because they will have spent two of the last three seasons in the Championship, Leeds United’s allowable loss for the three-year PSR assessment period up until the end of 2025-26 will be £61m.

Given that they lost almost that amount in 2023-24 alone, the margins look tight, even with allowable expenditure such as investment in infrastructure, the women’s team and the academy deducted.

However, as University of Liverpool football finance lecturer Kieran Maguire has explained in exclusive conversation with LeedsUnited.News, there are levers they can pull to create more headroom.

“Leeds lost a lot of money in 2023-24 and one would expect substantial losses in 2024-25 as well, including promotion bonuses,” said the Price of Football author.

“So, I think fans may have to taper expectations of a huge transfer investment over the next summer.

“Having said that, the sales they have made have reduced the wage bill and brought in substantial player trading profits as well.

“For Leeds, I think they will have to be smart rather than simply going big. Having said that, I think an investment of £100m is feasible given that contracts of new signings will be amortised over five years.

“Strengthening key positions therefore is what I would expect to see as the main strategy over the course of the summer.”

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If Leeds United are to stabilise in the Premier League once more, it will demand a sophisticated financial strategy.

The club’s ambitions to expand Elland Road to 53,000, using the know-how 49ers have accrued during the construction of the Levi’s Stadium in San Francisco, will be crucial in the long term.

In the last 24 hours, the club have raised £120m via share issue – confirmed in official Companies House paperwork – which will be ringfenced for the stadium project, as well as the transfer budget.

Leeds generated £31m in matchday income last season, a club record and the biggest ever in the EFL. It was also more than 11 respective top-flight clubs earned through the turnstiles in the same period.

For many years, the narrative in the Premier League has been that soaring media revenues made major leaps forward in matchday income inessential.

But clubs like Leeds with massive dedicated fanbases are now realising that they have a natural advantage as far as ticketing is concerned, especially in the era of PSR.

In 2023-24, Premier League clubs generated almost exactly £900m through the turnstiles, up from £824m the previous season.

Now, thanks to the return of Elland Road to the competition and the nine clubs who are guaranteed European football next term, the Premier League is set to surpass the £1bn mark for the very first time.

Ticket price rises at Elland Road have, of course, been deeply unpopular but will likely see the club reach £40m in matchday income next season, which is more than double what they earned as recently as 2018-19.

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49ers to sell stake in NFL franchise at world-record: A sign of things to come at Elland Road?

Elsewhere in the sports business world, the 49ers are set to sell a minority stake in their flagship enterprise, the San Francisco 49ers.

The deal, which values the franchise at a world-record £6.4bn, will see a consortium backed by the Khosla, Griffith and Deeter families buy into the 49ers.

At £6.4bn, the deal will generate £384m for the 49ers. That liquidity could be crucial at a time when the 49ers are looking to expand Elland Road and execute the Rangers takeover.

It may also be a sign of things to come. Taking on minority shareholders is a sure-fire way to generate a return on an initial investment on your own terms.

The 49ers have already shown that they favour this model with the controversial Red Bull deal last summer.