May 30, 2023

How much money Leeds could lose if they’re relegated from the Premier League

There is a realistic chance that Leeds United’s time in the Premier League will come to an end this season as they find themselves locked in a fierce fight to avoid the drop.

If you said to fans at the start of the season that they’d be 16th with five games to play, they may not have been too annoyed. The issue is that the bottom seven of the Premier League are separated by just 10 points with only a month to go.

Leeds are only one point away from the drop zone right now which means that they are far from safety. Wins have been hard to come by and Javi Gracia’s side need some huge performances between now and the end of the season. If they get relegated, there could be some big financial implications to deal with.

Having been out of the Premier League for a whopping 16 years, Leeds United finally came back up ahead of the 2020/21 season under the guidance of Marcelo Bielsa. Things only got better as they finished in the top half in their first year back.

That was where the fun stopped, though, as a poor second season saw Bielsa sacked in February 2022. Jesse Marsch managed to stop the club going down on the final day of the season. But he started 2022/23 poorly and was himself was dismissed in February 2023. That meant Javi Gracia took charge and he is now the man in the eye of the storm, trying to keep Leeds up.

Leeds United Fans Celebrate Winning The Championship Title

Leeds United won the Championship under Marcelo Bielsa / George Wood/GettyImages

TV Deals

The major financial drawback to being relegated back to the Championship is missing out on that lucrative Premier League TV money.

Ahead of this season, it was believed that clubs towards the bottom of the table can expect to receive around £90m. There is a TV deal to receive from the Championship, but it is nothing compared to what the Premier League brings.

Parachute Payments

That being said, there are parachute payments for Leeds to enjoy if they do end up as one of the three relegated teams. This is a payment system that is devised over three seasons and takes into account a percentage of what the TV deals were for the clubs whilst they were plying their trade in the Premier League.

In the first season in the Championship, Leeds would receive 55% of the Premier League TV deal they were enjoying, 45% in the next season, and 20% in the third season. As that shows, if Leeds were to struggle to get promoted again, it is only going to get harder as the years go by.

Sponsorship deals

Whilst they are figures that the rest of the world cannot always be privy to, the various sponsorship deals that Leeds have with various companies will almost certainly be reduced or even lost. Many deals have clauses stating the amount paid by a company will be reduced by X% if relegated.

Whilst this would be a situation in which Leeds would be receiving money, it also isn’t. There are a number of players in the Leeds squad who did not join the club to end up in the Championship.

It is also a very young squad which means many of the players were expensive and linked with much bigger clubs than Leeds before they decided to sign. A player like Ilan Meslier in goal has been linked with a move away, he is 23 years old and has a market value of €22m. He is unlikely to want to play in the Championship.

Pascal Struijk and Robin Koch would likely have a few suitors, whilst the likes of Rasmus Kristensen, Tyler Adams, Marc Roca, Brenden Aaronson, Luis Sinisterra, Wilfried Gnonto and Georginio Rutter all joined the club this season for a combined fee of around £115m.

Joel Ward, Wilfried Gnonto

Wilfried Gnonto attracted lots of suitors before Javi Gracia’s arrival / Matt McNulty/GettyImages

Whilst an extreme case scenario, if all of those seven players decided to leave in the summer, Leeds are very unlikely to make anywhere near the sorts of profits that they would have envisaged when they signed them.

The only one who is likely to make any real profit is Gnonto as he only cost €4.5m and there are teams in Italy who are ready to pay more than that for him. Even then, he has barely played under Gracia and that value will only be going down whilst he is not on the pitch.

As is clear, there will be a huge financial headache for Leeds if they go back down but the parachute payments and value of the playing squad could mean they are better placed than other to come back up. That is only the case if they can replace the inevitable outgoings effectively.