Championship transfer budgets as Leeds United face £190m bill and West Brom head into unknown

Leeds United boss Daniel Farke has to prepare for another season in the Championship after losing the play-off final to Southampton.
-Credit: (Image: Mike Hewitt/Getty Images)

Leeds United missed out on a guaranteed income of at least £140 million over the next three years by losing the Championship play-off final - and their financial situation is compounded due to transfer bills they will have to settle this summer.

Leeds will receive their second year of parachute payments - 45 per cent of the central broadcasting distribution that is received by every Premier League club, compared to 55 per cent in the first year down - but they owe other clubs £190m in transfer fee instalments while they are only due to receive £2m in player sales.

“Outstanding transfer fee creditors of £190m mean that Leeds will have to pay for old player acquisitions before they can spend this summer," said football finance expert Kieran Maguire, who suggested that cash flow could be a challenge but funding from owners 49'Ers and players sales "should see them through".

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In terms of Financial Fair Play, Leeds are allowed to record losses of up to £61m over a rolling three-year period including 2024/25 compared to £83m up to 2023/24 because the limits are different between the top two divisions.

Championship clubs have voted this summer to extend the three-year limit from £39m to £41.5m to take into account inflation.

Burnley, Sheffield United and Luton Town will be due just under £50m each in parachute payments in their first year back down. Burnley's coffers could be further boosted by compensation of about £10m from Bayern Munich for manager Vincent Kompany.

Luton are set to use a large chunk of the cash they have generated over the last 12 months to fund a new stadium.

Takeover talk continues at Sheff Utd, who will start the season on minus-two points due to previous breaches of FFP. Prospective new owners - there is apparently interest from the United States and Saudi Arabia - have reportedly influenced a U-turn on a decision to trigger a contract option to keep midfielder Ben Osborn.

The Sheffield Star writes: "Osborn was told before the end of the season that the option in his deal, to tie him to Bramall Lane for a further 12 months, would be exercised, with boss Chris Wilder also going public about keeping the utility man at United. According to sources with knowledge of the situation, Osborn didn’t receive official confirmation of his option being taken up ahead of this week’s deadline - before being told it had been rescinded after intervention from United’s prospective buyers."

Sheff Utd were on the brink of administration before promotion in 2023 and the club's "modest transfer spend" last summer has "allowed them to reset financially and even though they may not be awash with cash as things stand", according to the Star.

Manager Chris Wilder said earlier this month: “We're not dead, the club's not going to go under. We're not in a position financially that other clubs are in, with points taken off them left, right and centre and breaking rules here, there and everywhere. We're a sustainable club and we have to make sure that we have a positive pre-season and get the positive feel back.”

He added: "I understand the situation and whatever is given to me I'll try and get the maximum out of it. We've always tried to do that, we've tried to overachieve and as we say around this area try and get a pint out of a half-pint pot."

West Bromwich Albion have released seven senior players and are in talks with three key first teamers as they adjust to what will be a totally different financial reality.

The 2024/25 season will be the first time Albion have either not been in the Premier League or in the Championship with parachute payments, which were first introduced in 2006/07. This will be the club's fourth year down and it will be interesting to see how much they can offer to try to retain big earners - or at least previously big earners - like Alex Mowatt and Kyle Bartley.

Norwich, who were relegated in 2022, are heading into their third and final year of parachute payments, believed to be about £16.5 million, and have released players who are believed to have been at the higher end of their wage budget if they have been at the end of their contracts. Ben Gibson, who started 35 games, and Dimitris Giannoulis, who started 31, are gone.

Watford are also heading into their third year of parachutes on the back of finishing 15th, having recently appointed Tom Cleverley as their fifth head coach since they dropped out of the top flight.

Stoke City will try to position themselves as one of the leading clubs without parachute payments, backed by the Coates family as much as possible.

Head coach Steven Schumacher said: "It’s a huge club, probably too big for the division in some ways, there was a disconnect with fans to some sort of extent and I had the same mindset (as at Plymouth Argyle) of coming in to try to achieve the same kind of thing, get it going, get the bet365 bouncing, get a team that the fans love to come to watch and get out of this division with a budget, let’s have it right, that is going to give us an opportunity to compete."

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