Leeds United Premier League dream is crucial to 49ers Enterprises taking biggest step

Leeds United are on the cusp of a Premier League return, one that could play a big part in defining the future of the club.

Daniel Farke’s side sit second with two games remaining after the 4-3 success at Middlesbrough, but with Ipswich Town one game back and with an additional game in hand, a top-two finish is by no means cut and dried for the Whites.

When Marcelo Bielsa led Leeds back to English football’s top flight following a 16-year absence, the club had big ideas around competing and remaining competitive, but under different ownership and with the bold but sometimes brash Victor Orta as sporting director, things eventually unravelled.

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A return in 2024 would undoubtedly be different. In order to be a Premier League club for the long term, Leeds have to plan for the infrastructure to match, and that means that the stadium redevelopment of Elland Road is core to the club’s objectives for decades to come.

Last summer saw the end of the Andrea Radrizzani era at Leeds, with the Italian selling his controlling stake in the club to the US-based 49ers Enterprises, the venture capital arm of the San Francisco 49ers NFL team.

In North American sports the greatest asset that a team can possess, outside of the fan base that backs the club globally, is the stadium in which it resides. For decades US sports franchises have lived and died by whether or not they can get stadia built in the right location, and relocation has been something of the norm across the major league sports of baseball, American football, basketball, and ice hockey.

As soon as 49ers Enterprises, led by chairman Paraag Marathe, took a controlling interest in the club the issue that became front and centre of the overall vision was what to do with Elland Road.

At present, Elland Road has a capacity of just under 38,000. In terms of size, it is not big enough to satisfy the pent-up demand that exists for season tickets, and if the plan comes to fruition in terms of competitive success, that is something that is not going to get any easier.

The season-ticket waiting list is understood to exceed 20,000, a figure that represents around 53% of the overall capacity of Elland Road. There is a lot of revenue opportunity that Leeds are missing out on.

Realising such revenue opportunity requires a considerable amount of capital, something that they now have through 49ers Enterprises, as well as an ownership that places that vision at the top of the agenda.

One of the first things that Liverpool owners Fenway Sports Group did when they acquired the Reds back in 2010 was to assess the feasibility of building a new stadium. In the end the decision was made to preserve the cultural heritage of Anfield and remain in situ, instead redeveloping the stadium to bring it up to the modern age.

When FSG acquired the club 13 years ago, matchday revenues sat at £40.9m at the 2010/11 financial year-end. Fast forward to the most recent set of accounts, for the year ending May 2023, and the club was pulling in £80m. Matchday revenue has more than doubled over the last 10 years against a capacity increase of around 18%

In 2016 the £114m Main Stand redevelopment was completed, the capacity increasing by 8,500 seats, and a new matchday experience and significantly enhanced corporate offering helped Liverpool grow revenues considerably.

In the 2015/16 set of financial accounts published by Liverpool, matchday revenue stood at £62.4m. The following accounting period, 2016/17, saw matchday revenues at £73.5m, an increase of almost 18% year on year. The increase in matchday revenues since the completion of the Main Stand has been 39%. The redeveloped Anfield Road end, completed at the start of this year, will see Liverpool deliver matchday revenues of more than £100m on a consistent basis.

At a time when financial controls have been a hot topic in football, with the Premier League to introduce a new UEFA-style squad cost ratio rule from 2025 to replace the current, and much-maligned, profit and sustainability rules (PSR), the need has never been greater for clubs to address the deficiencies that exist within the business when it comes to potential revenue generation.

If Leeds want to compete at a higher level and re-establish themselves at the top of the English game in the future then they have to act soon. Other clubs such as Tottenham Hotspur made the decision to press ahead with the costly pursuit of building a new stadium, with the world-class Tottenham Hotspur Stadium opened in 2019. In the coming years it will be an asset that will allow Spurs to spend to a level on par with the biggest clubs in Europe, and that could be hugely impactful from a competitive standpoint.

Plans for a redeveloped Elland Road have mentioned potential capacities of 55,000 and 60,000. Of course, the ability to reach those lofty numbers would be predicated on the demand, and that demand will be aided considerably by Leeds being a Premier League team.

To look at matchday revenue in comparison to other Premier League clubs for the 2022/23 financial year, a period when Leeds were part of English football’s top flight, shows that Spurs were bringing in £4.9m per game, Arsenal £4.3m, Manchester United £4.1m, and Liverpool £3.3m. That was based on Premier League revenue, not taking into account the clubs who had more home games through domestic and international competitions.

On that list, Leeds stood at £1.4m, placing them ninth, ahead of the likes of Aston Villa, Everton, and Wolverhampton Wanderers.

Say the additional capacity satisfied the demand for 20,000 extra spectators, then based on a capacity of 37,000, allowing for some seats being unable to be used due to segregation etc, then an additional sum of around £750,000 could be achieved per home game, taking the revenue to £2.15m. That is without taking into account the potential to create lucrative new hospitality suites, which would allow the commercial team to upsell and achieve greater revenues. Over the course of a season, using just that £750,000 figure alone, would result in more than £14m extra per season, and that is likely a very lowball figure.

Clubs beneath Leeds in that matchday revenue list won’t be there for much longer either. Aston Villa have their own plans for how to increase matchday revenue at Villa Park, while Everton will move into their new 52,888-seater Bramley Moore Dock home from 2025, something that will significantly improve their matchday revenues.

The potential also exists to make Elland Road a multi-use stadium, a world-class venue in Yorkshire that can draw additional revenue from concerts or other sporting events. All of this will be under consideration from the American owners, with the idea of ‘sweating the asset’ that is Elland Road something that they will want to see come to fruition.

Clubs cannot stand idly by and expect the requirement to remain financially compliant, at a time when wages and transfer fees continue to rise despite the early warning signs appearing of the stagnation of domestic broadcast rights, to be met by just commercial revenue alone and signing more corporate partners. The stadium has to become one of the most compelling elements, and Leeds have an advantage in that they have willing owners with capital and a vision for the redevelopment of the stadium, maintaining its historical significance to Leeds fans.

But it has to do more for the club over the next 20 to 30 years if they are to meet the continued financial challenges that will come over the horizon. Those who don’t act soon will get left behind, and Leeds cannot afford to be in that group, which is something 49ers Enterprises will realise only too well.