Leeds United chief executive Angus Kinnear outlined to the LUFC Trust why loan clauses were added in players’ contracts as a “trade off” against wage cuts.
Following relegation, it was revealed that a number of Leeds players had loan provisions in their contracts. It meant that if they were relegated, they might go on loan as long as their pay were paid in full. Seven people have left.
Rasmus Kristensen and Diego Llorente have joined Roma, while Robin Koch has joined Frankfurt, Marc Roca has joined Betis, Brenden Aaronson has joined Union Berlin, Max Wober has joined Gladbach, and Jack Harrison has joined Everton. They’re all on loan.
More could come to pass. Tyler Adams is expected to join Bournemouth for £23 million plus add-ons. Willy Gnonto, a teen sensation, has been told he must stay and, happily, his contract does not include a loan provision.
Luis Sinisterra does, and Leeds has one more space available in terms of over-21 international loans. Gnonto, Sinisterra, and Helder Costa are doing their own training. Kinnear explained the inclusion of loan clauses.
“It was financially prudent to ensure that players had to accept significant wage cuts.” Angus claimed that they insisted on these exit and/or loan provisions in exchange for wage reduction.
“Their position was that, in order for the club to sign the players and avoid competition for their signatures, exit clauses needed to be included.” Players that departed would have loved to leave on long-term contracts.
“However, values had fallen behind both exit clauses and book value.” Selling players below book value is difficult for profit and sustainability/FFP considerations. Salary savings of approximately £30 million have resulted from the loans.
“The hope is that their sell-on values will rise again (from the low point of a relegation season) during a year on loan, allowing the club to generate profits from sales,” Kinnear explained.
Kinnear explains why loan terms were inserted into Leeds contracts.
Leeds has no choice but to add these wage decrease measures. Some of the players’ salaries are simply unsustainable in the Championship. A £30 million save is impressive.
It’s also possible that trading Aaronson or Roca right now would have resulted in an instant loss for Leeds. FFP is being hampered. An impressive loan may just help to increase their value.
Returning to the Premier League at the first attempt also helps. However, it is also a source of great anger that Leeds has had to wait until now to sell and loan sellable assets before ultimately investing.
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