Leeds United has been warned following Sheffield United’s recent punishment of a points deduction for failing to settle outstanding transfer fees, highlighting potential repercussions for clubs defaulting on payments.
Sheffield United’s default on approximately £9 million in transfer fees has led to the EFL imposing a two-point deduction, scheduled to take effect at the beginning of the next season should the Blades be relegated to the Championship.
Additionally, a further two-point deduction will be enforced at the end of next season.
Leeds United facing similar problem
The situation has drawn attention to Leeds United, whose 2022-23 accounts reveal outstanding payments totalling approximately £190 million owed to other clubs
Speaking on Football Insider’s Inside Track podcast, former Everton director Keith Wyness has claimed that Leeds United could end up causing a huge problem for clubs they owe money to if they default on their outstanding payments.
Wyness emphasised the potential severity of the issue, highlighting past experiences with Italian clubs during his tenure at Everton, which necessitated involvement in FIFA tribunals to resolve payment disputes.
He stressed the importance of timely payments in maintaining financial stability and adhering to budget forecasts, warning against the potential disruption caused by defaulting on payments.
While Sheffield United’s £8 million default may not have catastrophic financial implications, Wyness underscored the potential magnitude of the issue if larger clubs, such as Leeds, were to default on significant sums owed.
Such a scenario could create substantial challenges for the clubs awaiting payment.
He said (quotes via Football Insider):
“It seems that the Sheffield United owner is solely to blame for this punishment.
“It must be cash flow issues, and that does happen in business.
“The danger is very big, however, if clubs stop paying each other,
“I had a similar issue with Italian clubs during my time with Everton, we had to go to Fifa tribunals.
“It becomes a real issue because you forecast for those payments – and all of a sudden your budget is out of whack.”
“So it’s a very serious issue, don’t let the scale of it fool you. Sheffield United was £8million this time, which won’t break the bank.
“But if a bigger club, like Leeds – who owe £190million, don’t pay up, it could be a huge problem for clubs.”
Leeds United embroiled in closely contested battle for direct promotion
Leeds United are currently involved in a tight race for direct promotion. They are sitting 3rd in the table, with 87 points, only 2 points behind 2nd placed Ipswich Town and 4 points behind league leaders Leicester City.
Their form has taken a dip recently, with the club winning only one of their last 5 games, losing two and drawing two.
They can not afford to lose any more points if they want to keep the fight for promotion alive.
