Leeds reveal £7.8m pay-off made to players and agents

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The sorry, sorry saga of Leeds United's demise will hit a new low today with official confirmation that they paid £7.8m in severance packages and agents' fees to offload players last summer.

The sorry, sorry saga of Leeds United's demise will hit a new low today with official confirmation that they paid £7.8m in severance packages and agents' fees to offload players last summer.

In the midst of their financial meltdown, which still threatens to push them into administration, they were forced to pay £6.7m in wages to persuade players to leave. They paid another £1.1m to agents to facilitate the players' moves away from Elland Road.

"It is not appropriate for the payments to be split down into individual transactions," says the Leeds chief operating officer, Shaun Harvey, in a statement released this morning. It is understood that the money was paid to high earners who departed in July, as well as to their representatives. Players who left in that period included Mark Viduka and Ian Harte. Danny Mills, Dominic Matteo, Stephen McPhail and Nick Barmby also left the Leeds payroll in that period.

Leeds have revealed the extraordinary expenditure because they were obliged by the Football League to publish payments to agents made in the last six months. A full club-by-club breakdown will be published today. Leeds spent £1.55m on agents in total in the period, with £450,000 paid to the agents of incoming players. The 72 non-Premiership clubs spent £5m altogether on agents between July and December last year, a rise of £3.6m on the previous six-month period.

While Leeds are not still haemorrhaging money as rapidly as they were in the wake of last year's relegation from the Premiership, their financial situation remains dire. Insiders suggest that they are struggling to find money to pay wages, although if goalkeeper Scott Carson is sold soon, an immediate windfall of £500,000 will ease the situation slightly.

Leeds will also benefit from bringing forward their Championship match with Brighton, originally scheduled for next month. The official reason for the game being moved - from 22 February to 29 January - is because both sides have been knocked out of the FA Cup and they now have a free weekend. Unofficially, Leeds are desperate for the matchday revenue.

The Leeds chairman, Gerald Krasner, remains outwardly upbeat about finding a solution to the club's problems. But it is understood that he is also contemplating a "plan B" solution if he fails to sell the club to Sebastien Sainsbury's consortium, which still hopes to complete a buyout. One source at Elland Road said last night that Krasner has scheduled a meeting this morning with a leading firm of "liquidating specialists". It is thought that Krasner wants to explore an innovative way to restructure the club's finances while also preparing for the possibility of administration. The collapse of the Sainsbury deal would probably push Krasner to act sooner rather than later.

Sainsbury is still hopeful that he can complete his £25m buyout, which is proceeding without Ken Bates. The former Chelsea chairman offered to invest £10m in Sainsbury's plan but has been rebuffed because he wanted 51 per cent of the club for his money.

In his statement today, Harvey seeks to rationalise the payments to departing players and their agents by explaining the necessity to cut the club's wage bill.

"As a result of relegation, a major overhaul of the Leeds United playing squad was undertaken, which reduced the wage bill of the company from over £40m to less than £18m," he says.

"The total cost to the club of the players' contracts who left during the summer period was £35m, of which payments to both players and agents acting on our behalf was £7.8m. This resulted in an overall saving of £27.2m before taking into account the transfer fees received. Of the £7.8m paid as part of these arrangements, £1.1m was committed to agents and this amount is being paid over varying periods of time."

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