Leeds United, the Premiership football club, have reported a sharp rise in annual losses, blaming the lack of European Champions League football and costly spending on new players.

Football's profit league 2002

Southampton �3.3m profit Tottenham Hotspur �0.9m profit Aston Villa �0.4m loss Celtic �2.9m loss Manchester City �13.9m loss Leeds United �28.2m loss Rangers �35.3m loss

The club failed to qualify for last year's Champions League, meaning the loss of lucrative television and broadcasting income.

In the 12 months to June 2002, Leeds also extended its loans to cover the cost of buying new players.

However, the club replaced manager David O'Leary with Terry Venables in June and has since sold a number of expensive players.

A costly game

In the year to June, Leeds United's losses widened to �28.2m compared with �4m the previous year.

Television and broadcasting income was down 7%, although record income from season tickets, merchandising, and sponsorship offset part of this.

A Champions League qualification position is our main goal for the current season

Leeds United

Leeds said competing in the UEFA Cup campaign compared to participation in the Champions League in the previous year accounted for a �10.8m fall in revenue.

"This highlights the importance of participation in the Champions League on the group results and emphasises why a Champions League qualification position is our main goal for the current season," said the club.

Leeds are currently in fifth position in the premier league but needs to finish the season in the top four to qualify for the next Champions League.

Player sell-offs

The club's profits were also knocked by a �10.3m increase in player wages.

Almost half of this was the cost of new players, notably Rio Ferdinand and Robbie Keane who were purchased the year before, and the signing of Seth Johnson and Robbie Fowler.

But executive chairman Peter Ridsdale said the club is now focusing on home-grown talent, as part of a strategy to lower player costs over the longer term.

Since the end of the year Leeds have also generated �37m by selling Rio Ferdinand to Manchester United for �30m and Robbie Keane to Tottenham Hotspur for �7m.

Mr Ridsdale said: "Actions taken since the year end and ongoing actions surrounding the playing squad will help to ensure that we deliver against this strategy".

Cash back

In June, Leeds received �3.5 million from the media group Sky as part of its media rights partnership.

Sky acts as the football group's agent for commercial activities, and is helping with the development of its internet operations.

The funds will partly offset the group's mounting debt, which increased from �39m in 2001, to �78m in 2002.