The Square Ball can reveal that Leeds City Council recently turned down Leeds United’s request for a £20m loan.
The Council and the club had an agreement in place for the loan had England won the bid for 2018 World Cup. As we are well aware, England failed in its bid after Russia won the rights to host the tournament along with Qatar’s controversial victory in the bidding for the 2022 competition. Despite the £20m loan agreement lapsing upon the failure of England’s bid, Leeds United requested that the agreement with Leeds City Council remain in place. That request was turned down by the Council.
TSB learned of the loan request after submitting questions about the East Stand development at Elland Road via the Freedom of Information Act, which means public authorities are obliged to respond to requests for information they hold on any particular subject. TSB submitted the request in order to try and shed some light on the East Stand works, particularly because the club have been quick to shout about the benefits of the development but are yet to publicly state the cost of the current works. We only know that the estimated cost of the current phase of building is £7m through a second hand account of United’s Chairman and majority shareholder Ken Bates saying so at a Leeds On The Road event in Oslo earlier in the year, followed by the figure being buried deep in a Council document. It is unclear why the club has not stated the cost of the present building works if indeed it is a facility we are to be proud of.
Ken Bates has made it clear that he intends to press ahead with building of two hotels, restaurants and nightclub on Lowfields Road, despite there being no stated timeframe for the completion of the project, or no clear statement of how it will be funded.
Given that the club was unable to secure the funding to repurchase Thorp Arch, and its aborted eleventh-hour deal for the Council to reacquire it on the club’s behalf, TSB submitted the following question in, and received the following answer to, its Freedom of Information request:
Q: Have Leeds United requested any sort of funding from Leeds City Council (LCC) for this project, either in the form of a grant, direct funding, a loan or a loan obtained on their behalf? If so, what was LCC’s response? Are LCC committing any funding to this project?
A: The Council and Leeds United did have an agreement concerning a loan of £20m to support the bid to host the 2018 FIFA World Cup. Subsequent to FIFA’s decision not to award the event to England, this agreement lapsed. The Football Club did ask if the loan agreement could remain in place. However, the Council declined the provision of a loan.
The Council has approved an injection of capital of £500,000 as a contribution towards the shared cost of diverting Lowfields Road. This is required for both the development, and the provision of access to the Council owned land between the North Stand and the M621.
The Council’s decision to decline Leeds United’s request for this loan once again presents more questions than answers, the biggest of which is: just who is paying for the East Stand?
Ken Bates has indicated that short term finance has been made available for this summer’s £7m expenditure on phase one. It seems logical that ticket income would comfortably cover this finance given that the last set of accounts (to June 2010) showed gate recepits of over £11.7m. This short term finance is one thing, but it is in a different ballpark entirely to the overall projected cost of the East Stand project – hotels and all – at the “£80-90m” stated in Ken Bates own programme notes. The East Stand building works exist in something of an information vaccuum. It would be nice to know a little about the how and when.
In the last published accounts, Leeds United fans contributed £17.24m of the club’s £27.45m turnover (63%) via gate receipts and merchandise. Until Leeds United treats its fans with the respect they deserve, and fills the information vaccuum, we have every right to assume that we are contributing the lion’s share of the club’s operating funds – and the money for these building works.
Perhaps Ken Bates – who, under sworn oath in a Jersey court, said he had “not put a penny” into Leeds United – might pause for thought before labelling the very people who are funding his business “morons”, “dissidents” and “sickpots” simply because they happen to vocalise their disagreement with his methods.
It may be his business, but at the heart of his business is what Mr Bates himself termed in his Hull programme notes as “your club”. It’s our club and it’s our money, so we should never stop demanding answers to important questions.