It has been widely rumoured that Ken Bates will write no further programme notes after his valedictory musings in the New Year’s Day publication for the Bolton game. The outgoing chairman signed off with his usual hubristic mixture of triumphalism, inferences of malevolent forces at work and general business epithets – it was hard to know whether to laugh or cry as we were reminded once again that a football club has bills to pay all year round, while it is only open for business 25 times a year.
The miserable irony in all this is that the 25-days-a-year football team has been propping up the club’s attempts to widen its other Income Streams, to the point where you could easily argue that it has been neglected – the evidence exists in the plummeting attendances. What Ken’s ‘other 340-days-a-year’ mantra fails to acknowledge is that the 25-days-a-year part of the business – the football team – is the most important.
Unfortunately, at Ken’s version of Leeds United, instead of being the hub around which the ancillary activities were based, in fact the football team has been used to pay for everything else. Mr Bates has said himself that at Leeds United they were building a “club first and a football team second”. While entirely innocent in its intentions, that single phrase is one of the greatest truths – and biggest PR gaffes – of Bates’s tenure. Repeated player departures, coupled with the club’s rather thrifty approach to the incoming transfer market, left many fans with a feeling that the football team was some way down on the list of priorities. The numbers tell a very similar story.
Leeds United Supporters Trust has had the club’s latest accounts independently analysed and has published its findings. It’s important to note that L.U.S.T. has cross-checked its analysis with Rob Wilson, a football finance expert from Sheffield Hallam University, whose analysis Ken Bates has previously championed in his programme notes – a timely reminder that one must live and die by the same sword. The stark truth revealed by the analysis is that the club has stayed afloat through player sales, while spending many millions on non-football activities. Below is a selection of the key findings:
- Profits from player sales (£2.5m) kept the club in the black.
- Gate receipts have dropped by 10.6% from £12.7m (2010-11 season) to £11.3m (2011-12), while overall admin costs have risen from £8.6m to £9.8m.
- Since exiting administration in 2007, the club has spent £17.7m in cash on building works.
- Yorkshire Radio, Leeds United Pavilion, Leeds United Media and Leeds City Holdings collectively lost £781,000 in these accounts, giving total losses of nearly £5m to date.
- Shaun Harvey was paid £259,000 in salary, pension payments and benefits.
- The club owed £2.3m to Ticketus 2 LLP (the same company with whom Rangers mortgaged their future ticket income) for the mortgage against season ticket sales.
- The club owed £1.7m for a loan from club sponsor Enterprise Loans.
- Assuming promotion is the stated aim of GFH Capital, the new owners have inherited £19.4m worth of debt.
- Preference shares issued to Lutonville Holdings (according to the accounts controlled by Ken Bates) incurred admin costs of £107,000.
- £4m was payable to Lutonville for those shares (which cost £3.2m) when the club changed hands.
It’s worth sitting down with a coffee and a packet of Jaffa Cakes to digest the full details of the club’s financials to see the state of Leeds United as Ken Bates departs, and decide for yourself whether the club was being run on Ken’s “proper business-like lines”. If straightforward profit through player sales is acceptable to you as a Leeds fan then perhaps he’s right, but the club’s withering attendances – in turn damaging its core business – suggest that Leeds United fans agree in fewer and fewer numbers.
GFH Capital have already acknowledged that the club must re-engage with the fans if we are to succeed and we wish them the very best of luck. The end of Ken’s troublesome programme notes will represent a huge step in the right direction for many. Hopefully GFHC can now deliver on their promise to invest in the football team and give us something to get behind – that way we’re sure the rest will follow.
Build us a team and we’ll build the club for you.
You can read the full L.U.S.T. analysis here.
It looks like Old Ken left us on the verge of doomsday and got £50 million in the bank, well done
As of this moment no faith in GFH they are very close to Ken the President
After 51 years its over for me
K
Its painful to actually read what has been in the minds of many fans for quite sometime (7 years to be precise), perhaps the “He saved the club” brigade can finally see what this man has done to OUR club for one reason only.
Lets be fair, he has been quite cute in stringent media management/banning orders or should that be stranglehold and maybe the Yorks Radio debacle has served its purpose in his eyes.
How can the heartbeat of the club be restored, we need a signature signing for starters. Followed by discounted prices to the end of the season (the current offer carries no incentive) – I’m a ST holder and would glady have such discount reflected in next years price. Though this approach I fear will remain a fantasy with reality revolving around a 34 year old Clint Hill and Becchio/Lees/Byram entering the departure lounge
Wish I could say something positive, but having been to Paris etc never been as down since watching Grimsby Town at ER under Bremner and that was bad!! Can there ever be another dream??
Thanks for this article and the hard work you do for Leeds United.
As always, your clear presentation of the facts leaves no room for argument about what a parasite Ken Bates was and is. It is sickening to think that genuine supporters hard earned wage has gone on nothing more than providing a lavish lifestyle for a leech like Bates and I’m only hopeful that things will improve in the future under GFH. If not, I hope you will continue to expose those who work against the club.
[...] of blog writer on the topic of Leeds United over the last 2 Years, and put well in The Square Ball article [...]
where have they got the £20million debt from???
- Preference Share payment to Lutonville: £4.0m
- Ticketus 2 LLP Loan Repayment: £2.3m
- Enterprise Loan repayment: £1.7m
- Krato Loan Repayment: £0.2m
- Payment to liquidators: £4.8m
- Working Capital Shortfall: £6.4m
- TOTAL: £19.4m
It’s worth saying that just because items are listed as debt, it doesn’t mean that there are people banging on the door demanding repayment or that it’s a problem.
Whilst you can’t argue with the numbers my question is why would Bates be so keen to stay on firstly as chairman for the rest of the season and then as president? If I just fleeced someone like that you wouldn’t see me for dust.
In addition these accounts are nothing new to GFH. The due diligence process is significantly more complex and time consuming than a quick review of statutory accounts in the public domain. Why on earth would you pay £50m merely to inherit £19m debt?
What these accounts do though is explain why the takeover process took so long.
I hate Bates more than the next person but just think there is a bit more to this than meets the eye.
From what we gather they have paid £17m up front, with another £17m payable upon promotion. Add in the inherited debt and you’re at a figure of £53-54m.
Through it all together eh…? If this is the cost of getting that parasite out of the driving seat then great. If GFH get off on the right foot, i.e. signings then I think we’ll get some good momentum going. We ARE only a couple of signings from a decent team, albeit a thin one, just need to get us fans positive again!
They knew of the debt when they bought the club so clearly thought whatever they paid was good value so why would they think different today? If the bulk of the debt relates to assets/building work then it’s no different to a mortgage to build an extension on your house. It’s the net balnace which is important and given they bought the club recently I’m assuming the debt sounds much worse than it really is. Debt is always bad debt and can work for you – businesses the world over do this very thing!
“it’s no different to a mortgage to build an extension on your house”. That’s true deepreddave, but in our case it’s not actually our house, is it?
Bates has been an asset-stripping blight on our club, and it bothers me why the supposedly decent and intelligent GFHC people can not only retain the old coffin dodger’s services as Chairman, but elevate him to the absolute pinnacle, figurehead Presidency. This position was ably filled by Lord Harewood for 50 years, and he should have been replaced by an equally universally respected figure (Lucas Radebe is the blindingly obvious choice IMHO), not by a man who turns off so many fans in ever-increasing numbers as the scale of his deception and wilful negligence is progressively revealed. Bates Out, Radebe In!
Eddie Gray would have been a great choice for Presidency!
[...] Why? Well that’s a road long trodden by any columnist of blog writer on the topic of Leeds United over the last 2 Years, and put well in The Square Ball article today [...]
I think LUST have been a little bit selective with the truth(or rather their football finance expert has been).
Part of what they say is that the total debt is £20M but this includes £5M of debt we owe (to the old admin creditors) IF we get promoted to the Premiership by 2017.
This is called a continguent liability not a debt. The difference is it isn’t payable unless a certain event takes place. And we all know if that certain event takes place then the £5M is not a problem…..and is something i personally would welcome for the sake of the old creditors (no i’m not one of them) as well as a fan.
Now what else have they ‘stretched’ the truth on from reading the accounts?
I haven’t read the accounts but feel sometimes there’s a bit of an agenda with LUST and what they say is for their own slant and not always an ‘unbiased’ opinion.
I’m not pooing their report totally…..just saying accounts and figures can be analysed to tell different stories.
Was there any mention about the cash balances in the club (or overdraft)?
As always…..MOT