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.